Greenwash: 40% of websites 'misleading' consumers on environmental credentials
An annual sweep of corporate websites has found that four in ten are providing information on environmental criteria that could be considered misleading and potentially breaking consumer laws.
The International Consumer Protection Enforcement Network (ICPEN) hosts annual website “sweeps”, where brands are examined to remove potentially fraudulent, deceptive or unfair online conduct.
For the first time, ICPEN has focused on environmental claims and whether they provide accurate information to consumers. Led by the Competition and Markets Authority (CMA) and The Netherlands Authority for Consumers and Markets (ACM) the latest sweep of almost 500 websites found that 40% were posting potentially misleading environmental information.
Websites ranged from environmental product and service providers to clothes, cosmetics and food brands. The sweep found that 40% of the websites posted vague claims that failed to define “eco”, “sustainable” or “natural products”. Others, posted own-brand sustainability labels that were not associated with accredited organisations, while many omitted key information such as the carbon footprint of products.
The CMA’s chief executive Andrea Coscelli said: “Too many websites appear to be pushing misleading claims onto consumers, which means that companies offering products with a genuine environmental benefit are not getting the customers they deserve. People should be able to easily choose between those companies who are doing the right thing for the environment and those who are not.
“This is a global issue, so it’s only right that we look at it in a global context. Our joint work with other regulators will help us identify the big issues facing consumers and protect people from paying a premium for fake ‘eco-friendly’ products.”
The CMA’s own investigation into misleading environmental claims is still ongoing and the authority will publish guidance on transparency for UK businesses later this year.
Investors are also scrutinising corporate environmental claims, cautious that greenwash is on the rise as the environmental agenda becomes more critical for businesses.
Last year, a survey of 650 institutional investors with more than $25.9trn in assets under management globally found that investor-corporate engagement on environmental issues is growing - but so is frustration over greenwash.
A survey conducted by Schroders found that institutional investors face a multitude of challenges on the shared journey for sustainable development. Difficulty managing and measuring risk – frequently due to a lack of good data and corporate and supplier transparency – was highlighted by most respondents. The biggest challenge was found to be greenwashing, cited by six in ten respondents.
Experts have repeatedly claimed that greenwashing has become more common in recent years and that this trend will only accelerate in the coming years, as consumer and investor demands for sustainable products outpace corporate action. A recent survey of 1,000 people by Futerra found that most want to choose more eco-friendly options, but more than two-fifths think companies make it harder to do so, despite their sustainability commitments.