Beyond the Buzzwords: Why Accurate Environmental Claims Matter

This article is the first in a series on accurate environmental claims. All articles in this series include:

Part 1: Why Accurate Environmental Claims Matter

I was recently gifted a reusable, insulated travel mug. The box and informational leaflet included numerous claims of “sustainable,” and “eco-friendly.” Excited and curious, I wondered what made it more sustainable. Were the materials sourced differently than traditional travel mugs? Was reusable energy used to manufacture it? Could it be recycled? Was it made with fewer harmful chemicals?

I eventually found an asterisk in small print: “Compared to disposable coffee cups.” Disappointment sunk in. The mission was worthy—to help reduce waste—but without clearly specifying how it was more sustainable, I initially made my own assumptions, namely that its environmental benefits were compared to other reusable mugs, not disposable coffee cups.

Many brands make environmental claims, but they frequently lack specificity, clear comparisons, or validated data. The result is that consumers have become increasingly distrustful of companies that claim to be sustainable. In this article, the first in a four-part series on environmental claims, I explain the importance of accuracy, why business leaders and communicators need to become more educated on the topic of sustainability, and where to begin.

Environmental Claims are Advertising Claims

It’s easy to forget that environmental claims are merely a subset of advertising claims, which are regulated and required to be truthful. The Federal Trade Commission (FTC), which is the legislative body in the U.S. responsible for overseeing marketing and advertising, states:

“Claims must be truthful, cannot be deceptive or unfair, and must be evidence-based.”

Just as we can’t make a false or deceptive claim about product performance, we can’t make one about environmental attributes.

One reason we see so many misleading environmental claims is that it is a complex and technical topic. Those responsible for crafting content (agencies, marketers, business leaders) are rarely well-educated on the topic of sustainability. While most businesses have product experts such as engineers, designers, or scientists to research and validate product performance, companies often lack professionals with sustainability expertise. Even if experts do exist, their knowledge is infrequently translated to those making external claims. The culprit is a lack of knowledge among communicators — not an intentional effort to deceive. But it’s a knowledge gap that’s critical we close.

Pitfalls and Consequences of Green Claims

One consequence of inaccurate environmental claims is that companies are accused of greenwashing—misleading an audience by creating the perception of a better environmental profile than reality.

Examples include advertising an environmental attribute that is vague or unsubstantiated or promoting a part of the business that has environmental improvements when the majority of the business has a huge negative footprint.

Greenwashing is often perceived as intentional, even when it’s not. Consequences range from reputational damage to lawsuits, which can lead to fines and having to remove deceptive advertising. In the second article in this series, we’ll more deeply explore the topic of greenwashing and share examples.

Why Brands Are Jumping On Board

Consumers are becoming more conscious of their role in improving the environment and desire products that have less packaging, are sourced sustainably, and use renewable energy. According to studies by McKinsey and Nielsen IQ, 78% of respondents said they placed importance on a sustainable lifestyle and more than 60% of U.S. consumers said they were willing to spend more money on a product packaged sustainably. When it comes to actual spending, products that made Environmental, Social, and Governance (ESG)-related claims showed stronger cumulative growth from 2018-2022 than those without (28 percent vs. 20 percent cumulative growth, respectively). The chart below shows the difference in compound annual growth rate (CAGR) over this 5-year time period.

Additionally, according to the NYU Stern Center for Sustainable Business’s 2022 Sustainable Market Share Index, “products marketed as sustainable grew ~2x faster than products not marketed as sustainable.” As such, more brands are including environmental attributes in brand communication to capture reputational benefit, address customer desires, and increase sales.

Consumers Increasingly Distrust Environmental Claims

However, with the proliferation of “green” brands and sustainable claims, distrust is growing. According to GreenPrint’s 2022 Business of Sustainability Index, “only 38% believe companies when they make claims on environmental friendliness,” compared to 47 percent in 2021. Interestingly, corporate statements by CEOs and Sustainability Reports are considered particularly untrustworthy at 2% and 14%, respectively.

Source: GreenPrint Business of Sustainability Index 2022

What’s more, executives agree there’s reason for distrust. Notably, in a global survey of executives by The Harris Poll for Google Cloud, 58% of business leaders said their organizations have “overstated their sustainability efforts.” Clearly, this is an issue we need to address. But how?

To build consumer trust, we need to ensure we are accurate and transparent in the ways in which our products and services improve or reduce environmental harm.

Moreover, to actually improve the environment and reduce our negative impact, we need to ensure that we are making meaningful improvements rather than simply capitalizing on perceived impact.

Where to Begin: No Product is “More Sustainable”

As a business leader and consumer, you may be surprised to learn that brands can’t claim a product is more sustainable. Sustainability attributes are specific, complex, and relative. Think of it this way: More sustainable compared to what?

Consider the claim that a product is “better.” We all know to ask: Better how? Is it cheaper? Faster? More Durable? Easier to use? Safer? Better is so broad and vague—and at this point, overused—that it’s essentially unhelpful because it doesn’t give customers the information they need to make an informed purchase decision.

Similarly, “more sustainable” is broad and vague. Is it less energy? Less waste? Less water? Fewer materials? And compared to what? Most brands rely on the customer perception that sustainability is a linear spectrum that ranges from “bad for the environment” to “good for the environment,” where the latter equals “sustainable.” The reality is that sustainability is a complex matrix of attributes that constantly changes based on the frame of reference. A foundational concept to help understand the environmental impact of a product is life cycle thinking. In the third article in this series, I’ll explain this concept and how it can help you understand the nuances of communicating sustainability clearly.

Because there is no simple answer on what is “more sustainable” and consumers don’t realize this, the FTC prohibits companies from making general environmental claims like “sustainable” or “better for the environment” without clearly specifying a particular attribute supported by science-based evidence.” The FTC states: “It is deceptive to misrepresent, directly or by implication, that a product, package, or service offers a general environmental benefit. In the fourth article in this series, we’ll dive into the “Green Guides,” the FTC’s guidance on environmental claims.

Future Articles in this Series will focus on:

Part 2: Unmasking Greenwashing: Explore the concept, learn from real examples, and discover strategies to steer clear of deceptive environmental claims

Part 3: Embracing Life-Cycle Thinking: Explore how to evaluate a product’s environmental impacts across its entire life cycle, empowering you to make informed and transparent sustainability claims

Part 4: Navigating FTC's Green Guides: Uncover the essentials of the Federal Trade Commission’s guidelines, ensuring your business crafts truthful and transparent environmental claims while sidestepping potential pitfalls.

Stay Tuned for Next Month’s Article on Unmasking Greenwashing!