How to avoid the greenwashing trap in the drive towards distinction

As the competition to become distinctive and tap into consumer concerns about the planet increases, Kurt Stuhllemmer, Partner at Hall & Partners, looks at how brands can stand out in their drive towards sustainability, without breaking new consumer protection laws and falling foul of the greenwashing trap.

Why it matters?

Innocent Drinks will not be the last brand to receive an Advertising Standards Authority (ASA) ad ban earlier this year for falsely taking credit for being green. The Competition and Markets Authority (CMA) has begun to reinforce new legislation aimed at protecting consumers since the beginning of 2022 by cracking down on brands that make misleading claims about their environmental and sustainable credentials.

Brands come under the spotlight

The problem of greenwashing can arise when brands like Innocent try to align themselves with values that misrepresent or overplay their core business in some way. A communication campaign in response to an industry issue that lacks authenticity and consistent messaging over time could easily face accusations of greenwashing.

At times, it might seem “you’re damned if you do, and damned if you don’t” when it comes to communicating your brand’s sustainability credentials. Brands like M&S that have for years found innovative ways to reduce their carbon footprint can find themselves facing unexpected accusations of greenwashing, having suddenly decided to share their good work.

Innocent’s ad implied that its purchase would have a positive impact on the planet when the extraction and processing of raw materials to create its bottles in fact has a negative effect.

Even with its aspirations to reduce its environmental impact and recycle three quarters of its plastic bottles by 2023, the ASA said its ad was misleading. Innocent is not alone. Earlier this year, Oatly, famous for its off-beat, unconventional campaigns, solid brand strategy and founded upon clear values that claim to put the planet before profit, also got it wrong. Like Innocent, Oatly’s ban on its high-profile marketing campaign was upheld by the ASA as green claims were found to be misleading.

Whether brands found to be greenwashing will be hung out to dry remains to be seen, but what is clear is that many could face legal action if their creative communication campaigns are considered to be false, exaggerated or misleading.

A shift in consumer values

Our consumer research tells us that there are huge expectations on brands to become more responsible and responsive. Brands need to take a stand on the important issues impacting the world today, which is exactly what Innocent was trying to do. It’s not just the industry watchdogs, consumers will not tolerate actions by businesses that are perceived to be jumping on the greenwashing bandwagon.

Brands are now expected to be sustainable in some form or other, or at least making genuine efforts to be so. To describe yourself as a sustainable brand is no longer a mark of distinction, it’s viewed as a given and consumers demand it.

For example, our Value Shift report reveals that 75% of younger consumers (18–34-year-olds) think businesses should take greater responsibility and do more to create a better and fairer world for everyone, while over half of all consumers (57%) believe brands need to do more to positively impact society. Ranked as the number one value for all generations (69%), protecting the environment and working together towards a more sustainable future was the top priority.

The bigger picture

The challenge facing brands today is how to effectively communicate their green credentials in a way that is perceived by consumers to be genuine and authentic. Sustainability plays an important part of this but it’s not a shortcut to becoming purposeful. The difficulty is that the term sustainability can often mean different things to different people. It’s a complicated and far-reaching concept for brands to align themselves with, and one that most people tend to associate with environmental issues.

We often measure business sustainability in terms of carbon footprint, against UN ESG targets and generally how to reduce harmful practices that impact our planet. These are essential metrics, but do they help to create a truly distinctive brand?

To be truly distinct, brands need to pair sustainability credentials alongside their ability to be useful, responsible and responsive. In the last two years, brands that have demonstrated their usefulness during the coronavirus pandemic by helping to look after people, employees and the planet have performed well in both financial and brand loyalty terms, while others have been less successful.

As consumers place greater emphasis on values such as social equality, authentic activism, diversity and inclusivity, a more comprehensive method to measure brands is required, one that measures across multiple dimensions, including, but not exclusively, their environmental impact.

Sustainability is of course important, but we need to look at the bigger picture; one that shows how brands are becoming increasingly aware of their wider environment while meeting consumer needs. We need brands to become more conscious.

Conscious brands

Brand perception is key to understanding what matters most to consumers, and so brands will choose to focus on areas such as climate action or defining a clearer sense of purpose, while others lead on diversity and inclusion. Identifying those brands that are leading the way forward, and setting an example for others, requires a new benchmark which can be shaped by consumer research and customer insights.

With this information, businesses can build effective brand strategies and communication campaigns that have been thoroughly tested to ensure they deliver the right message, to the right people, at the right time. It allows brands to work out their distinctive product or service offering in a way that is perceived by consumers to be authentic, rather than exaggerated or misleading.

Such research should be carried out through a multi-dimensional conscious lens that doesn’t rely on singular measures, such as sustainability goals, but instead encompasses a more far-reaching view of how brands need to operate in the modern world – both on a personal and planetary level.

A new index for measuring conscious brands

Hall & Partners, with Wolff Olins, examined more than 200 of some of the world’s leading brands. Ranked by over 9,000 consumers in the UK, US and China against six key dimensions that define a conscious brand – habitual, empathy, reform, multisensory, collectivism and morality – it reveals some interesting results.

Microsoft and Headspace might not necessarily be brands that immediately spring to mind when we think of a ‘conscious brand’, but when measured against these new dimensions, these were brands that were perceived as being responsible for looking after people’s needs during a difficult time for all. They stood out as being distinctive.

Microsoft Teams enabled workers to continue their role safely. During the pandemic, Microsoft leveraged technology to help those on the front lines of research into COVID-19 and, in 2020 alone, donated $1.9 billion to non-profits, nearly $4 billion to diverse-owned businesses and reduced its supplier carbon footprint by 21 million metric tons of CO₂e.

Headspace was rated highly for its focus on improving health and happiness through meditation and mindfulness. Other notable brands such as YouTube were included for using storytelling and video to educate people on sustainability, Pfizer for its pioneering Covid vaccine, Google for using technology to help people do more for the planet, and Netflix for its stories and contribution to culture and diversity.

These top performing global brands demonstrate how the pandemic has changed consumer values as we prioritise mental health, communication, convenience, human connections and entertainment.

Conscious brands now need to think and act more carefully than ever to accommodate these shifting values, and do so with honesty and integrity if they are to become distinctive.

To help build a clearer picture of these changing attitudes, our latest consumer research conducted exclusively for WARC this month revealed that 77% of UK consumers simply don’t understand what brands mean when they talk about sustainability. Furthermore, when asked about how genuine they thought brands were, 81% said they didn’t trust them when talking about sustainability and environmental goals, while only 4% said they ‘completely trusted them’.

Finally, our research revealed that brands risked losing almost half (48%) of their customers if their products or services weren’t perceived as being sustainable.

Brands can rapidly build global fame and relevance if they do it in the right way, but as Innocent discovered this week, it’s easy to step off the path. Equipped with reliable consumer research and insights, brands can connect to their role and demonstrate how they are meeting consumers’ needs, addressing employee welfare and making a more positive contribution towards society.

Building a clear and distinctive conscious brand identity should not be seen as a nice-to-have or token initiative. Rather, it needs to be a fundamental component of any growth strategy. As part of any growth plan, a clear brand strategy combining specific sustainability goals with insights obtained from wider research that addresses people’s needs, moods and culture, will help deliver an effective communications campaign. These campaigns must be measurable, consistent and align with your brand values to ensure they are perceived as being authentic. This will help create the distinctiveness every brand is searching for.