Sustainability matters to consumers, including affluent ones. 

Millennial and Gen Z shoppers demand sustainable practices and UBS investment bank found that this group was responsible for 85% of luxury sales growth in 2018. Brands want to shout about how green they are but, making misleading environmental claims – greenwashing – whether in conventional advertising and marketing copy, annual reports or even presentations to third parties, can harm a business’s reputation, costing it customers and investors. While the advertising standards agency (ASA) banning your ad may not be a big issue, the Competition and Markets Authority (CMA) is set to get the power to fine companies up to 10% of global turnover if they breach the green claims code. 

Here are some tips for getting your messaging right and mitigating the risks.

1. Be honest
You can't make a general claim – for example, zero emissions – that relates only to a part of your product or its life cycle, or make a claim that omits relevant information. Don't imply that your product has changed to be better for the environment if it wasn't bad to start with, or highlight the absence of an environmentally damaging ingredient that isn’t usually found in that product.

2. Be transparent
Where possible, look at the full life cycle of your product. The circular economy is a great opportunity for luxury brands to build loyalty and lighten their environmental impact. If you do make claims in relation to specific parts of your product, be really clear that that's what you're doing. Give consumers access to more detail on a website using a QR code or an asterisk.

3. Think about what you’re claiming…
Sustainability matters to luxury shoppers. Two thirds of affluent or high net worth respondents to Altiant’s global luxury and asset management (GLAM) monitor published in July 2023 said that it is very or somewhat important to them for brands to commit to policies that promote environmental protection, social responsibility and ethical behaviour. You want to shout about your credentials but make sure that you say what you really mean and it hasn’t got lost in translation.

4. …and make sure you can substantiate it
You need to hold the data to substantiate your claims. If it’s from a supplier, have that data and interrogate it. Make sure that data is up to date and substantiates the claim that you are making. 

5. Be specific
Talk specifically about what your company is doing to achieve your sustainability goals. If you're going to use comparative words like kinder, better, cleaner, or greener, you need to be very clear what your product is kinder, better, cleaner, or greener than. 

6. Avoid buzzwords
Avoid terms like green, eco-friendly and sustainable unless it’s really clear how you're using them. The ASA’s latest update to their guidance says that carbon neutral isn’t acceptable, as people don't understand it. Don't use green imagery on its own – it could be misleading. 

7. Don’t make any assumptions
You can't suggest that your claim is universally accepted unless it is. You need to substantiate that it is the case for your product.

8. Consider net impact on the environment
If you have a product or a service which is better for the environment, shout about it but make it clear what the overall impact of your business is. Say where people can go to find out more about what you're doing and how you’re trying to improve.

How to mitigate risk

• Get the topic on your board’s agenda – Your board needs to be aware of the risks: banned ads, fines, damage to your reputation, consumer and class action, NGO activism, even claims of breaches of directors’ duties and climate change litigation. 
• Agree on your business approach to risk – Every company is different – decide how much risk you are willing to take. 
• Train your marketing team – Educate your marketing team in what claims your company is comfortable using. At Freeths, we're happy to train marketing teams or review content.
• Put a process in place so that high risk claims make their way to legal – Set out the claims that you're comfortable making and the data you've got to substantiate them; the claims you're not comfortable making; and the claims that you need more data for. Make sure that this last type of claim is funnelled through to legal. 
• Address any ASA complaints head on – If you or a supplier get a complaint, tackle it straightaway. Getting advice from the start increases your chances of avoiding a negative decision or securing a confidential decision rather than a public one. Make sure that everyone in the supply chain knows to flag issues early.

With three quarters of respondents to the GLAM monitor saying they are willing to pay more for sustainable luxury products, getting this right matters. For support telling your sustainability story, contact Iona on 0345 030 5781 or at [email protected].

Iona Silverman is a partner in Freeths London IP & Media with experience in advertising and marketing law. She regularly drafts complex agreements relating to branding, marketing and development of technology. Iona also advises on working with influencers, product design and product packaging claims, with a particular interest in environmental claims and greenwashing. She can be reached at [email protected].