Shoppers bear the cost of fake ‘green’ labelling
Clothing retailer H&M has dropped its ‘‘conscious choice’’ eco-label from its online store. The move comes after the company was taken to task by the Netherlands’ consumer watchdog for using the label without explaining what it meant, or the alleged sustainability benefits of its products.
The watchdog’s investigation also slated H&M for publishing information online that promoted ‘‘too rosy a picture’’ of the clothing brand’s environmental efforts. As part of a settlement, H&M agreed to change the information and make a €500,000 (NZ$860,000) donation to a sustainability group.
Half-baked environmental claims are nothing new, but they’ve been rising as companies race to capture the green dollar. Marketers have gone into overdrive, slapping vague claims – ‘‘biodegradable’’, ‘‘climate-friendly’’, ‘‘natural’’ – on their products in an attempt to persuade consumers to part with their cash.
The problem has become so bad that the European Commission (EC) is proposing a ban on claims such as ‘‘environmentally friendly’’ and its stablemates ‘‘eco-friendly’’ and ‘‘climate-friendly’’. Other equally vague terms – ‘‘green’’, ‘‘gentle on the environment’’, ‘‘responsible’’ – are also on the planned no-go list. Sustainability labels that aren’t backed by any reputable certification scheme – think ‘‘conscious choice’’ – would be outlawed as well.
It’s estimated the long-overdue ban would result in millions of dollars in gains for consumers who would no longer be duped by greenwashing – otherwise known as fake green claims – and be better placed to pick products that had a genuine environmental benefit.
The high cost of faux green claims is far from an EU problem. Just as in the EU, fair trading laws here prohibit companies from making misleading claims. But the rules haven’t proved much of a barrier to the deluge of greenwashing, and shoppers have been largely left to bear the costs.
In the past five years, the Commerce Commission has received about 200 greenwashing complaints.
However, it doesn’t have the resources to drag every trader through the courts to get a penalty imposed – let alone compensation for customers.
Some companies get off with just a warning.
Offending claims can turn up on anything from household appliances to cosmetics. They’ve also spread to financial products, such as KiwiSaver, as companies realise that investors are increasingly concerned about where their cash is going.
A review by the Financial Markets Authority of 14 funds promoted as sustainable options concluded it would be a tough task for investors to make an informed choice based on the details companies were providing to back up their claims.
The case for change
In mounting its case for a clampdown, the EC points out that it’s not just a matter of saving shoppers from being misled about what they’re getting for their money.
It argues misleading green claims, coupled with the lack of reliable information about products’ green credentials, are major barriers to shoppers making ‘‘sustainable consumption choices’’ and reaching the holy grail of the ‘‘circular economy’’.
The welter of claims that companies can get away with also reduces the pressure on traders to do anything to improve the environmental performance of their goods, it says. In short, if you can stick a faux sustainability tag on your product and charge a premium for it, why bother doing anything more?
By the EC’s reckoning, a ban on vague green claims has the potential to bring significant environmental benefits, helping to shift demand to products that have a smaller carbon footprint as well as reducing the use of metals, water and other resources.
Its plan wouldn’t rid the market of claims entirely.
Traders would still be able to promote the environmental virtues of a product, provided they could actually prove its superior performance.
Any claim would also have to be specific. So instead of plastering a ‘‘biodegradable’’ label on the pack, the company would have to explain what it meant – for example, that the packaging was ‘‘biodegradable through home composting in one month’’.
The downsides? It’s hard to see any. Indeed, introducing similar rules in New Zealand would make the job of enforcing fair trading laws a whole lot easier.
Until that happens, your best protection is to ignore vague green claims and make a conscious choice to walk away from traders using them to give their products a rosy glow.
If you can stick a faux sustainability tag on your product and charge a premium for it, why bother doing anything more?