Regulators are on the lookout for evidence of greenwashing from food companies. Anne Marie Taylor from law firm DWF explains how businesses can stay on the right side of the law.
Footprint: Why have regulators suddenly become interested in greenwashing again?
Anne Marie Taylor (AMT): As consumer demand for sustainable products increases, businesses have recognised the power of green claims and the value of improving their environmental credentials. In response to this, regulator scrutiny of green claims has also increased. The Competition and Markets Authority (CMA) have made it very clear that they are actively policing their Green Claims Code. They have targeted the fashion retail sector first, with other sectors, such as the food industry, to follow. They aren’t the only ones looking at this, either. The Advertising Standards Authority (ASA) is also undertaking a project on climate change and the environment; it is currently investigating a number of fast fashion retailers too. It has been looking at consumer understanding of green claims and has been looking specifically at waste claims (like recyclable and biodegradable) as well as meat and dairy and plant-based substitute claims. The findings are expected soon.
Footprint: Does this mean making green claims is riskier than ever?
AMT: Yes! There are very few agreed definitions and safe ways in which claims can be made. There is often confusion and a lack of certainty. Take the argument against plastics: it is very easy to point to plastics as being ‘bad’, but even for some single-use plastics, a lifecycle assessment (LCA) would point to a much more nuanced picture.
Footprint: Are there any ‘safe’ spaces in terms of making such claims?
The only completely ‘safe’ space is to make no green claims at all. Unfortunately, the CMA’s code can be difficult for businesses to navigate. In parts it is too general to offer clear, practical guidance and in parts it seems almost impossible to comply with. For example, on the one hand the code says: “Be sure claims are truthful and accurate.” But on the other it also says: “Claims can also be misleading if what they say is factually correct or true” and “even with any necessary qualifications or caveats, a claim can still be problematic”.
Footprint: That seems confusing. But isn’t that where supporting evidence for claims comes in?
AMT: The code tells businesses they should “always consider the effect of the total life cycle of a product or service” while also advising that when making broad claims they “should consider whether they have clear evidence that their products, services, processes, brands and activities have a positive environmental impact (or no negative one)”. The burden of proving no negative environmental impact during the total life cycle of a product seems practically impossible, let alone showing a positive one. So while “truthful and accurate” seems a simple concept, the reality is much more nuanced and can be incredibly difficult to evidence, particularly for smaller businesses.
Footprint: What should businesses do, then?
AMT: To stay on the right side of the regulators, businesses should avoid making unqualified general or absolute claims which may give the impression that the product is ‘green’ in its entirety, such as ‘sustainable’ or ‘environmentally friendly’. Instead, they should focus on making specific claims about their most significant environmental benefits and/or parts of a product’s life cycle with the most significant environmental impact. They must also be able to robustly evidence any claims made, which is where LCAs come into play.
Footprint: What are the benefits of LCAs in backing up claims?
AMT: With increased scrutiny from regulators (and the court of public opinion alike), it’s vital that businesses can evidence their environmental performance when making environmental claims. It is one of the six principles of the CMA’s code – that “claims must consider the full life cycle of a product or service” and it is this principle that has elevated the importance of LCAs. If done well, an LCA can help a business to defend regulatory challenges, although the court of public opinion can be more difficult to persuade. We also expect this to be central in upcoming EU measures.
Footprint: How do companies ensure their LCAs are robust?
AMT: The key challenges when it comes to LCAs are complexity and lack of harmonisation. There is a proliferation of certifiers (some more reliable than others), with more than 200 environmental labels in the EU, and more than 450 worldwide, but little consensus or coordination of approach. This is incredibly confusing for businesses – and incredibly frustrating if they have, in good faith, relied on certification which is then still challenged by the regulators.
Footprint: Are you referring to the issues with the Higg Index used by fashion brands?
AMT: Yes. The index is a set of five tools launched by the Sustainable Apparel Coalition (SAC) in 2011 that was designed to measure and compare the environmental impact of different materials’ LCA data. Basically, it allows brands to better understand their impacts and where to focus their actions. But then the information began being used on consumer facing labels and the Norwegian Consumer Protection Authority stepped in to say shoppers were being misled. The use of average figures in the LCA and failure to consider the full impacts of a garment were among the criticisms. The data was meant for businesses to benchmark the average environmental impact of different textiles, assessed and quantified from the manufacturing or growing of raw materials up to when the material is ready for use in the final consumer goods; not to make consumer facing claims about specific finished garments.
Footprint: What can food companies learn from the case?
AMT: That extreme care must even be taken when relying on data from a leading industry alliance. Businesses must ensure that any LCA they rely on is specific to their product and reflects the entire life cycle, from raw material to disposal, as far as practicable. Wherever possible, a reputable LCA expert should be used to add credibility to the methodology. However, there is currently little formal regulatory guidance for LCA practitioners to follow.
Footprint: doesn’t the Green Claims Code help?
AMT: It provides a steer on the broad expectations of the regulator (the CMA), but it doesn’t provide practical guidance on what ‘good’ looks like or the technical methodology that should be employed to satisfy their requirements. In the absence of specific guidance or regulation, LCA practitioners would do well to look to the proposed EU approach, which is based upon international standards (such as ISO 14040 series and the European ILCD guidelines). This would at least give them a credible and internationally recognised basis for their analysis. We expect more from the EU shortly, but until then even well-intentioned and the most socially responsible of businesses are open to challenge.
Anne Marie Taylor is director (global regulatory, compliance and investigations) at law firm DWF.