Green Claims Code checklist: are you guilty of greenwashing?

Posted on: 29 April, 2024

The Green Claims Code has been developed to help businesses communicate their sustainable practices clearly to customers. Here’s how it works.

You may have noticed a shift in the tone of advertisements in recent years. Instead of focusing on the products or services of the businesses themselves, many of today’s organisations focus on sustainability and their impact on the environment in their messaging and branding.

This shift has been prompted by a number of factors. For starters, being sustainable is important for business. Government legislation and Environmental, Social and Governance (ESG) reporting requirements make actively engaging in sustainability a non-negotiable for organisations of all sizes. What’s more, incoming generations are demanding it – Generation Z are firmly committed to sustainability, with almost three-quarters (72%) changing their behaviour to reduce their impact on the environment. Put simply, sustainability has become an essential component of commercial strategy.

Learn more: Making a business case for sustainability: why now is the time to act

All of this has increased pressure on companies to publicise the environmental benefits of their operations and given rise to greenwashing – the act of providing misleading or factually incorrect information to promote or even camouflage the true nature of their impact on the environment.

Greenwashing is rife – well over half (62%) of the British public ‘find it difficult’ to understand which brands are actually sustainable. This is no surprise when, according to research from the UK’s Competition & Markets Authority (CMA), 40% of claims about sustainability could be misleading customers. However, in 2023, new regulations have been brought in by the UK and the EU to combat the increasing number of businesses adopting this practice.

Learn more: What is greenwashing (and how can you spot it)?

What is the Green Claims Code?

The Green Claims Code is a 6-point checklist brought into the UK by the CMA. The aim of the code is to help brands ensure their claims about sustainability are genuine, increase the focus on activities that are positive for the environment, and make sure they don’t manipulate greater desire for sustainable practices for commercial gain. The EU has proposed their own equivalent regulation – the Green Claims Directive.

What happens if you break the Green Claims Code?

Companies that are found to have broken the Green Claims Code can now face civil penalties of up to 10% of their global turnover, which for large firms can amount to millions of pounds. Fines for individuals that fall foul of the code in the UK could be as much as £300,000. In the EU, companies face penalties of up to 4% of annual revenue.

What does the Green Claims Code mean for the built environment?

The built environment is no stranger to greenwashing, with this practice having very real ramifications for industries like construction, real estate and surveying. As a sector with a major part to play in helping the UK achieve net zero by 2050, greenwashing risks undoing our hard work, jeopardising our reputation and exasperating the impact of climate change. Alongside ESG regulations, the Green Claims Code can keep businesses in the sector accountable, whilst also helping to champion those working hard to address our sector’s relationship with the natural environment.

The Green Claims Code: a 6-point checklist

Here are the six main points businesses need to review in the green claims code, with real-world examples of brands that were found guilty:

1. Are your claims accurate and truthful?

At the centre of the controversy surrounding greenwashing is the question of accuracy – are the claims you’re making genuine? Do they represent your operations fairly, or are you in danger of misleading your customers?

Coffee company Keurig branded their plastic capsules as recyclable in Canada – a message that garnered attention when it’s widely known that coffee capsules are very difficult to recycle. However, they neglected to mention the fact that their capsules aren’t accepted for recycling in the majority of Canadian provinces.

2. Can your claims be corroborated by evidence?

The safest way to back up the legitimacy of your sustainability claims is to utilise data. However, while some organisations have been found guilty of fabricating evidence to support their sustainability claims, your data doesn’t have to be fake for you to fall foul of this key point.

Review your evidence. Are the sources you’ve used up-to-date and credible? And can your claims actually be backed up at all? Perhaps the most infamous example of greenwashing in recent years is the 2015 Volkswagen emissions scandal, where their cars were fitted with software to alter performance during emissions tests. In truth, the engines were actually emitting up to 40 times the limit of nitrogen oxide pollutants.

The built environment has an intrinsic relationship with ESG legislation. With so much pressure on businesses in the sector to adopt more sustainable practices, it’s never been more important to make sure your claims can be corroborated by accurate, reliable data.

3. Are your claims clear?

Does your claim cover all the environmental factors of your product or service, or relate to one aspect of it without misleading people on its other components? For instance, while you may brand your construction processes as sustainable, do you actually make use of sustainable construction materials?

H&M were found guilty of making misleading claims in 2021 by the Changing Markets Foundation. 96% of their sustainability claims were found to be misleading, far exceeding the already high benchmark of 60% across the other high-street fashion brands that were investigated.

Learn more: 5 ways the built environment can avoid greenwashing

4. Are you omitting any important facts or information?

In the Green Claims Code, the CMA states that any claims shouldn’t ‘contain partially correct or incorrect aspects or conditions that apply’. As such, your claims should be entirely correct and reliable and, if there are caveats, they should be set out clearly.

In 2021, South Korean motor company Hyundai claimed their hydrogen-powered Nexo model would leave no pollution – a claim which was swiftly ruled out by the ASA. While hydrogen engines do indeed filter and ‘purify’ incoming air as they claimed, road tyres and brakes are a major source of toxic particle pollution.

5. Have you considered the full life cycle of your product/service?

When creating sustainable messaging around your product or service, ensure you’re considering its entire lifespan. What happens in the early stages? Is there any activity in this process that’s detrimental to the environment? And, once it’s time for it to be replaced, how can it be disposed of/reused sustainably?

In 2020, providing plastic straws was banned in the UK, along with cotton buds and drink stirrers. McDonald’s had already moved to reduce the number of these single-use plastic in its stores by adopting paper straws. This was a success, until it was discovered that the paper straws aren’t recyclable, raising new questions about sustainability.

In the built environment, green building certifications like BREEAM have come under fire for being misleading in how much of the building lifecycle. Many of these standards only look at embodied carbon, rather than the operational carbon that comes from a building’s usage, meaning many buildings and organisations can proclaim to be sustainable – even when these standards don’t reflect a significant portion of the building’s long-term environmental impact.

Learn more: It’s not easy, being green – are green building certifications just greenwash?

6. Are you making fair comparisons?

Making product or service comparisons with competitors is already rife with challenges and regulations. In the case of sustainability, where companies are competing for new generations of customers that often place more emphasis on a company’s ethical practices than costs, competition is fierce. With this in mind, avoid making comparisons if you haven’t got solid data or evidence to back it up.

In 2020, airline Ryanair failed to back up claims that they were Europe’s ‘lowest emission airline’ with any data or present any comparison with other airlines. They were promptly ordered by the Advertising Standards Authority (ASA) to remove advertisements with this slogan.

Final thoughts

The Green Claims Code will go a long way to keeping organisations accountable and encouraging genuine climate action, particularly in the built environment. While the fines and penalties can be significant, the solution to avoiding these is simple – take meaningful, responsible and measurable steps to decarbonise your operations and improve your sustainability efforts. That way, you won’t have to worry about the integrity of your claims. You’ll also reap the well-known benefits sustainability offers for business and, more importantly, avoid the risks neglecting it can have on your reputation and longevity.

Sustainability isn’t a passing trend – it’s here to stay and is constantly evolving. If you want to inspire and action change in your career, UCEM’s MSc Innovation in Sustainable Built Environments will give you the skills you need, both now and in the future.

Find out more: MSc Innovation in Sustainable Built Environments – University College of Estate Management