Greenwashing is an ongoing issue that investors and stakeholders are becoming increasingly watchful for. Claims of being progressive when it comes to ESG will be more closely examined and may even be labelled as greenwashing, whether it is intentional or not on the part of the organisation. Therefore, for a company that wants to effectively and legitimately communicate its ESG efforts, there is a need to be transparent and ready to back their words with data.

To start, what is greenwashing and how do you avoid it?

Greenwashing is a communication and marketing strategy that is crafted to make an organisation appear more environmentally friendly than they really are and forge a responsible image among the public. It often consists of putting a deceptive spin on their communications. This could range in severity from having exaggerated but partly true messages to as serious as having completely unsubstantiated ESG claims.

There are three key areas to consider when crafting your messaging to avoid being accused of greenwashing:

Don’t exaggerate or embellish messages
Ensure that measurement metrics have been established and share data that shows real progress against the organisation’s ESG goals
Be transparent and proactive in reporting ESG efforts, honestly showing both successes and areas where progress has fallen short but can be improved

Don’t fall into the trap of exaggeration

An exaggerated and embellished claim opens it up to questions about its legitimacy, even if it has a basis in truth. The choice of words matters to a discerning audience. For example, vague terms such as “all-natural” and “eco-friendly” or lofty declarations such as “zero emissions” can trigger scepticism in its veracity, because there have been many cases where such terminology was found to be greenwashing.

One example of this comes from Fiji Water, a US brand which faced a lawsuit after deceptively marketing itself as “carbon negative”. It was revealed that Fiji Water had exaggerated its claim by purchasing carbon credits to give the impression that it removes more carbon than it releases. There was some truth to Fiji’s stated goals, it’s just that the brand’s efforts towards becoming “carbon negative” won’t be fully realised until 2037.

That’s why its important to keep the wording down-to-earth and realistic, because closer investigation by stakeholders on exaggerated claims can have massively damaging reputational effects.

Ensure there is appropriate data to support the organisation’s ESG goals

Data plays a crucial role in ESG communications because it provides credibility and clear metrics that show progress in reaching an ESG goal. Without data, any claim made can be painted as empty promises. The amount of data needed to support a pledge grows depending on the scale of ambition. For example, a net-zero target should include multiple supporting data points that detail what is being done to reach the goal, while a target like creating a recycling program requires less but more concise data points.

However, this is not to say that misleading, irrelevant or weak data points should be used. The data used needs to be carefully selected to ensure that it not only supports the claim being made, but also aligns with the overall ESG direction of your organisation. Consistency is key.

Be transparent and proactive in reporting ESG efforts

When consumers, investors and partners look beyond the surface (products and marketing) and research into the core values of your organisation, they will want to know if those values are aligned to the ESG efforts being taken. Its important to be transparent and lay out realistic steps in reaching ESG targets. This means providing metrics that can clearly show the progress that is being made towards reaching well defined goals.

Transparency should also extend to the messaging, both internally and externally. If there are challenges that need to be overcome to reach an ESG goal, or if there is a need to make adjustments to your ESG strategy, there will be an expectation from your stakeholders to be transparent and avoid surprises.

We hope you found this article on avoiding greenwashing useful and informative. If you would like to learn more about how we can help you with ESG communications, please contact us.

How to avoid greenwashing