Brand Restart 2023: Graeme Murray - Greenwashing - too good to be true?

1. Graeme Murray, the little red sofa Greenwashing: too good to be true

2. Greenwashing: sustainability and marketing © the little red sofa. 2023

3. © the little red sofa. 2023 CULTURAL TRUTH The evolving relationship between marketing and sustainability 1970’s The ‘ecological marketing’ era 1980s The ‘environmental marketing’ age Today The ‘sustainability marketing’ age Focused on environmental problems such as air pollution, pesticide use and depleting oil reserves. Focused on developing products with superior socio-environmental performance to market them to the ‘green consumer’ in search of competitive advantage. Currently seeks to integrate the ecological and ethical concerns of the green marketing era to create a form of marketing that develops long-term, sustainability-oriented value relationships with customers. (source: Belz and Peattie, 2012)

4. © the little red sofa. 2023 SUSTAINABILITY What words or associations come to mind?

5. SUSTAINABILIT Y Energy Global warming Ecological Future Emissions Resources Renewable Carbon-neutral Consumption Urban planning Green World Crisis Eco-friendly Economy Transport Planet Production Manufacturing Law Recycling Inequality Resources Design Buildings Architecture Health Environmentalism Conscious Alternative Materials Innovation Cost Waste Behaviour Rethink Reuse Reduce Responsibility Creativity Earth Problem-solving Education Ethical Environmental Economy Society © the little red sofa. 2023 ONE OF THE BIGGEST PROBLEMS WE HAVE IS THAT THERE ARE SO MANY SUBJECTIVE INTERPRETATIONS OF WHAT CONSTITUTES SUSTAINABILITY

6. © the little red sofa. 2023 “The property of being environmentally sustainable; the degree to which a process or enterprise is able to be maintained or continued while avoiding the long-term depletion of natural resources.” Sustainability: a definition

7. © the little red sofa. 2022 “We believe brands have a responsibility to be both a force for good and a force for growth.” Marc Pritchard, Chief Brand Officer, P&G

8. © the little red sofa. 2022 “Sustainable enough is not good enough.” Greta Thunberg, Environmental Activist

9. © the little red sofa. 2023 Greta is not alone of screened company websites contained claims that were either exaggerated, false or deceptive according to a European Commission report from 2021 and could potentially qualify as unfair commercial practices under EU rules.

10. © the little red sofa. 2023 Greta is not alone The Institute for Strategic Dialogue recently analyzed new trends in climate mis- and disinformation and found that: • recognition of the climate crisis and the need for net zero transitions is steadily increasing among the general public and lawmakers alike. • this has spurred a similar surge in the multi-billion-dollar economy of corporate greenwashing. • this rise in greenwashing reflects a broader shift from climate denial to subtler forms of ‘delayism’ and ‘inactivism’. • there is a need to apply pressure on ad tech providers, advertising standards agencies, financial regulators and other essential entities to play their role in tackling disinformation and greenwashing at the systemic level. (source: ‘Deny, Deceive, Delay (Vol 2)’, The Institute for Strategic Dialogue, 2023)

11. Ogilvy Consulting How brands choose to be a force for good is entirely up to them

12. © the little red sofa. 2023 They often started with CSR Corporate Social Responsibility CS R Profi t Society Environment CSR is commonly defined as a business model in which companies integrate social and environmental concerns in their business operations and interactions with their stakeholders instead of only considering economic profits.

13. © the little red sofa. 2023 And there are now 2 additional acronyms brands increasingly need to think about CSR SDGs ESG

14. © the little red sofa. 2023 SDG or Sustainable Development Goals SDGs are part of the 2030 Agenda for Sustainable Development, adopted by all United Nations Member States in 2015. According to the UN, "at its heart are the 17 Sustainable Development Goals (SDGs) designed to end poverty, fight inequality and stop climate change."

15. © the little red sofa. 2023 ESG or Environmental Social Governance Environmental • Climate change • Energy efficiency • Water scarcity • Pollution & waste Social • Gender & Diversity • Human rights • Labor standards Governance • Bribery & corruption • Political contributions • Executive compensation ES G ESG is a rating system companies use to measure their environmental, social and governance credentials. ESG aims to encourage businesses to improve their ESG credentials to attract investment from shareholders, employees, customers, suppliers and the communities in which they operate.

