With the ESG regulatory landscape in constant flux, transparent disclosure is more important than ever. Although new greenwashing rules signal positive change for corporations, they can also make navigating ESG communication a challenge. At Flag, we prioritise clear, honest and credible messaging with verifiable data to meet regulatory demands and to garner trust.

What is greenwashing?

Greenwashing claims are misleading communication of a brand’s sustainability efforts – intentional or otherwise – that have the potential to impact consumers’ decisions. They include:

• vague terms
• selective goals
• unspecified timelines
• unsupported environmental claims.

‘Green’ claims don’t have to be explicit; implied sustainability credentials can be just as misleading. For example, having a picture of a tree beside unrelated text could give the impression that a company is eco-friendly without this being the case.

With consumers looking for sustainable products, employees seeking value-based companies and investors prioritising responsible business, greenwashing has risen exponentially.

Staying ahead: Adapting to evolving greenwashing regulations

Getting caught out for misleading sustainability statements can lead to substantial financial, legal and reputational consequences for a business. As policies becoming increasingly strict, across the US, UK and EU, companies must stay abreast of changes to ensure their communications align with all relevant greenwashing policies.

From new guidelines requiring clear evidence-based messages in the UK to the need for quantifiable ‘net zero’ and ‘carbon neutral’ claims in the US, companies must consult with their legal teams and stay up to date.

How to avoid greenwashing

At its most fundamental, the key to avoiding greenwashing is to be clear and honest about your company’s sustainability efforts, adopting a ‘progress over perfection’ approach. In addition to specific local regulations, companies should always:

• be clear and honest about their efforts
• support any claims with data – ideally third-party verified
• avoid vague terms and green buzzwords
• make sure sustainability features are not exaggerated
• steer clear of any claims that can’t be supported
• avoid making comparisons unless conditions are identical.

In addition to overstating environmental actions, there are many other types of ‘washing’ companies should be aware of when reporting on their sustainability efforts – from exaggerating their commitment to social issues to emphasising a meaningful purpose without supporting action.

How to do damage control

However careful you are, mistakes can and do happen, with some of the world’s biggest companies being called out for greenwashing in the past. If you do find yourself in that situation, there are ways to manage company reputation, including:

• making a public apology
• taking immediate, corrective action
• communicating plans for improvement and progress
• being transparent and authentic when communicating shortcomings.

Learn more about greenwashing

To further understand greenwashing – its significance, implications and the safeguarding measures best suited for your company – explore our comprehensive guide. Gain knowledge about how to adhere to evolving global regulations and master the do’s and don’ts of effective ESG communications.

We know navigating ESG communications can be complex. Let Flag’s dedicated team of ESG specialists, designers, copywriters and account managers be your partner on this journey. Get in touch today if you need support: info@flag.co.uk