Sustainability communication and greenwashing

The topic of sustainability made its way into every company in 2024. While many companies are still in the beginnings of their journey, others have had well-resourced sustainability departments for years. Some sustainability managers focus primarily on meeting legal requirements and investor expectations. Others, on the other hand, invest in sustainable practices to secure their supply chains or implement effective communication strategies to gain a competitive advantage through their measures.

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“Do good and talk about it.” We believe that this saying remains relevant. The climate crisis and loss of biodiversity must be at the centre of our attention to effectively combat these issues. The private sector plays a crucial role in this effort. Annual climate financing must increase sevenfold to achieve the internationally agreed climate goals by 2030. By that year, at least $4.3 trillion will be needed annually. In 2020, only about $665 billion was available, of which around 20% was provided by companies. An effective reduction of climate-related business risks is only possible through increased private sector investments in climate protection. Positive examples from companies that invest in climate protection spread hope and can motivate other companies to act more sustainably. Even if companies implement sustainability measures primarily for marketing reasons, this can help raise consumer awareness of environmental issues and promote social discussions about sustainability.

However, there is a downside to the coin, which brings us to the dangers of greenwashing. The RESET sustainability platform defines greenwashing as campaigns and PR initiatives “that give individual products, entire companies or political strategies a 'green' light, giving the impression that the players are acting in a particularly environmentally friendly, ethically correct and fair way.” However, the appearance of the green-washed products or services does not reflect ecological facts. The term was first mentioned in the media in the 1980s, in connection with a large-scale marketing campaign by the oil company Chevron, which focused on idyllic pictures of nature and was intended to 'greenwash' the dangerous practices that harmed both people and the environment.

Greenwashing campaigns can lead to confusion among consumers who strive for sustainable consumption. In the long term, this leads to a breach of trust and undermines the work of companies that actually want to make a positive contribution to the environment and society. Transparency and a verification of sustainability promises are therefore necessary to make real progress.

Avoiding greenwashing: The 7 Sins

We would like to expand on the adage mentioned above. The following applies to sustainability and marketing teams: Do good things and talk about them, but also continuously question yourself. Nobody demands absolute perfection right from the start, but an open exchange with the target group is highly appreciated and strengthens relationships. As a consumer, there are a few things you can pay attention to to identify products that only seem to be sustainable. In a study carried out by TerraChoice in 2007, the 7 Sins of Greenwashing identified which are still relevant today. For you as a company, they serve as a guide, which you should avoid in your communication:

• The Sin of No Proof describes claims that are neither verifiable nor certified by independent third parties. Even after research, no further evidence can be found, which makes these statements lack credibility.‍
• The Sin of Vagueness concerns unclear, undefined or very broad statements. The ecological aspect should always be clearly specified. Examples include statements such as “All Natural.” Of course sounds good, but it isn't necessarily. Some substances found in nature are toxic, such as mercury or uranium. Terms such as “green” or “environmentally friendly” are also meaningless without further specification.
• The Sin of Irrelevance is committed when unimportant or unhelpful information and claims are used. Examples include statements on product characteristics that are already required by law. Such irrelevant information is misleading and aimed at deceiving consumers.
• Die Sin of Worshiping False Labels refers to products or services that, through words or images, give the impression that they are being reviewed by third parties when this is not the case; in other words: they are using counterfeit labels.
• The Sin of Fibbing is true when entire statements are false. This sin has a deep impact on consumer rights, because false statements are actually being made. One example would be to claim that a product consists of 100% recycled plastic, but in fact only 30%.
• The Sin of the Hidden Trade-Off describes the practice of highlighting a product as green based on a single attribute. One example of this is the emphasis on the recycled content of a material while downplaying less sustainable properties. While such statements are not fundamentally wrong, they can still be misleading as they only shed light on one aspect. Be sure to evaluate the product in its entirety.
• The Sin of Lesser of Two Evils refers to situations where environmental labels such as “organic” or “green” are affixed to products in categories where the entire product category has questionable environmental value. These claims can mislead consumers.

