Sharing Date25 Nov, 2024
Marketing and advertising are one of the most powerful tools for organizations to communicate effectively with their target audiences. Used in various forms by all players, from large corporations to small businesses, these methods serve to promote products and services by increasing brand awareness. The main objective of these activities is to engage stakeholders and increase customer loyalty. The marketing and advertising sector, which is influenced by the expectations and demands of the addressed audience, has started to consider sustainability as a focus area today with the increase in the masses demanding a cleaner and more sensitive planet/country/social environment.
Exaggeration in marketing and advertising is often used to create a stronger impact on the target audience. Trying to make the features of products and services more attractive and innovative helps brands stand out in the competitive environment. However, when the boundaries of this strategy are not drawn correctly, misleading statements can emerge, which can confuse or deceive the customer. The protection of customer rights has become increasingly important in recent years, and the issue is not only limited to the exposure of defective products or poor services, but also promises that mislead the customer are under scrutiny. Various strategies that create this misleading effect cause organizations to face “greenwashing” lawsuits.
Greenwashing is defined as distracting attention with intensive data sharing, using statements that assign more value to sustainable activities than their actual impact, and even hiding information about non-green activities. “Exaggerated claims” are one of the main issues covered under greenwashing. Examples of this type of greenwashing use unproven or exaggerated statements about environmental impacts, which means that a brand emphasizes features that do not reflect reality in an effort to greenwash its products. In another type of “misleading labeling”, the environmental impacts of a product or service are overstated or incomplete information is provided. For example, a package may be labeled as “natural” or “environmentally friendly” when in fact the product’s ingredients or production process may harm the environment. Finally, another method of greenwashing, known as “hiding information”, is to ignore negative environmental impacts and emphasize only the positive aspects. For example, a brand may state that it has improved energy efficiency in its production process, while ignoring other environmentally damaging steps such as waste management or raw material sourcing. Such tactics hinder the consumer’s right to make an informed choice and make it difficult to build a realistic awareness of the environment.
Recent greenwash lawsuits demonstrate the importance of transparency and verification in companies’ sustainability claims. For example, a lawsuit against a company in the automotive sector was initiated on the grounds that the company’s carbon impact was understated, and as a result, the company was removed from sustainability indices, resulting in a loss of prestige for the company and damaging investor confidence. In a case involving recyclability claims against a food company, the company had to pay a financial penalty after the claims could not be substantiated and the brand’s environmentally friendly image was severely damaged. A bank was found to have financed projects with high carbon emissions despite its emphasis on environmental sensitivity, resulting in legal sanctions against the bank and increased social reactions. In another case, a retail brand’s claim that the materials used in its clothing were environmentally friendly was questioned and a lawsuit was filed against the brand for misleading advertising.[1]
Greenwash scandals have attracted the attention of the media and the public in recent years, also due to the distrust it creates among consumers. Exaggerations and disinformation have been found in the statements of giant brands, including some famous and globally operating companies, which can be considered within the scope of greenwashing. The cases of greenwashing, which have caused a great uproar and controversy in public opinion, have led to the formation of civil organizations to follow up on the issue, especially in Europe, but not only in Europe but also in other parts of the world. Voluntary organizations have emerged to monitor and analyze companies and their public statements, advertisements and announcements, and to publicize their results.
This mobilization in civil society and sensitization to protect consumer rights, as well as concerns about the diversion of sustainability efforts from their main course, has led public authorities to take action. Various countries and political associations have introduced legal regulations and studies to prevent greenwashing practices. For example, according to studies by the European Commission, 53% of green claims are based on unclear, misleading or inaccurate information. It has been reported that half of the green labels received incomplete or no verification, and 40% of the claims lacked supporting evidence. Although there are 230 sustainability labels and 100 green energy labels in the European Union, the transparency of these labels varies widely.[2]
The European Commission’s Draft Green Declarations Directive[3] requires companies to present their environmental claims in a verifiable and demonstrable manner. It also encourages sustainable consumption by preventing misrepresentations about the durability and repairability of products. Failure to verify sustainability and environmental claims can have a damaging effect on public trust. The Directive provides a framework for the verification and auditing of companies’ declarations and aims to prevent the use of misleading green labels.[4]
The Competition and Markets Authority (CMA) in the UK has introduced the Green Claims Code to combat greenwashing. The Authority emphasizes that sustainability claims should not be misleading and that companies should present their environmental claims in a demonstrable way. In this context, companies making claims such as “carbon neutral”, “sustainable” or “eco-friendly” must provide concrete evidence to support these statements. The fact that companies do not make claims based solely on their carbon offset programs can lead to the concealment of real environmental impacts. The CMA therefore expects companies to take concrete steps to reduce environmental impacts and has introduced criminal sanctions and stricter controls to prevent such misleading green labels. In this respect, the Competition and Markets Authority plays an important supervisory role in combating greenwashing claims. [5] Today, transparent and accurate information in marketing and advertising activities has become a critical requirement to ensure consumer confidence.
Greenwashing practices not only damage corporate reputation, but also devalue the concept of sustainability in the eyes of society and overshadow all efforts in the sector. In this context, legal regulations introduced to ensure that consumers are not misled and that sustainability claims are verifiable are an important step towards establishing a reliable ground in the sector. In line with these regulations, which have a direct impact on Turkey as well, companies should base their sustainability strategies on evidence and ensure accuracy and openness in their marketing processes, which will support brand credibility in the long run. Preventing misleading statements will contribute significantly to building a healthier future in terms of sustainability. Companies that support their sustainability commitments with concrete steps have the potential to protect both consumer trust and brand reputation in the long run.
References:
1) Greenwash.(t.y.). Wash by Brand. Available at: https://greenwash.com/wash-by-brand/. Last accessed: October 2024.
2) European Commission. (t.y.). Green Claims. Available at: https://environment.ec.europa.eu/topics/circular-economy/green-claims_en. Last accessed: October 2024.
3) The Draft Directive was proposed by the European Commission on March 22, 2023, first considered by the European Parliament on March 12, 2024 and approved by the European Council on June 17, 2024. The Draft, on which tripartite negotiations are ongoing, is expected to be enacted in 2025. See European Parliament (2024). Green Claims Directive. Available at: https://www.europarl.europa.eu/RegData/etudes/BRIE/2023/753958/EPRS_BRI(2023)753958_EN.pdf . Last accessed: November 2024.
4) European Parliament. (2024). Stopping Greenwashing: How the EU Regulates Green Claims. Available at: https://www.europarl.europa.eu/topics/en/article/20240111STO16722/stopping-greenwashing-how-the-eu-regulates-green-claims. Last accessed: October 2024.
5) GOV.UK. (t.y.). Green Claims Code. Available at: https://greenclaims.campaign.gov.uk/ Last accessed: October 2024.
