Misleading greenwashing on the rise
Sustainability claims on food packaging are increasing, but they often have no evidence, writes journalist David Burrows
Europeans want to buy and eat sustainable foods, and a fair number are willing to pay a premium for them. They are also highly receptive to information about products pitched as ‘sustainable’. And according to a 2020 Eurobarometer survey of over 27,000 people in 27 countries some 88% felt information on sustainability should be compulsory on food labels.
Food companies want to give consumers what they want, so it’s not surprising to hear that the number of products with sustainability claims in packaged food has been steadily increasing since 2020. But are these claims all they are cracked up to be and what are the risks of misleading or ‘greenwashing’ consumers? These are questions that regulators (and consumers) across the globe are asking. A study for the European Commission in 2020 found that 53.3% of the environmental claims in the EU were “vague, misleading or unfounded” and 40% were unsubstantiated.
Misleading green claims are “everywhere”, says Frans Timmermans, executive vice-president for the European Green Deal, who cites: “carbon-neutral bananas, bee-friendly juices and 100% CO2-compensated deliveries” as examples.
In other words, they were greenwash. There are also more than 900 labelling schemes for food, and these are “subject to different levels of robustness, supervision and transparency”, the Commission noted. Rules on making such voluntary green claims are scant which has led to the worrying levels of misleading green claims, the Commission noted. Misleading green claims are “everywhere”, says Frans Timmermans, executive vice-president for the European Green Deal, who cites: “carbon-neutral bananas, bee-friendly juices and 100% CO2-compensated deliveries” as examples.
“Unfortunately, way too often these claims are made with no evidence and justification whatsoever,” he adds. Such greenwashing puts companies making genuinely sustainable products at a disadvantage. It also misleads consumers who are looking to change their buying patterns. With every greenwashing accusation or headline, trust erodes and puts truly sustainable food on the back foot. Whether this amounts to food fraud is debatable – it’s a “grey area”, says Kimberly Carey Coffin, global technical director (supply chain assurance) at global assurance provider LRQA. Currently there appears to be no immediate food safety risks from greenwashing, though it can certainly derail efforts to shift to more sustainable purchases and erode trust in any claims.
Younger shoppers are particularly wary of the tricks brands may use and have become increasingly sceptical about the green claims made. The Future Food Movement youth advisory board, made of up 17 UK school children, recently discussed greenwashing. “If I found out a company was guilty of greenwashing, I wouldn’t be shocked as it is a marketing tactic companies use to boost profits and improve their outlook,” said one member of the board. They also talked of exaggerations in corporate communications designed to “conceal the lack of progress,” and how they are looking for clear cues and statements.
It’s not easy to sort the greenwash from the genuine but there are a few rules of thumb. According to the UK Green Claims Code, published by the Competition and Markets Authority, shoppers shouldn’t trust vague terms and should look for supporting evidence. It also notes how “images of wildlife, or a logo with a leaf, can easily convince you that you’re making an environmentally friendly choice”.
Indeed, one of my favourite studies on this topic provides a glimpse of the power a green halo can have on people’s decision-making. In 2013, researchers at the University of Gävle in Sweden conducted a “fun” experiment in which students were given two cups of coffee: they were told one was ‘eco-friendly’ and the other was not. Most said they preferred the taste of the eco-friendly one but both coffees were in fact identical. Half the participants were also told they had preferred the non-eco-friendly option and those that placed a high value on sustainability said they’d still pay more for the eco-friendly coffee despite not liking it as much.
The study showed not only the power of eco-labelling but also the “greenwashing potential,” the researchers told me. Imagine what the world’s major food brands and their huge marketing budgets could do – and indeed some are doing – with consumers willing to open their wallets up for greener products and few rules to prevent elaboration.
Greenwashing provides a “veneer of sustainability for an industry that is responsible for a third of global methane emissions and is the main driver of deforestation”, Urbancic explains.
Research by McKinsey and Nielsen IQ recently showed that products making ESG-related environmental, social and governance) claims accounted for 56% of all growth across five years of US sales spanning 44,000 brands. They assessed products across the food, beverage, personal care, and household categories and found those making such claims also averaged 28% cumulative growth between 2017 and 2022, versus 20% for products that made no such claims. Products making multiple claims also grew twice as fast as those that are marketed with only a single claim.
The experts didn’t verify the claims, which ranged from ‘vegan’ and ‘carbon zero’ to ‘sustainable packaging’ and ‘eco-friendly’. Nusa Urbancic, Campaigns Director at the Changing Markets Foundation, suspects the impact on actual purchasing decisions “would be even bigger in the UK market [because] UK consumers are generally more sensitive to environmental and social issues” than those in the US.
