In the UK the Competitions and Markets Authority (CMA) and Advertising Standards Agency (ASA) regulate green claims that companies make in their marketing, advertising and external communications.
Fines for breaching The Green Claims Code can be up to 10% of global turnover, and potential director disqualification. Accusations of greenwashing can also damage your brand reputation, supply chain relationships and have a lasting impact on stakeholder trust.
Even businesses with a sustainability focus need to understand the Green Claims Code – you may already have the data to make you compliant, but the Code covers how you present it and talk about your credentials in your marketing and advertising.
With the regulators recently releasing stricter guidance on green claims – particularly around whole business context, future net zero targets and end of life processes, and regulations moving to be more sector specific, compliance is becoming increasingly challenging for marketing and sustainability teams alike.
In January 2023, the CMA announced it would be expanding its scrutiny of misleading green claims to the Fast Moving Consumer Goods (FMCG) sector, making green claims compliance a priority for FMCG brands.
Although The Green Claims Code has been designed to make existing trading standards legislation easier to understand and implement with a sustainability lens, the guidance is substantial, and companies need to have robust compliance processes in place for the green claims they make regularly, and any new claims they introduce.
A multi-million pound turnover, market leading FMCG brand approached us to support with their green claim compliance.
They had recently closed a significant investment round to fund expansion into Europe, and while they already had a full lifecycle analysis in place and third-party verified Climate labelling for their products (making them the most sustainable product in their category), they understood that green claims compliance is as much about how you present your evidence as it is about what evidence you hold.
They wanted to make sure that all their marketing and communications were compliant with UK regulations, and that they were well prepared for incoming EU regulations as they expand, so they commissioned a Green Claims Audit.
The scope of their audit included all green claims being made on their website, blog, packaging and latest impact report, which had not yet been published.
Our team of analysts read through all the content on these channels to create a list of all the green claims currently being made.
In total, they identified over 370 green claims, although a significant proportion of these were variants of the same claim that would require a different evidentiary basis due to slight differentials in current wording or presentation – so we were able to standardise their green claims and achieve a level of efficiency that would support their comms team moving forward.
Once all the claims have been identified, we align each claim to the relevant clauses in the regulatory frameworks (in this case, the CMA guidance on environmental claims on goods and services, and the ASA’s latest CAP guidance on ‘The environment: misleading claims and social responsibility in advertising’ for both broadcast and non-broadcast), which gives a quick and clear overview of what compliance looks like.
Our analysts then grade the risk level of each claim.
We have developed a bespoke ranking system for this that takes into account the nature of the claim and scope of evidence required, how significant the claim is within the whole business context and full product lifestyle, and other factors (including presentation) specified by the regulators. This then gives a risk rating based on the Government’s Defence Intelligence Probability Yardstick.
Risk ranking helps give the audit process and our clients a viable and sensible way of seeing where their compliance gaps are and prioritising the gathering and presentation of evidence.
From there, our senior Green Claims compliance experts go into the audit and add notes to each claim about what will be required to make it compliant – both from a data and evidentiary perspective, and a presentation/design perspective.
Our analysts then pull together a list of all the evidence required, and work with our clients to audit their existing data and map this to their claims.
At this stage, we can see what claims are already compliant, what claims require a different presentation of data to be compliant, and where any gaps are.
If required, our sustainability, circularity and impact strategists (who have previously been senior staff at brands like B&Q, Ben & Jerry’s and eBay) can step in to help develop new practices in business operations and supply chains to make the business more sustainable and provide more evidence for their claims – although for this particular client that was not required, as their practices were already robust.
In this case, the client opted to make the changes to their green claims in-house, so the audit was presented to the comms team responsible for design, copy and website upkeep. They went away to produce an evidence page based on our recommendations, and make the necessary changes across copy and design.
We then repeated the audit process to review the evidence and presentation, ensuring that all green claims are now compliant and rated low on our risk register.
The client told us that the audit process was clear, easy to follow and saved a significant amount of time, whilst also supporting their in-house comms teams to manage green claims compliance going forward.
At 181st Street, we specialise in Green Claims compliance for FMCG brands. Find out more about how we can help with your Green Claims Code compliance journey. If you would like to arrange a green claims audit, training or compliance support, book a free consultation call.