16. © the little red sofa. 2023 What’s the difference between SDGs and ESG? ESG and SDGs work together to determine how a company can achieve sustainable development and provide a roadmap for a sustainable future. ESG measures environmental, social and governance practices within an organization. By incorporating these sustainable development practices into daily business operations and products and services, organizations can achieve success using ESG factors which will eventually integrate with SDGs.

17. © the little red sofa. 2023 The 5 stages of corporate sustainability Random donations to philanthropic events Reflect personal interests of leaders versus the ethos of the brand Not connected to the core of the business (source: ‘Embrace the journey – the 5 stages of corporate sustainability’, Otto Scharmer, MIT Lecturer, September 2018) Driven by a CSR or sustainability department Limited exposure to influence other business departments Limited presence, not central to the brand’s core Brands may align one of their product lines to an SDG Still an abundance of opportunity across the entire portfolio to make systematic change Built end-to-end cultures of sustainability Outwardly make their commitment through ESG certifications May feel tension between profit and sustainability efforts Adopt a circular approach to their operations Become a purpose-driven ecosystem Brands operating here are trailblazing the future for brands to come #1 One-oﬀ projects #2 Sustainability as part of a brand’s initiatives #3 Sustainability drives business innovation #4 Sustainability emerges in culture #5 Sustainable ecosystem

18. Greenwashing: sustainability in action © the little red sofa. 2023

19. © the little red sofa. 2023 “Many businesses talk soothingly about corporate social responsibility, impact and social purpose, but very few put these at the core of their operations.” Mariana Mazzucato, Economist

20. © the little red sofa. 2023 Patagonia – the grand-daddy of sustainability A crusader for environmental protection since its origins. Supporter of grassroots activists for 40 years. In December 2018, they changed their mission – Patagonia is in business to save our home planet. They’ve acted on this mission day-to-day in innumerable ways: (a) repair programs that enable customers to maintain their Patagonia products for a longer life; (b) suing President Donald Trump over protection of public land; (c) donating tax cut money to grassroots environmental organizations; (d) constantly seeking more earth-friendly materials to put into their products, etc.

21. Greenwashing: the rise of purpose marketing © the little red sofa. 2023

22. © the little red sofa. 2023 Brands are jumping on to the cultural bandwagon #blacklivesmatter movement Environmental & green issues #metoo movement They have profits to protect but see there is money to be made in being socially responsible. Brands are increasingly asking themselves: how can we be meaningful, effective and impact change?

23. © the little red sofa. 2023 Alex Weller, Marketing Director, Patagonia

24. Greenwashing: the rise of greenwashing © the little red sofa. 2023

25. © the little red sofa. 2023 Take a look at this product packaging How do you feel about this product? What things might attract you or put you off buying this? Would you ever buy this product?

26. © the little red sofa. 2023 Note heavy use of ‘eco’ green colour Use of leaf visual in the letter ‘o’ evolve = better, improved, enhanced How can they credibly claim this? Made to make you feel less guilty but dubious claim Actual product hard to spot It’s clearly trying to be green New and more expensive than the standard product

27. © the little red sofa. 2023 But it’s really greenwashing in action Ziploc is using the ‘lesser of two evils’ trick to make the brand look greener than it is. It focuses on one point of the product to make it look eco-friendly within its category and distract consumers from the overall damage that this particular product can cause. The product is still harmful to the environment, just not as harmful as it used to be.

28. © the little red sofa. 2023 "Disinformation disseminated by an organization, etc., so as to present an environmentally responsible public image; a public image of environmental responsibility promulgated by or for an organization, etc., but perceived as being unfounded or intentionally misleading." Greenwashing: a definition

29. © the little red sofa. 2023 The 7 deadly sins of greenwashing #1 No proof #2 Irrelevant claims #3 Fibbing #4 False labels #5 Vagueness #6 Lesser of two evils #7 Hidden trade-offs Not having accessible evidence of their environmental impact Using labels that are ambiguous and poorly defined Marketing facts that aren’t true Using labels that are insignificant to whether it is eco-friendly Comparing products to be greener when they are all non eco-friendly Advertising only a small set of attributes and not the whole picture Creating fake certification labels or endorsements from a third-party

30. Greenwashing: in action in B2C marketing © the little red sofa. 2023

31. The greenwashing hall of shame Herbal Essences bio:renew – super vague and lacks any real definition Organix shampoos – only 1 of 18 ingredients is actually certified organic Tide Purclean – full of distracting graphics, fancy words and unsubstantiated claims Whilst a baby may welcome the use of organic cotton, the problem of nappies and landfill still persists It might be made with a Stevia sugar blend but it’s still a Coke VW bragging about its green-ness rather than being more environmentally-friendly

