As we all become more aware of our impact on the planet, genuine green claims have become essential for businesses looking to connect with eco-conscious consumers. Today, making environmentally friendly claims is not enough; they must be backed by solid evidence to build credibility. With an array of standards and regulations emerging worldwide, understanding how to validate these claims is crucial. This blog post offers insights into effectively navigating these waters.
The Importance of Green Claims
Green claims are statements made by a company about the environmental benefits of its products or services. They play a critical role in influencing consumer choices, particularly as 77% of consumers prioritise sustainability when making purchasing decisions. However, vague claims can lead to accusations of "greenwashing," which can severely harm a brand's reputation.
Ensuring that green claims are accurate and verifiable is vital. In fact, 93% of consumers are likely to be loyal to a brand that commits to sustainability. This trust doesn't just foster loyalty; it can also contribute to a company's long-term success and its image as an environmentally responsible entity.
Understanding Current Legal Standards for Green Claims
In a landscape that's becoming more eco-conscious, various organizations and regulatory bodies have established guidelines for green claims. Here are some of the most important legal standards to be aware of, depending on your market:
Australian Competition and Consumer Commission
The ACCC sets out four general principals for green claims in its December 2023 advisory:
Environmental and sustainability claims must be true, accurate and based on reasonable grounds.
Businesses have responsibilities under the Australian Consumer Law not to make false or misleading claims.
A business needs to consider the claims it uses. It also needs to consider the information that’s left out and the visual elements, colours and logos used.
‘Greenwashing’ is where a business uses any claim, or omits key information, that makes a product or service seem better or less harmful for the environment than it really is.
Clear and precise language is critical. For instance, instead of merely describing a product as “eco-friendly,” specific explanations should be provided, such as “made from 70% recycled materials,” which informs consumers directly about what makes the product better for the environment.
European Commission Green Claim Laws - Directive 2024/825
The directive is based on three primary goals:
Environmental Transition: Increase the level of environmental protection and contribute to accelerating the green transition towards a circular, clean, and climate-neutral economy in the EU.
Consumer Protection: Protect consumers from greenwashing and enable them to contribute to the green transition by making informed purchasing decisions.
Legal Certainty: Improve legal certainty and standardize the substantiation of environmental claims, giving credit to businesses that genuinely increase their environmental sustainability.
The directive will be implemented by regulation on 27 March 2026, so companies selling in Europe have about 18 months to ensure their green claims comply with the directive.
Federal Trade Commission (FTC) Green Guides - USA
In the U.S., businesses must adhere to the FTC Green Guides, which provide advice on advertising environmental claims. Misleading statements not only risk stiff penalties but can also lose customer trust. The FTC encourages transparency and scientific backing for claims.
For example, if a company wishes to market a product as "100% organic," they must provide comprehensive documentation proving that all components meet organic standards. Such clarity helps consumers feel assured of their buying decisions. In the very litigious American market, precision and solid science is essential. Fines for breaches are commonly in the millions.
New Zealand Commerce Commission Green Claim Guidelines
The New Zealand Commerce Commission July 2020 Environmental Claims Guidelines - A Guide for Traders also sets out clear principles for green claims:
Be truthful and accurate
Be specific
Substantiate your claims
Use plain language
Do not exaggerate
Take care when relying on tests or surveys
Consider the overall impression
Further material is included on what the authority expects to see in life-cycle claims, comparative claims, branding and certification stamps. Green Tick® Certification Limited's Chief Scientist was on the team that prepared the original green claim standards for New Zealand.
United Kingdom Green Claim Code
The latest version of the UK Green Claim Code sets out common principles for declarations very similar to the others summarised previously. The UK principles are:
Be truthful and accurate: Businesses must live up to the claims they make about their products, services, brands and activities
Be clear and unambiguous: The meaning that a consumer is likely to take from a product’s messaging and the credentials of that product should match
Not omit or hide important information: Claims must not prevent someone from making an informed choice because of the information they leave out
Only make fair and meaningful comparisons: Any products compared should meet the same needs or be intended for the same purpose
Consider the full life cycle of the product: When making claims, businesses must consider the total impact of a product or service. Claims can be misleading where they don’t reflect the overall impact or where they focus on one aspect of it but not another
Be substantiated: Businesses should be able to back up their claims with robust, credible and up to date evidence
As always, the devil is in the detail, so professional help in decoding what these standards mean for your business is vital. Green Tick® Certification automatically complies with all official green claim standards.
