News article: How the advertising industry can stand up to greenwashing now

How the advertising industry can stand up to greenwashing now

It's time for adland to take responsibility, Alchemy One's strategy director Nicola Watkins, on three common themes to the solutions needed in the industry.

Article author: How the advertising industry can stand up to greenwashing now

Written by
Nicole Watkins

With 80% of Australians concerned about climate change, are companies really walking the walk on sustainability? The rise of greenwashing and the increasing scrutiny of advertising bodies suggest otherwise. Despite the recent reports from the United Nations’ Intergovernmental Panel on Climate Change, many brands continue to engage in greenwashing, misleading consumers and hindering progress towards a sustainable future.  

The ACCC’s findings and crack-down on greenwashing has been spurred on by an internet sweep of 247 businesses, where 57% of brands were identified as having made “concerning claims” about their environmental credentials. This unveiled eight key concerns including:  

  1. Vague and unqualified claims 
  2. A lack of substantiating information 
  3. Use of absolute claims 
  4. Use of comparisons 
  5. Exaggerating benefits or omitting relevant information 
  6. The use of aspirational claims, with little information on how these goals will be achieved  
  7. Use of third-party certifications  
  8. Use of images which appear to be trustmarks. 
57% of brands identified as having made “concerning claims” about their environmental credentials.

Anyone not taking this seriously should – with fines of up to $1 million for companies wielded by the ACCC. In fact, Toyota may be fined up to $50 million after it was referred to the ACCC for alleged misleading claims regarding the environmental performance of its vehicles and its net zero ambitions. In addition, the Australian Securities and Investments Commission (ASIC) issued its first-ever greenwashing fine last year to a publicly listed energy company for misleading statements about green credentials. ASIC also has a number of active investigations examining potential misleading or deceptive conduct with green claims. 

As an industry, we need to ensure the brands we represent are prepared to be held accountable for the claims they make. According to the Climate Compass 2022 report, 58% of Australians have rising concern for climate change, with Aussies willing to spend more to buy environmentally-friendly versions of products and changing to ‘greener’ energy providers. There are upwards of seven million Australians with intentions who are yet to act and need protection from inauthentic claims. Adding to this urgency are the findings in a new report from Nielsen IQ, with 30% of Australians acknowledging they are finding it more difficult to shop for grocery products in a sustainable way.  

In the same Nielsen IQ report, foresight leader, Regan Leggett, made a telling comment for companies, adding: “To meet targets that become increasingly stringent over the next 10 years, we anticipate a great deal of scrambling from companies that now realise it’s crunch time. They will look for easy wins in the short-term, but the game changer is the requirement to report and validate their footprint and gain visibility of emissions and resource use across their whole value chain.” 

To address the pressing issue of greenwashing, agencies have a responsibility to ensure their clients’ claims are backed by solid evidence and transparent plans, as noted above. By doing so, we can help prevent misleading and deceptive advertising practices that regress progress and deteriorate trust in brands that are doing good. We also need to educate our clients on the risks of greenwashing and the ACCC and ASIC’s crackdown on such practices. But it’s not enough to stop there. To propel our industry forward we must integrate these concerns into agency models through compliance, operations, and policies to have real impact.

There isn’t a one-size-fits-all solution to this question dependent on agency discipline, though there are three common themes to the solutions needed: EducateSubstantiate and Integrate

Meaningful progress in addressing the ACCC’s and ASIC’s concerns starts with education.

Giving our clients and brands the best opportunity to proactively reduce greenwashing claims starts with education from the inside out. Leveraging sustainability consultants as impartial third parties to collectively upskill clients and agencies alike on the do’s and don’ts will have an everlasting impact on the industry as individuals progress through careers and brands grow.  

Meanwhile, ensuring a pillar of this education includes shedding light on the adequate industry category bodies and best-in-class certification trademarks will help to ensure credibility among consumers. Simultaneously, education surrounding these trademarks and which elements of brand supply chains are accredited will also ensure these are leveraged correctly.  

Transposing these learnings to a consumer-friendly version of comms is also pivotal, as this reduces the room left for misinterpretation and purchasing decisions can be made on authentic and informed facts.

As agencies, we have a vested interest in substantiating the messages we create and amplify.

Leveraging the collective education of clients and agencies should encourage us all to think critically of the messages we push to consumers and create an open dialogue towards progress. Data, definitions, and sustainability action plans should be proactively (and enthusiastically) provided to all parties involved in bringing campaigns to life.  

Encompassing this to include both the client’s and industry data will help to reframe comparative messaging against industry benchmarks, propelling brands to be more competitive in a meaningful manner. While seemingly overkill at first, being on the front foot with such transparency can help with collective efforts of accountability and avoiding the logistical as well as financial nightmare of withdrawing campaigns due to ACCC complaints or fines. As Leggett said in the previously mentioned report, we are at a tipping point where companies who are proactive and genuine about climate action will be at a “massive advantage”. 

Integrating education and substantiation in campaign ecosystems is essential for the consumer.

Ensuring that consumer-friendly versions of terminology definitions, sustainable goal plans, relevant data, supply chains and intelligence are proven in various touchpoints is pivotal – not only to reduce the risk of greenwashing accusations but to ensure the positive impact from the brand’s sustainable efforts and industry benchmarks help to build consumer trust. With 74% of consumers looking to businesses and corporations to lead the charge on climate change, taking these steps will help live up to their expectations and enable collective accountability for progressive direction.

Agencies should push to ensure that this information is readily available as part of the campaign experience via the right landing pages at the right touch points. Considering the role of owned assets in providing information and education to substantiate claims to consumers will also help with continuity. Alleviating the notion that sustainability is treated as a ‘campaign’ but is instead an ‘always-on’ layer, will become part of the health of any brand architecture. The cadence of creative updates as part of ongoing sustainability campaigns is also essential to ensure that progress towards goals or claims is continuously communicated.  

We’re all more than cognisant that, at the end of the day, we’re spending our client’s money. This does not negate our responsibility to provide a thorough service (which now includes being mindful of ACCC legislation), nor the consideration we must extend to consumers on the receiving end of the messages we amplify. Working these suggestions into Service Level Agreements, Policies, and Operations will help ensure that client and agency partners have genuine intent and drive meaningful actions. Above competitive advantages and commercial outcomes, collective and collaborative efforts must be prioritised to ensure our industry positively contributes to the progress initiated by the ACCC. 

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