UK Update: Don’t risk damaging your brand by greenwashing your dirty linen in public

As COP26 kicks off in Glasgow this week, there is an expectation that governments and industry around the world will step up their efforts to tackle the climate emergency.

Increasingly consumers are looking for businesses to actively improve their carbon footprint and want to see evidence of steps they are taking to mitigate their environmental impact.

Conscious of this more and more business are seeking to market their goods and services as being environmentally-friendly and improve their Environmental, Social and Governance (“ESG”) credentials.

Unfortunately in some cases their green credentials do not match the image they are portraying. This is known as “greenwashing”, where an organisation markets itself to be more environmentally-friendly or sustainable than it actually is.

Recently the head of Greenpeace warned of the risks of greenwashing at COP26.

Greenwashing is not only damaging to the environment, by encouraging consumers to use goods and services which are not as environmentally-friendly as they are portrayed, it is also extremely damaging to the brands which are exposed for having engaged in this practice.

The difficulty arises as there is no legal definition for phrases such as “sustainable,” “green,” or “environmentally-friendly”. Therefore, it can be an easy trap to fall in to when advertising your brand.

Unfortunately, the reputational damage for a business from greenwashing can often be worse than being seen to be ‘unsustainable’ in the first place.

Experience in the field of reputation management tells us that damage to a brand is most severe when consumers feel deceived. Greenwashing is no exception.

Few, if any of us, could claim to be perfect when it comes to environmental matters, and consumers are more sympathetic to brands which hold their hands up and accept that they need to put more work into becoming a sustainable business rather than brands which pretend they already are.

Transparency in business is all important.

In recent years there have been a number of high-profile cases of greenwashing that have caused reputational damage for companies.

One example was the release by H&M of its ‘Conscious Collection’, which on the face of it was an excellent campaign aimed at reducing new material entering the production of clothing by using in-store recycling bins for clothing and also using more sustainable material in the production of its clothing.

However, Environmentalists were quick to point out that less than 1% of the clothes in the recycling bins would end up being recycled and that H&M were one of a number of brands guilty of selling “fast fashion”.  “Fast fashion” has long been criticised for its huge environmental impact due to the amount of textile waste which ends up in landfill sites.

The “Conscious Collection” campaign was accused by critics as being a cynical marketing campaign to encourage consumers to buy more clothes rather than reduce, re-use and recycle. What started off as a well-intentioned, positive campaign ended up as a publicity headache for H&M.

The climate emergency is now taking centre stage and consumers expect governments and industry to step up to their responsibilities.

Those who demonstrate a commitment to the environment will undoubtedly benefit.

However, those which exaggerate their commitment do so at their own peril and face a consumer backlash if and when their lack of green credentials are exposed.

Reputations are hard to build and easy to destroy.

It is important to think carefully about how green your business actually is – and avoid unnecessary reputational damage by marketing it as something which it is not.

By Kirsteen MacDonald, Burness Paull LLP, Scotland, a Transatlantic Law International Affiliated Firm.  

For further information or for any assistance please contact ukscotland@transatlanticlaw.com

Disclaimer: Transatlantic Law International Limited is a UK registered limited liability company providing international business and legal solutions through its own resources and the expertise of over 105 affiliated independent law firms in over 95 countries worldwide. This article is for background information only and provided in the context of the applicable law when published and does not constitute legal advice and cannot be relied on as such for any matter. Legal advice may be provided subject to the retention of Transatlantic Law International Limited’s services and its governing terms and conditions of service. Transatlantic Law International Limited, based at 42 Brook Street, London W1K 5DB, United Kingdom, is registered with Companies House, Reg Nr. 361484, with its registered address at 83 Cambridge Street, London SW1V 4PS, United Kingdom.