Transcription
Now, many of us want to do what we can to slow the effects of climate change. And as a consumer, it means choosing products that are better for the environment. But do you know what you're buying does what it promises? Well, calls to stop so-called greenwashing are growing.
This is now a global north greenwash festival. This is greenwash gone mad. We're gonna share the idea that greenwashing has got to stop. So, what exactly is greenwashing? Well, it's when a company or organization is misleading about its environmental credentials. It might involve terms like this, common words that you'll see on packaging and in advertising. And if you're confused about what they mean, you're not alone.
We asked regulators in the US and UK to give us their definitions for the words sustainable, eco-friendly, and ethical. But they told us that the terms don't have an agreed definition. So instead, companies have to back up their claims with evidence, which, as we'll see, can be problematic.
But for consumers, going green matters. In a global study, 70 percent of Gen Z shoppers said they try to buy products from companies they consider to be ethical. Another study found 73 percent of millennials would spend more on a product made by a sustainable brand. But many savvy shoppers are skeptical about environmental promises, and with good reason. Well, greenwashing is everywhere. The number of consumer goods and services that claim to be sustainable or eco-friendly or carbon neutral has exploded.
You know, there has been this awareness, um, raised now, and which, which is really developing further every year, that we need to do something for the planet. And so this raised awareness by consumers is attractive for marketers because then they can promote greener products. And that's, I mean, there are truly sustainable products that are on the market. But there is a huge confusion between the truly green products and services and the green-washed ones, and that's really a problem for consumers.
In fact, a sweep of websites touting green practices by EU authorities found that in 42 percent of cases, the claims were exaggerated, false, or deceptive. Like in this example: In 2015, Nordstrom, Bed Bath & Beyond, J.C. Penney, and Backcountry.com agreed to pay a total of $1.3 million in fines for mislabeling clothes that were made of rayon as bamboo. While bamboo might be the base material, it's treated with toxic chemicals to turn it into the silky fabric that they were selling.
And while some companies may be trying to pull one over on consumers, some industry experts say it's more down to exaggeration or misunderstanding the rules. BSR works with hundreds of the world's biggest companies, including Google, Coca-Cola, and GM, on sustainability issues. "There certainly are companies that may see a potential to advertise according to sustainability or green credentials that they don't necessarily have. But I also think there's a lot of companies who are doing the hard work and wanting to truly explain that to consumers, and they don't always have a clear set of guidelines or clear set of terminology to be able to do that with."
"In many ways, the companies who do this well are integrating sustainability into how they compete, how they create value, how they attract employees, how they attract customers, how they identify new markets, how they get new capital. And so it really is a 360 approach to how they run their business."
So, what more can be done to separate the green facts from the greenwashing fiction? I've been speaking with Cecilia Parker Aaron, who's the Director for Consumer Protection at the Competition and Markets Authority. It's the UK's competition regulator. So, Cecilia, it's great to have you with us. Uh, thanks for being on Talking Business This Week. Um, and look, I want to talk about greenwashing because there are so many terms that are often banded around, aren't there, by companies right now? And yet, it strikes me, there is no real definition of a lot of these words. How important is it to define what firms are actually talking about?
So, there's a lot going on there. There are a number of different certification schemes available in different sectors that businesses can think about and going out and applying for. And, but certainly, that is something that I think we're likely to see growing. And the other thing that I think is, is going to become much more important is life cycle assessment and having, having somebody come in and actually audit your supply chain so that you can really understand what, and what impact your product is having from the point that it's created through until the point that it's disposed of.
Do you think it would help if firms were required to disclose some of their environmental credentials, their ethical credentials, alongside their financial results? A sort of disclosure based on what they've achieved in that year, not just purely financial?
I definitely think that would, that would move us in the right direction. Um, we obviously encourage businesses to disclose their environmental information and looking at, uh, from a consumer protection law perspective. And, but there's no positive obligation on them to do that in every case at the moment. And I think the other thing is, though, that with disclosing and environmental performance through, um, corporate reports, that kind of thing, it won't necessarily get to the consumers that are actually shopping. So, and we also need to find ways of, of, um, of requiring businesses to disclose that information.
Do you think firms should be certified before they're able to use terms like ethical or sustainable?
I think it's, it's difficult to say that certification is the only solution. Certainly, it's one solution. And I think, um, at the introduction of standardized definitions for some of these, um, uh, terms, as you say, like ethical, like sustainable, and would certainly, and would certainly also help. And if you could then hold businesses to account and make sure that they were using the term correctly, that would also be a way of addressing the problem.
