How to avoid greenwashing as a startup
Greenwashing poses a huge risk to brand reputation, investment prospects and the planet, yet often we think of it as a crime only committed by large, faceless corporations. But the broad definition of the term and increasingly tighter regulations means businesses of all sizes may find themselves subject to greenwashing allegations. There are, however, several steps businesses can take to feel confident in their green claims. Hugo Kimber, CEO of carbon accounting firm Carbon Responsible offers his advice.
Set clear, achievable targets
The past 3-5 years in particular has seen companies and investment managers rush to make sustainability a focus. As part of this, many businesses have set overly-ambitious targets, without a means of measuring their progress. To avoid greenwashing allegations, businesses must ensure they aren’t overpromising and should instead set achievable, provable targets. A big part of this is getting comfortable with smaller wins while building out a wider net zero strategy. While achieving net zero by 2050 is the eventual goal, companies must be setting and reaching targets in the near term. For this, ‘by 2030’ is a helpful interim target, alongside carving out smaller, achievable goals for the next 12 months and 2-3 years to stay on track.
When deciding on these targets, businesses must create a baseline based on existing data, be transparent about it, and get in front of any risk areas. Then, once a baseline has been established, targets should re-evaluated and amended as necessary to reflect reality.
If you find yourself committed to what you now realise are unachievable targets, be transparent about it. Reassess your baseline and identify what's possible, but make sure that consumers, investors and employees all understand why you've changed tack. Explain how this new strategy is a sounder approach to a problem you're still wholly committed to solving. If you equivocate here, you risk appearing to backtrack or renege on your environmental pledges.
Join the transition to a decarbonised economy
An obvious start point for companies genuinely wanting to become greener is to join the transition to a decarbonised economy. Carbon is not the only ESG issue facing companies, but it is one where strong accounting standards and methodologies have evolved over many years. Whether it’s reducing direct emissions or switching to low emissions service providers, having a means of measuring the success of these changes is critical. Robust data ensures companies can have confidence in their green claims.
Use clear, unambiguous language
Companies should avoid using vague or misleading claims like "eco-friendly" or "green" without providing specific details or evidence to support these claims. The proliferation of these terms over the last few years has undermined their value as markers of sustainable business practices. The language used to describe a product or service’s environmental impact should always be clear and unambiguous. Companies should also consider how their visual marketing materials, like graphics, might mislead consumers.
Avoid greenwashing by omission
Consider whether your claims are hiding important information. This might mean selectively promoting green initiatives that might reasonably lead consumers to think a business is achieving greater environmental impact than it is. Make sure not to leave out any information so that customers are able to see the full picture and make an informed choice.
Consider your operations as a whole
Make sure to consider the environmental impact of the full life cycle of a product or service – from creation to disposal – before making any claims. This might mean looking at supply chains in more detail and beginning to probe your scope 3 emissions.
Stay ahead of the regulatory curve
Many businesses already go beyond their mandatory reporting requirements by engaging in voluntary disclosures. Familiarity with what might be expected of your business in the next few years (rather than just the here and now) will be increasingly important for setting logical targets and avoiding greenwashing allegations as expectations change. Businesses of all sizes will benefit from getting familiar with what compliance might look like in a few years.
To find out if your business is in danger of greenwashing, head over to Carbon Responsible’s website to take their free online test.