The EU issues guidelines against greenwashing

In addition to companies, politicians are also required to combat greenwashing through a clear legal framework. The EU has recognised this. The EU Green Claims Directive aims to combat greenwashing and increase transparency in sustainability communication. It is a challenge for consumers to make informed, sustainable buying decisions, as a vast array of sustainability labels and misleading claims have inundated advertising in recent years. The status quo of sustainability claims is appalling when we look at these figures:

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In January 2024 The European Parliament gave the green light to a law that is intended to improve sustainability labels and prohibit the use of misleading environmental statements. In the future, as a company, you must scientifically substantiate your environmental claims and provide detailed, verifiable data. Terms such as “environmentally friendly,” “biodegradable” and “climate-neutral” may no longer be used in advertising or on packaging without specific proof. In addition, the Directive prohibits the claim that a product is “climate-neutral,” “CO₂-reduced,” or “climate-positive” due to CO₂ compensation. Companies must clearly state how and where the CO₂ reductions or removals are achieved and ensure that these projects provide additional benefits that go beyond existing measures.

Once the new rules have been introduced in the Member States, the EU should only allow sustainability labels that have been tested by official certification systems or defined by public authorities. It is not yet fully clarified exactly how the verification of information will work in Germany from 2026. We will monitor the Green Claims Directive developments and continue to follow the exact wording of the laws to keep ourselves up to date.

How you can successfully communicate sustainability projects

Criticism of the lack of transparency in many sustainability statements is justified. But how can you as a company credibly communicate your commitment?

In communicating our projects, we focus on the valuable work of farmers implementing regenerative measures. We promote climate-smart farmers who manage our soils sustainably. Soil is not only irreplaceable for our food supply; its importance goes much further. Perhaps it is surprising to some that soils store more carbon than all the forests in the world combined. Soil is also crucial for protecting and promoting biodiversity.

At Klim, we want to tell authentic and moving stories about one of the world's most important resources in order to inspire others to also work to protect soils, and thus biodiversity, food security and climate. Thanks to our digital platform, we know exactly what is happening on farms, what services farmers provide for our ecosystems and how much CO₂ is reduced and saved. We encourage our partners to communicate the facts about emissions reductions and contributions to climate protection projects beyond the supply chain transparently and clearly.

From greenwashing to greenhushing

Greenhushing describes the deliberate withholding of information about environmentally friendly practices and sustainability initiatives by companies. Instead of actively communicating sustainability initiatives, some companies choose to hide this information out of fear of criticism, legal consequences, or mistrust. But is that the right strategy?

Transparency in your sustainability initiatives is crucial for gaining and maintaining the trust of your stakeholders. Greenhushing could significantly undermine this trust. A lack of information is often seen as a sign of a lack of concrete measures. In addition, the legal requirements for transparent reporting in the EU are becoming increasingly stringent as a result of the CSRD. In the future, you will not be able to avoid reporting comprehensively about your sustainability initiatives!

How do companies implement this? Our partner BABOR BEAUTY GROUP has made reducing emissions a central aspect of its sustainability strategy and has already achieved a reduction of 47%. They communicate this in a completely transparent way. At the same time, they make it clear that it is not possible to completely avoid emissions under current technological conditions. That is why they have decided to invest money in climate protection projects outside their own supply chain — and to support Klim farmers in their regenerative transformation. With Babor's support, farmers on an area the size of 5,000 football pitches are implementing regenerative measures that build up humus and store carbon. The holistic benefits of Regenerative Agriculture have convinced Babor of Klim's value, and they are actively using them in their communication, such as in this announcement post:

BABOR BEAUTY GROUP on LinkedIn

Would you like to know more about Klims projects in regenerative agriculture? Feel free to ask for more information from our team!

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