Greenwashing takes a substantial bite out of large businesses’ profits in the UK this year, calling for heightened efforts to combat the phenomenon and abide by the laws of the EU and the CMA.
In light of ever-rising concerns over the greenwashing phenomenon, UK authorities have been greenlighted to take 10 per cent of a commercial defendant’s global turnover in case accusations of greenwashing are validated. Recently, around four in ten large UK businesses have been found guilty of conducting greenwashing practices in 2024 amidst harsher consumer protection laws from the EU and the Competition and Markets Authority (CMA). Nevertheless, such faults can take boundless forms, including mislabelled products, unclear messages, and pollution test cheating. According to legal environmental experts from the UK, telling the wheat from the chaff is challenging in the country’s legal landscape, which doesn’t offer a precise definition of these practices, all the more as the regulatory environment changes fast.
Audiences should remember that the EU has prohibited greenwashing through the Empowering Consumers to meet the Green Transition Directive. What is this new Directive about, and how can businesses prevent greenwashing fines and reputational damage?
What’s the purpose of the new Directive?
The EU has taken the battle to eradicate greenwashing to the next level with new directives that encourage consumers to embrace the green transition by calling against unjust, unhealthy practices and prioritizing information accuracy. A new law passed this year in February offers Member States two years to carry out the processes needed to activate and introduce the regimentations nationally.
The initiative bans large businesses from providing deceptive service and product details, aligned with the Union’s goals of fostering a clean, green, and circular economy. Hence, customers receive more power to either cherish or punish the businesses they interact with, depending on how they meet today’s eco standards. Greenwashing techniques can take endless forms, as you will see, and the UK regulatory framework lacks an exact description and interpretation in this sense.
Still, to ensure consumers are correctly educated, businesses must advance their product labelling and clarify guarantee info. A guarantee extension is also being implemented.
How should the UK’s large businesses avoid greenwashing?
It’s not just the UK marketplace that’s fighting greenwashing. Two in three American business runners confirmed that their enterprises were involved in greenwashing in 2022. With the rising scepticism among the younger audience regarding environmental and social commercial promises, businesses must raise the bar in their offerings and services to remain relevant. According to a McKinsey study, numerous consumers don’t mind boycotting companies that fail to meet environmentally friendly standards. 88 per cent of younger consumers doubt companies’ green credentials.
Amidst all this grey chaos that may make green requirements feel like impossible red tape, the UK’s large businesses have many examples to follow to act on climate change and attract future consumers. Large-scale implemented solutions bring more advantages than thought, and the bottom lines often prove this theory. Take the example of numerous UK businesses that employ the best solutions to remove cardboard waste economically, ultimately saving commercial space, protecting employees, and improving their brand reputation, among other benefits. These sought-after outcomes ultimately reflect higher revenue, reduced capital leaks, diminished waste storage costs, enhanced personnel productivity, and more.
Several on-point solutions every genuine business should check off
Mismanaged waste is the largest culprit behind today’s environmental challenges, so it’s safe to say that looking into these areas significantly improves the green credentials of UK businesses. Here are several other clever solutions future-oriented UK businesses rely on to protect their legacy from the aftermaths of greenwashing.
- Avoiding deceptive, unclear statements like ‘green’ or ‘environmentally’ friendly, which offer zero value to consumers
- Staying transparent with consumers when working on green objectives. Consumers prefer the naked truth, even if it’s not the nicest one
- Establishing achievable objectives that can be tracked, assessed, and changed to drive actual results
- Get the team on board to find ways to improve the audience’s education
- Undergo internal and external audits and gain sustainable certifications
- Audit supply chains, since they’re the largest emission releasers
- Only make statements that are backed by data
- Share reports with stakeholders, regulators, and consumers.
Unilever: Misleadingly used eco-suggestive imagery and colours
Unilever, the owner of Lynx and Dove, is under investigation for ‘greenwashing’ claims amidst concerns of consumer misguiding business techniques. A UK competition watchdog disclosed that the British multinational company could make spoof claims about several of its sold household products, drinks, foods, and toiletries. Despite the defendant’s consequent denial, the green leaves and other symbols suggestive of environmental friendliness remain a cause of concern and remind us of the power of misleading imagery and colours, whether intentional or not.
This operation isn’t just a wake-up call for the giant manufacturer but also for every business running in the UK. It is, however, just a minuscule example. So many greenwashing practices are overlooked these days, yet for many, it’s only a matter of time until they are disclosed. Worldwide clothing retailer H&M, for instance, got sued two years ago for misleading customers into thinking their clothing lines were more eco-friendly and environmentally conscious. Examples like these are boundless.
4 in 10 do it wrong
In 2020, a suit of consumer protection agencies gathered to carry out the survey that would turn to evidence of the wrongdoings of large UK businesses undertaking greenwashing practices. Hence, the study discovered that four in 10 international companies made deceptive statements.
Boohoo, Asos, and Unilever are just two examples of companies that caught the attention of the CMA ever since. The agency devoted around 29,471 working hours and a £1.3 million budget to conduct the reports and find proof to support the accusations.
Endnote
Green claims must be demonstrated, and for a conclusion to be drawn, numerous resources are spent during the A-to-Z processes. These days, the UK business landscape is working on upping their green statement communications to avoid fines, so optimistically, consumers will deal with fewer and fewer unjust cases like those prosecuted to date.
