Many have already been shocked by the EU’s forthcoming regulation on green claims, which is pretty strict. The proposal to regulate environmental claims will radically change the way companies communicate and market their products and services.
Green claims are broadly defined as claims related to sustainability. According to various studies, a significant number of these are currently misleading. Companies such as Coca-Cola and Nestle have recently hit the headlines on account of their environmental claims.
Finnish companies have good reason to be aware already, as the Finnish Competition and Consumer Authority and the Council of Ethics in Advertising, for example, have already tightened their supervision of claims.
There is no reason to be alarmed by this development, as the new regulation creates, above all, an opportunity to highlight genuine sustainability work in a credible way and in a way that allows you to stand apart from the rest.
Regulation is increasing at EU level
The EU’s proposal for future regulation is strict. Claims must be based on a life-cycle assessment in addition to which all claims must be approved in advance by an accredited verifier before they can be used.
Penalties for infringements could amount to up to four per cent of a company’s annual turnover.
In addition, the amendments to the EU’s Unfair Commercial Practices Directive add terms such as ‘climate neutral’ or ‘natural’ that are unsubstantiated to the blacklist of marketing terms to prohibit claims where the excellent environmental performance cannot be demonstrated.
We will have to wait to find out what is considered an excellent level of environmental performance.
Increased monitoring also in Finland
But marketing and communication professionals don’t have time to wait around to find out what will happen next in Brussels.
In Finland, the Central Chamber of Commerce’s Board of Business Practice already published a recommendation in early 2023 that terms such as ‘green’, ‘carbon neutral’ and ‘climate friendly’ should be avoided.
All information relevant to the environmental impact of the product must be provided. Therefore, it is not enough for the claim to be true, as the claims should focus specifically on the most significant environmental impacts of the product.
For example, the most material environmental impacts of a large electric SUV are not going be related to the materials that are used in the car’s interior.
In addition to the wording, the recommendation also applies to other forms of communication, at factors such as the colours, images and sounds used also influence the overall impression.
The Finnish Competition and Consumer Authority is already actively keeping green claims in check.
Earlier in the autumn, the Finnish Competition and Consumer Authority decided that the marketing of Aino ice cream by Froneri Finland Oy was misleading.
The company used the term ‘responsible’ too vaguely. The climate benefit of bio-based materials was generalised to claim that it provided broader benefits for sustainability, even though there was no evidence of other environmental benefits.
New era requires a new type of communication
We are in a new era of sustainability communication, where both public authorities and consumers are more critical of sustainability claims.
What kind of communication should you focus on now?
Companies should focus above all on describing concrete actions that relate to their core business.
For example, if more than half of a company’s emissions are generated in the production of raw materials, it is no longer credible for the company to tell people about the energy mix of its production facility.
In addition to the truth of the claims, it is necessary to critically assess whether there is sufficient evidence to support the claim.
Now is the time for new communication policies
So, it is not a good idea to sit back and wait for the EU regulation to become mandatory.
It takes time to update the key elements of corporate social responsibility communication and to develop the skills required in the organisation.
In the future, every single communication and marketing professional will need sufficient understanding of sustainability issues to be able to spot the real sustainability claims from the greenwashing of the past.
A good sustainability narrative – a credible and inspiring summary of how this particular company or organisation is making the world a more sustainable place – can help here.
A good sustainability narrative does not focus on trivial issues but is an integral part of an organisation’s reason for existing and description of itself. It is based on scientific facts and concrete action.
In this case, tighter regulation will provide good reason to shine rather than be a cause for concern.
A checklist for you
At Kaskas, we have created the checklist below to help you go through all your communications related to sustainability. We hope you find it useful!
- Is this a green claim?
- Is the topic relevant regarding the company’s core business? Does the green claim concern the material environmental impact of the product?
- Is the claim true?
- Is there reliable, up-to-date and credible evidence for this claim?
- Is the claim sufficiently accurate? Does the claim cover the entire company or a product, or just a part of a product?
Do you need assistance in encapsulating your organisation’s sustainability narrative or would your organisation benefit from coaching on green claims? We’d love to help!