32. The greenwashing hall of shame Green is good, despite being plastic for one-off usage? Is it true? Turns out it’s all made up Fiji Water – sources its water from Fijian springs, while 12% of Fijians don’t have access to running water McDonald’s painting itself green – using biofuels but it is still a business based on disposable packaging H&M – In 2021 a whopping 96% of their claims did not hold up (source: the Changing Markets Foundation) Shell asked the public what are the best ways to reduce emissions – despite being responsible for 1-2% of global CO2 emissions

33. Greenwashing: in action in B2B marketing © the little red sofa. 2023

34. © the little red sofa. 2023 Greenwashing or not – you decide Pictures morph with green trees Big bold claim (unsubstantiated) Subtle use of green Sweco is Europe’s leading architecture and engineering consultancy company

35. © the little red sofa. 2023 Greenwashing or not – you decide Suggestive green imagery: trees, plants and grass Vague langauge Bold proclamations (no proof)

36. © the little red sofa. 2023 Greenwashing or not – you decide How is this related to sustainability? How is 10% comparable with other years? Just because you’ve done training doesn’t mean you’ll act ethically

39. © the little red sofa. 2023 On society Consumers won’t trust greenwashing claims in the future Regulators will be forced to impose new laws and restrictions Progress towards real sustainability will be impaired The disastrous impact of greenwashing On businesses Green business is booming and is profitable Greenwashing is the tempting ‘fix’ to a favourable public image and higher profit margins Greenwashing is unethical deception – using it to solicit trust and make more money is condemnable and deplorable Greenwashing brands can face legal actions, lose trust, loss of sales, and reputational damage On the environment Many consumers are unwillingly buying products that are polluting Think pollution, destruction of ecosystems, waste, hazardous chemicals, greenhouse gas emissions, factory worker deaths, loss of rainforests and animal habitats. Big fossil fuel companies aren't the only culprits – greenwashing brands can be found in nearly all categories

40. © the little red sofa. 2023 The rise of greenwashing has also led to the rise of ‘greenhushing’. Greenwashing silences those businesses that are actively making positive change and implementing sustainable practices - resulting in less education and awareness being spread on the positive impacts these companies may be making.

43. © the little red sofa. 2023 Best advice: DON’T GREENWASH AT ALL Don’t lie Be transparent and specific Skip vague buzzwords and fluff Avoid irrelevant claims Don’t use suggestive imagery or colours Get real endorsements Make your marketing proportional to the effort you are making

44. © the little red sofa. 2023 5 tips to get sustainable messaging right #1 Be authentic #2 Understand your audience #3 Be constructive #4 Get emotion right #5 Be relatable Be true to your brand and where it stands on sustainability It is essential to understand people’s attitudes to tackle the barriers to sustainable behaviour Show how the brand can help people make a difference Leave people feeling hopeful and confident, and empower them to change Make serious messaging accessible and relatable with the right tone (source: Kantar)

45. © the little red sofa. 2023 People increasingly see large companies as having a responsibility to the planet and society. Sustainability isn’t a trend companies can simply side-step or ignore. Sooner or later, whether through government regulation or public outcry, companies will need to respond. A shift is happening

46. © the little red sofa. 2023 A shift in business mindset must follow too ”There is one and only social purpose of business - to use its resources and engage in activities designed to increase its profits.” Alan Friedman, economist, 1970 “The purpose of business is to produce profitable solutions for the problems of people and planet, not profiting from producing problems for either.” Professor Colin Mayer together with the British Academy Future of the Corporation progamme, 2020 This long remained mantra for doing business has remained unchallenged only until recently

47. © the little red sofa. 2023 Adopting a sustainability mindset: • Being responsible for everything you do • Understanding the causes and consequences of your actions (short and long-term) • Active participation in promoting sustainable development • Collaboration and building partnerships • Sense of respect and responsibility for life and diversity Companies must embed sustainability into everything they do

49. © the little red sofa. 2023 Companies that proactively take on sustainability challenges, and win, will wield more political and cultural influence than ever. Consumers will reward those brands that practise honest sustainability and keep them, their families and the world safe. If that happens, then one day there might not even be a need for greenwashing. Tackle the problem today, get rewarded tomorrow

50. Graeme Murray, the little red sofa graeme@thelittleredsofa.com 16th February 2023 Greenwashing: too good to be true

Brand Restart 2023: Graeme Murray - Greenwashing - too good to be true?

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