Compliance Copilot Newsletter #3: The Real Cost of Greenwashing – New Data

?? Recent green (claims) news

• 27 June: India's Ministry of Environment has proposed a Green Credit Program that allows individuals, organisations, and industries to earn and trade credits for engaging in environmentally friendly activities.
• ???The why:?After the greenwashing observed in Verra's rainforest offsets program, this proposal could set a better example of how to effectively implement green credit programs.
• 16 July: The launch of EL GREEN MALL, the first pan-European marketplace for truly sustainable shopping, marks a significant milestone in promoting eco-friendly consumer choices across Europe.
• ???The why:?This development represents a groundbreaking initiative in the European market, providing consumers with a dedicated platform to make truly sustainable shopping choices.
• 17 July: The European Commission has presented the Global Gateway investment agenda for Latin America and the Caribbean
• ???The why:?This agenda paves the way for increased economic cooperation and the development of sustainable investment opportunities between Europe and the regions of Latin America and the Caribbean.
• 17 July: Lidl in Deutschland has announced a significant change to its beef mince packaging by replacing black plastic trays with a clear version, aiming to improve recyclability and reduce environmental impact.
• ???The numbers: 63% plastic reduction, 250 tonnes of plastic a year saved, and up to 350 fewer delivery trucks being on the road per year
• 17 July: Australia has released regulations to combat greenwashing by companies, aiming to establish rules for sustainability claims and ensure transparency and accuracy in environmental marketing.
• ???The why:?These regulations on sustainability claims align with the emerging and ever-growing global trend of combating greenwashing.

?? Deep dive

Green or gone: 72% shun companies with dubious sustainability claims, reveals NIM study

The gist: Consumers are quick to punish companies suspected of greenwashing, as shown by a study conducted by the Nuremberg Institute for Market Decisions (NIM). 1) A majority of respondents avoid companies accused of false climate promises, and 2) sustainability claims supported by specific evidence (such as published calculations and external certifications) are deemed more credible.

The specifics:

• NIM | Nürnberg Institut für Marktentscheidungen e.V. surveyed 8000 consumers in eight countries and 800 decision-makers from companies. 72 percent of consumers avoid companies accused of false statements on climate protection.
• From our research (an April 2023 representative study with 1,000 participants & powered by www.appinio.com), 90 percent of consumers who care about sustainability would avoid all products from a brand accused of greenwashing.
• However, 48 percent of consumers for whom sustainability is not important would also avoid all products from a brand accused of greenwashing.
• Sustainability promises gain credibility when companies publish supporting calculations (effective for 76 percent of respondents) and obtain external certifications (effective for 71 percent).
• Advertising sustainability leveraging celebrities does not significantly enhance the credibility of promises (only 23 percent find it more trustworthy).

The why: Considering the potential introduction of financial penalties for companies making false green claims, these survey results represent an additional consequence of suspected greenwashing, revealing how consumers actively avoid companies with false promises.

The soundbite:

"Every accusation has an effect... Consumers often do not check later whether accusations are accurate in detail. This would make every sustainability statement an incalculable risk for companies." - Andreas Neus , Managing Director of NIM

Food for thought:

• Considering that a quarter of companies are already opting for silence regarding their climate goals fearing financial consequences, will a new fear of greenwashing stop more companies from sharing their sustainability efforts?

?? Regulation explained

Revision of the Packaging and Packaging Waste Directive (PPWD)

16 March: The EU's Packaging and Packaging Waste Directive aims to reduce packaging waste and promote a circular economy by implementing measures for recycling and reuse. As part of the European Green Deal, a proposed revision seeks to ensure all packaging is economically feasible for recycling or reusability by 2030, while tackling over-packaging and waste reduction.

To illustrate this further, imagine you are a producer engaged in manufacturing, distributing, or recycling packaging for the EU market. Let's explore how the essential aspects of the directive would be relevant to your operations:

1. Sustainability requirements: Harmful substances in your packaging will be limited and all packaging should be designed with recycling in mind, collected separately, and sorted for high-quality recycled materials by January 2035.
2. Recycling targets and minimum content: You will have to meet the ambitious targets for packaging which aim for full recyclability by January 2030. If your packaging falls under performance grade E, it will no longer be recyclable from that date. Plastic packaging will be subject to increasing minimum recycled content targets, with some exemptions for specific types.
3. Packaging minimisation: Your packaging must be designed with minimised weight and volume. Superfluous packaging and space occupied by materials (e.g., paper cuttings, bubble wraps) would be considered empty space, with few exceptions.
4. Labelling and information requirements: Ensure your packaging labels include material composition information. Within four years, you will have to add labels for packaging reusability and digital data carriers (e.g., QR codes) to facilitate tracking.

The proposed directive offers a holistic approach to sustainable packaging and waste management, encouraging businesses to adopt eco-friendly practices and work towards a greener future within the EU market.

That is all we have for now. Thank you for reading????Share this issue with others and subscribe for more insights about product compliance and sustainability.

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