The Changing Markets Foundation recently looked at claims being made by large food brands and assessed them against the Green Claims Code. It found 54 cases of greenwashing, which was particularly “rampant” in the meat and dairy categories. Greenwashing provides a “veneer of sustainability for an industry that is responsible for a third of global methane emissions and is the main driver of deforestation”, Urbancic explains.
A YouGov poll commissioned by the Changing Markets Foundation showed that 31% of UK consumers and 19% of German consumers are more likely to buy meat and dairy labelled ‘low methane’, while 22% claim that they are willing to pay ‘slightly more’ or ‘much more’ for it. Such claims have started to appear on products and in adverts, but they need to be substantiated, the foundation said, or risk lulling consumers into a false sense of morality.
Carbon neutral claims are also popping up on cheese and eggs. Such claims rely on offsetting, a contentious concept that is increasingly synonymous with greenwashing. The European Commission wants companies to show explicitly the offsets involved in achieving carbon neutrality. The proposal is part of the EU Green Claims Directive. Published in March, the directive offers “common criteria against greenwashing and misleading environmental claims”, giving consumers “more clarity [and] stronger reassurance that when something is sold as green, it actually is green”. Those businesses making genuine claims will also benefit, the Commission claimed, with member states applying penalties that are “effective, proportionate and dissuasive”.
New EU Directive
Lawyers have been unpicking the 80 pages of the draft directive, which covers how claims and labels “will have to be third-party verified and certified”. Dominic Watkins, partner and Global Lead (consumer sector) at law firm DWF, says marketing teams are going to have to work much more closely with those in quality, R&D and governance to ensure claims are robust and properly substantiated. Is there a risk that, faced with additional due diligence costs and the threat of fines from regulators, some companies may well decide to keep quiet? “I think the key is how [any green activity] is described and clearly it should not be exaggerated but at present it feels like the regulatory dial is swinging so far the other way so that people are as likely to be greenhushing as greenwashing,” says Watkins.
Ioannis Ioannou, Associate Professor at London Business School, suggests that we have to be careful not to conflate greenwashing – that is, companies misleading or cheating their way on sustainability – with genuine attempts at sustainability that simply fail.
Research by consultancy South Pole showed that one in four large companies with science-based netzero targets will not be publicising them; so-called greenhushing is on the rise, it seems. Ioannis Ioannou, Associate Professor at London Business School, suggests that we have to be careful not to conflate greenwashing – that is, companies misleading or cheating their way on sustainability – with genuine attempts at sustainability that simply fail. “Hushing right now is an even riskier strategy than opening up,” he says. “I do think that progressively we’re going into a world in which it’s acceptable to try and fail, as long as you’re honest about it.”
There is certainly huge pressure from all stakeholders on food companies to be greener. Brands therefore need to do their homework, says Professor Chris Elliott from Queen’s University Belfast, and be aware of the dangers of making unsubstantiated claims. “Saying ‘sorry but it’s complicated and we did the best we could’ is just about acceptable at the moment but will become less so going forward.”
In Sweden, dairy company Arla has already been banned from using the claim ‘net-zero climate footprint’ when marketing some of its products. The country’s consumer watchdog said the impression is that “the product does not give rise to any climate footprint at all”. Arla told food industry website Just Food that it didn’t intend to mislead anyone, adding: “At the same time, the ruling confirms that sustainability is a complicated topic to communicate on and that clearer guidelines are needed.”
This is the ambition of the Green Claims Directive. “What we need now is much more active enforcement and hefty penalties on companies that continue to greenwash,” says Urbancic. As with all directives, the green claims rules will need to be incorporated into each EU member state’s law, so there will be 27 variants and some might adopt higher standards. Some guardrails and standardised approaches will certainly help companies wanting to make genuine green claims, and the food industry is actually “really good with claims”, explains LRQA’s Carey Coffin. ‘Low fat’, ‘low calorie’, ‘natural’ – the sector has “dealt with claims for years” which are based on “good regulation”, she says.
“You set those parameters around those key factors that underpin the claims, you make that information available to the consumer, and that information is based on scientific evidence.” For this reason, she sees the Green Claims Directive “as a real positive because it’s starting to try to put some of that agreed standardisation around the definition, the types of things that are allowed, and actually what scientific evidence is needed to actually substantiate a claim”. Whether this stops the greenwashing gravy train in its tracks remains to be seen.