And one of the big issues, and we know this is a problem in so many different ways, but this is a global problem. And yet the measure, the certification for some of these claims, varies from country to country. And particularly when we talk about things like supply chains, how can anyone trust that somewhere in the supply chain, there's not a huge problem that's being hidden, in some respects, by these claims of being ethical or green?
Again, I think that's, it's a really fair point. Um, international supply chains and also simply customers shopping across borders is creating additional challenges in this space. And the International Consumer Protection Enforcement Network is working together to try and, um, ensure that we are all, um, telling the same story and, and pushing the same messages to businesses.
How confident are you that we'll ever be at a stage where there is one standardized definition around the world of some of these key terms? Is it ever likely?
I would like to say I'm confident, but the truth is, I think it is a very challenging thing to achieve. And there are very few cases where we have a single standard and for, for performance across the world. And I wonder when it comes to ethical or sustainable claims, what are the biggest hurdles to making that global standardized definition actually a reality?
So, I think probably the first thing is, is going to be, um, actually just agreeing what the standards should, should be. Um, you can imagine that, um, what some countries would think of a sustainable or ethical is going to be very different to, um, to what other countries, um, think about.
Well, one good example, I suppose, is from the US regulator. It found that a trash bag, a bin bag, was labeled as recyclable. But we all know, once it's full of trash, you're not going to separate that bag from the rubbish that will probably not be recyclable inside of it. And so they were making claims that actually weren't going to happen in reality. There's some really interesting problems out there, um, with vague language and with, um, as wishful thinking as well. So, I mean, I think the example from the US is great. And we've also seen examples recently from, um, both New Zealand and Canada, looking at disposable coffee cups and at coffee pods, where, um, claims were being made that, and the products are recyclable, but in reality, um, the, uh, the recycling local recycling facilities cannot cope with the, with the recycling of that particular product.
And if you're not happy with what you see, what power do you have to change the labeling, the branding, or how the business advertises?
So, we can, um, ask the business to, um, as you say, change the labeling, change the way it's advertising. We can also ask them to look at their in-house systems. So, we can ask them to think about, um, putting in place compliance systems internally to make sure that similar mistakes aren't made in future. We can ask them to publish better information for consumers or, or, um, to draw attention to the fact that they've made, made a mistake. And in some circumstances, we can even ask them to either pay redress directly to consumers or to, um, for example, consumer charities.
The process that you've painted, though, is not a fast one, is it? And sometimes it can take years by the time you've done your investigation, come up with a conclusion, then being able to enforce some action on a company. And I wonder whether then the damage is already done.
I think it's true that, um, at least today in the UK, to go through the full enforcement process can be quite a time-consuming, um, process. But, and but actually, we have other levers we can pull in terms of engaging with businesses on a voluntary basis and, and I think really encouraging them to move quickly. And we've been quite successful in doing that and securing results quite, quite quickly for businesses. And obviously, most businesses don't want to be publicized as doing the wrong thing. And if they think there's a risk of that happening, and they'll very quickly respond to those moves.
I want to talk about fashion because we know the fashion industry is one of the biggest problems when it comes to sustainability and the environment. Um, there's some astonishing figures. Wise Up To Waste suggesting 10,000 items of clothing are sent to landfill every five minutes. How would you even start to get a grip on something like that when a company wants to distance itself from its supply chain and the problems way down the line, but it might be trying to sell those products as sustainable or ethical in the retail outlets?
The fashion sector really is a challenge for us. And it's, that's one of the reasons why we've, we've made that our first priority for enforcement. UK consumers are buying 54 million pounds, sorry, billion pounds worth of fashion products every year. And we know that, um, fashion is a massive contributor to global emissions. And so really, for that sector, we are going to be looking closely at what businesses are doing, at the sustainability measures, messages that they are sharing, the claims that they are making, and at the overall context. So, we will want them to demonstrate to us where they are claiming that a particular product is sustainable, and that actually, it is, it is genuinely sustainable from, from cradle to grave, and that customers can trust that claim.
If you could have anything on your wish list right now, things that are achievable in the short term, that would change the way companies look at, you know, sustainability, the way that you're able to regulate them and keep an eye on their activities, what would it be? What do you need?
Standardization. So, standardization in terms of the definitions of the terminology, as we talked about at the beginning, and making sure that businesses are all using the same terms, um, in the same way. And also standardization of measurement, how you get to, um, measure a carbon footprint, for example, or how you measure sustainability for any given product. And standardization of how that information is consumed, communicated to consumers, so that if I go into a shop, I can take two products and I can see which one is the, is the least damaging to the environment, and I can make my choice.