Whether you are a first-time reporter or have been producing a sustainability report for years, regulations are changing the way companies need to think about and communicate sustainability.

With the enforcement of new greenwashing policies, guidelines and laws (in both the UK and the EU), companies need to find their sweet spot in their sustainability reporting and communications that shares a compelling message to their stakeholders and avoids greenwashing. Otherwise, they might fall victim to legal or financial penalties, which bring huge reputational risks to the table.

Over the past two years alone, we can look at the likes of Lufthansa, Unilever, HSBC and Oatly to learn what not to do. In these cases, large, consumer-facing brands have made unsubstantiated and ambiguous environmental claims that have breached codes and led to repercussions such as banned adverts, advice notes and enforcement notices that warn against similar claims in the future.

And this trend of regulatory action shows no sign of slowing down. UK regulators have stated plans to zero in on greenwashing in sectors including fashion, fast-moving consumer goods and travel. The EU is also looking to take widespread action by introducing new legislation to regulate environmental claims. In particular, the proposed Green Claims Directive would impose new substantiation, communication and verification requirements, as well as introducing additional monitoring and enforcement mechanisms.

So how can you avoid it?

To avoid running foul of regulations, companies must ensure that their green claims are aligned with ASA and CMA guidance. The foundation of compliance with this guidance is transparency. This means ensuring that sustainability communications are all grounded in fact, do not mislead or overstate, and are evidenced and backed up with authentic and accurate information – for example owning up when brands get things wrong, sharing course correction or remediation processes, or openly celebrating progress over perfection from the get-go.

How Luminous cuts out greenwashing

From the beginning to the end, our Sustainability & Impact reporting process helps to prevent greenwashing in the following ways that tie transparency to the heart of client communications:

• Interrogating client aims and ambitions at the initial meeting stage.
• Encouraging clients to back up their claims with proof points – for example providing more context, demonstrating real examples of activities and using roadmaps to show their progress in achieving targets and commitments.
• Supporting alignment to GRI’s reporting principles: accuracy, balance and clarity.
• Conducting greenwashing spot-checks before final content reviews.
• Reviewing page design and imagery for misleading messages and meaning.

Whether you are a first-time reporter or have been producing a sustainability report for years, these regulations are shaping the way companies need to think about and report on sustainability.

If you want to ensure that you’re preventing greenwashing in your sustainability communications, please feel free in get in touch with sarah.roper@luminous.co.uk