Greenwashing: how to avoid misleading your customers

There is already a Dutch law in force to prevent misleading sales practices: the Unfair Trading Practices Act (Woh). The law forbids sellers to make promises that are untrue or to leave out information. The new European directive adds rules about sustainability claims to the Woh. 

This is greenwashing

Are you claiming your products are made from sustainable materials while neglecting to mention that the manufacturing process used is harmful to the environment? Then, you are guilty of greenwashing: omitting information, making misleading promises, exaggerating, or lying about your green processes and procedures.

Risk of greenwashing

Companies will use terms such as ‘carbon-neutral’, ‘environmentally friendly’, or ‘circular’ without being able to prove that this really is the case. This is, in fact, prohibited by law. Engaging in greenwashing can have unpleasant consequences for your business. It can cause you to have a negative reputation among (potential) clients. And you can be fined for it. This can amount to up to €900,000 per offence, or part of your turnover.

Accidental greenwashing

Pretending to be ‘greener’ than you really are can be a marketing trick. But greenwashing is not always deliberate. For example, if a paper manufacturer puts "100% recycled content" on a box containing white paper, that is greenwashing. Why? It is not clear whether the statement applies to the box or the paper.

How to avoid greenwashing

The Dutch Authority for Consumers & Markets (ACM) conducts research into greenwashing. They warn companies that spread misleading information about the sustainability of their products and can impose fines on these companies. With this approach, ACM protects companies that honour their commitments from competitors that make idle promises.

If you sell products you claim to be ‘green’ or ‘sustainable’, you must follow the rules of thumb set by ACM (in Dutch), as outlined below:

1. Make correct and clear sustainability claims

Pay attention to the following:

• Make sure image and text match well and together tell the same message.
• Is only one of your services or products sustainable? Then you may not say that your entire company is sustainable. For instance, an energy supplier may not call itself a 'clean' supplier if, in addition to green energy, it mainly supplies gas.
• Explain in understandable language what is sustainable about your product or service.
• Be as precise as possible and use examples. Say, for example, "In the production of our jeans, we use 37% less water due to a new production process." This is more precise than simply saying, "These jeans are sustainable."
• Having green plans is not the same as doing green. A sustainability claim should only be about something you are already doing, not something you still want to achieve.
• You should not communicate something that is required by law as a sustainability benefit. For example, if you use less water because the law requires it, you may not present that as a sustainable achievement.

2. Back up your promises of sustainability with facts that are and remain correct

Make sure you can prove that your promise of sustainability is true. Also explain how you will continue to deliver on this promise, now and in the future. Suppose you have a courier company and you promise to drive greener than your biggest competitor. If you use a survey from 5 years ago, your promise may not be true today. So, check your products and production process regularly. Renew or improve your sustainability promises if necessary.

3. Comparisons with other products or businesses must be honest

“This pair of jeans is 50% more sustainable than brand X jeans.” You are allowed to make comparisons when promoting your products, but your claims must be accurate. You must specify what you are comparing your product or business with. There should be no confusion for your customers. Compare only the same type of products and use the same way to calculate percentages, for example. Also make sure the comparison is about the feature that makes your product sustainable.

You will also create confusion by leaving out information. Example: ACM noticed a milk carton containing the claim “30% lower carbon emissions.” It will not be clear to consumers what the comparison relates to and what ‘less’ refers to. An investigation conducted by ACM revealed that this referred to 30% lower carbon emissions in manufacturing milk cartons compared to the old packaging.

4. Be precise about your sustainability plans and make them measurable

Are you going to become (more) sustainable in the future, but want to let your customers know now? That is allowed. Just make sure you make it clear that these are plans you are going to fulfil soon. Tell honestly what effect your company currently has on people, animals, or the environment and how you want to keep improving it, and make that measurable. For example, do not say: we will ensure a green world within 5 years, but say: we will reduce CO2 emissions by 80 per cent within 5 years. Are your plans ready? Make sure your customers can easily find them, for instance on your website.

5. Make sure logos and quality marks are helpful to customers, rather than confusing

You are only permitted to use symbols, quality marks, and logos if their publisher has given you official permission to do so. Make sure the quality mark aligns as much as possible with the claims you make about your product, service, or business. If you, as a business owner, want to show your customers that you are working on reducing your carbon emissions, you can choose, for example, the Gold Standard quality mark. Is your business working with organic food? Then the EKO quality mark (in Dutch) may be right for your business. This quality mark shows you only use fair, organice products.