The fashion sector is now constantly under pressure for its sustainability policies and claims. For brands, it can be challenging to demonstrate credentials when selling products as ‘eco-friendly’ or ‘sustainable’. Yet, consumers are becoming increasingly sceptical of these claims and they are right to exercise caution.
A new trend has now come to the fore – greenwashing. This refers to when a business makes an unsubstantiated claim that makes consumers believe their products are environmentally friendly or have a greater positive environmental impact than they actually do. The fashion sector is largely unregulated on sustainability and many green initiatives run the risk of being completely undermined. Especially when all factors of a products’ makeup need to be considered when making environmental claims. This is from materials to water consumption to transportation of products.
Consumers are becoming increasingly savvy to greenwashing and are quick to expose any claims that don’t add up. If retailers attempt to benefit from the price premium and positive image associated with being environmentally friendly without having the necessary data to support their claims, it can result in long-term harm to their brand reputation. Even if they are genuinely making efforts to be eco-friendly. To regain consumer trust and demonstrate their commitment to sustainability, businesses must have trustworthy and precise claims to their products. To do this successfully, data is essential, alongside transparent processes that support their eco-friendly goals.
Brands cannot be complacent, despite a lack of regulations
Sustainability in fashion is currently not defined by law, and retailers are merely recommended to avoid misleading their customers. The government’s Competition and Markets Authority (CMA) can penalise brands for false advertising. 82% of companies would accept fines to avoid implementing sustainability programmes. There are minimal repercussions when brands make mistakes. But there is also little advice on how to make the right choices.
After business interests fought to weaken EU greenwashing rules, new standards have fallen under attack. The current lack of clarity in regulations makes it unlikely that they will make a meaningful impact. The insufficient ESG benchmarking in sustainable investments fails to provide a clear direction for retailers to prioritise their actions. Legally, clothing companies can keep making false claims that their items are environmentally friendly or carbon neutral.
Yet, a single allegation of greenwashing is enough to undermine a brand’s credibility and push a customer to seek alternatives. Today’s consumers are actively seeking genuinely sustainable options, and nearly all business leaders (95%) consider sustainability a critical priority.
Waiting for new regulations is not an option for retailers. They must take proactive steps to substantiate the credentials they advertise on their products. Or else, face the potential of permanently losing their customers.
Tell the full sustainability story
When retailers label a product as “sustainable,” “recycled,” or “green,” it can be challenging to determine what that actually means. In many cases, these claims only pertain to the materials used to make a garment. This makes it difficult to differentiate between legitimate and false messaging. For example, the statement “made from recycled materials” could mean that as little as 1% of the final product is made from recycled materials. As a general rule, vaguer claims are more likely to be a form of greenwashing.
In addition to materials, there are several other factors to consider, such as:
- shipping methods
- amount of water consumed
- waste generated during the manufacturing process
- total carbon emissions generated throughout the product’s lifecycle
- the packaging and in-store practices
While many brands are implementing robust sustainability measures and making progress in these areas, proving their efforts can be challenging.
By gathering company-wide environmental, social, and governance (ESG) data, brands can effectively communicate their sustainability efforts. By analysing all aspects that contribute to a product’s lifecycle, businesses can identify areas for improvement and showcase their progress in sustainability.
Tech helps cut through eco-noise
According to Tonje Drevland, a leader in sustainable retail, inaccurate data is more detrimental than having no data at all. Companies don’t intend to get caught up in greenwashing scandals. But if they can’t deliver on promises, meet targets or provide reliable data, it can lead to loss of trust from consumers and investors, and ultimately damage the brand’s reputation.
Green business process management provides retailers with a means to delve into their current operations. It enables leaders to better understand, document, execute, and continuously enhance processes. According to 28% of organisations, data integration has had a significant positive effect on their sustainability initiatives. By collecting accurate and dependable ESG data, retailers can make more informed choices and monitor progress in all areas of business objectives, including sustainability. Sustainability dashboards, reports, and analyses can be produced by leaders to assess how initiatives are affecting their sustainability credentials. Process mining takes things a step further by ensuring that actions align with a brand’s eco-policies and pinpointing where improvements are necessary.
Although regulations regarding eco-claims are still in their early stages, it’s likely more will come in the future to combat unsubstantiated claims. Whilst most brands have good intentions, failing to meet targets or provide evidence of their efforts can results in accusations of greenwashing. Therefore, retailers must have complete control and visibility of a product’s entire lifecycle and supply chain to avoid falling into the green washing trap and to demonstrate their sustainability credentials. By leveraging technology, reliable data, and improved processes, retailers can enhance their sustainability approach and make truthful and impactful statements back by data, cutting through the generic ‘green’ noise.