Best Practices for Validating Green Claims
Understanding standards is only the first part; adopting best practices is essential for ensuring your claims hold water. Here are effective strategies:
Conduct a Comprehensive Internal Audit
Start with a thorough internal audit of your product or service. Identify areas where environmental claims are made, such as packaging, sourcing, or production methods. By pinpointing and validating these claims, businesses can identify potential weaknesses in their marketing. Our sister company GreenXperts Limited has an ISO-compliant system which contains audit platforms tailored to meet the requirements of authorities and Green Tick® Certification. Click on the MySMS logo above to contact GreenXperts for help.
Engage Third-Party Certifier - Green Tick® Certification Limited
Collaborating with recognized third-party certifiers boosts the credibility of green claims. For instance, a large majority - 72% - of consumers trust third-party certifications more than brand claims alone. Green Tick® Certification has been designed to provide you with instantly recognised and legally robust third-party certification globally.
Invest in Transparent Reporting
Being open about your environmental impact creates trust. Disclose details about your materials, energy consumption, and waste reduction efforts. Regular sustainability reporting can show consumers your commitment to lifelong improvements. Once MySMS is set up, it can automatically generate these reports for you according to customised settings. This will save time and money, and reduce risks and potential legal costs. The image left shows the application template for Green Tick® Certification.
Train Employees
Educating your workforce on sustainability standards is paramount. Ensure your team understands how to accurately communicate your company's green initiatives. For example, if employees share detailed, verified information about a product's eco-friendly materials on a life-cycle basis, it boosts customer confidence and team alignment around sustainability goals. We can help train employees on sustainability management.
Challenges Companies May Face
Validating green claims can be a challenging endeavour. Here are some common obstacles:
Rapidly Evolving Standards
The sustainability landscape is always changing, which makes it hard for companies to stay compliant. Regular reviews of current guidelines and participation in training can help organizations keep up with new requirements and avoid any legal issues. Some standards have been updated regularly over the last 25 years, especially those in Europe.
The Risk of Greenwashing
While there’s a temptation to overstate sustainability efforts, the risks of greenwashing can be severe. According to a 2021 study, 57% of consumers reported that they would stop supporting a brand if they suspected greenwashing. Upholding honesty in claims protects both reputation and finances. Fines of $USD 11 million have recently been imposed on one US-based investment management company.
Consumer Skepticism
As awareness of greenwashing grows, consumer trust is fragile. Companies must not only validate their claims but also foster authentic relationships with their customers that centre on honesty and transparency. Green Tick Certification's policy to make all essential information freely available in an easily understood format has meant no problems with consumer access to certification information have ever occurred.
Path Forward for Sustainability
In today's eco-sensitive market, effectively validating green claims (green paint) is not just beneficial; it is necessary for gaining consumer trust and loyalty. By knowledgeably navigating the regulations, implementing best practices, and promoting transparency, businesses can authenticate their green claims. False claims can also be made in health and safety (red and yellow paint) and for climate change action (blue paint), so it is important that all of these aspects are carefully curated as well. Green Tick® covers all of these areas.
Ultimately, the goal is to create a trustworthy relationship that can empower sustainability initiatives. As green standards evolve, so must our commitment to them. By validating these claims proactively, organizations will not only protect their reputations but can also turn their sustainability efforts into a competitive advantage.
Remember, sustainability is not a mere trend but a vital pathway toward responsible, impactful business practices that benefit the planet and its people.
The Green Tick® Certification Scheme has kept ahead of the market and legal requirements for green claims since its inception 26 years ago. We remain fully focused on staying ahead of the game so our certifications will continue to be robust, long lasting, trustworthy, and immediately obvious to consumers.
Kommentarer