A top concern on the minds of people around the world is the environment. Further, consumers are expressing that concern with their wallets.
Surveys say that the majority of consumers will move their loyalty from you to the competitor down the street if they believe that company is environmentally sustainable and you are not. 75% of Gen X and
Gen Z say sustainability is more important than brand name, according to a YouGov study, and they will spend more for products from a company they believe is sustainable.
Companies feel the pressure and want to cash in, often without actually becoming environmentally sustainable.
When a firm exaggerates its environmental actions, it is called greenwashing. The majority of companies around the world admit to doing it in order to win the hearts – read, wallets – of those environmentally-supportive consumers.
What does this mean for you?
Time is not on your side. Governments and activists are hunting greenwashers, and if they find one, the damage can be significant in both fines and lost brand image. Courts around the world are taking a more aggressive position on greenwashing, too.
In order to address Government compliance and global mandates, claims must be aligned and certified under a globally recognised standard, and third-party verified – proving you did those actions within the parameters of the standard you were certified under.
Let’s define the rules of the road for when your environmental actions put you at risk of greenwashing:
• If your company wishes to do environmental projects and not talk about them – wonderful! This is what we all should be doing, and means certification or verification is needed.
• If your company wishes to talk about a project and its results – ‘We put solar panels on the roof and it reduced our energy cost by 15%’ – you do not need a certification, but you need a legitimate third-party to validate the claims.
• However, the minute you start making corporate or product claims, or if you have environmental pictures in your logos or ads, your claims need to be certified under a globally-recognised standard and third-party verified. In other words, your claim of being sustainable is only valid if it is verified to be within the parameters of the standard you were certified under.
Now what?
If you want to satisfy market demand that your company prove its environmental commitment, and you don’t want to risk greenwashing, you need to become certified or verified. But how do you know what to look for in a program?
There are eight components of a sustainability program that will make it sucessful:
• It must include employee performance and health
Sustainability is not just about energy savings or ‘greening up’, it is about people. For most businesses, employees are one of the biggest costs, one of the biggest risks –mistakes, insurance, law suits – and one of the biggest opportunities for new ideas, collaboration, product knowledge.
Every organisation suffers from the Big 5 – insomnia, stress, anxiety, physical pain, mental acuity, losing 5% of profit per year as a result. Make sure your program has a ‘people piece’ that addresses employee performance, health and happiness
• It must certify the business, not the box
Most building – ie ‘box’ – certifications only care about building energy. Building certifications are expensive and hard to market, with poor ROI. You want to say, ‘Buy more of my product because we are a certified sustainable business’, but you do not get much value from, ‘Buy more of my product because we are in an energy efficient building’. You want the certification on your business, not the building your business is in
• It must have a third-party audit component
Oversight delivers credibility and trust. From passing your driving test, to getting your college diploma, to passing a bar exam, we use third-parties to ensure compliance. There are many sustainability programs that deliver a certification based on your ‘word’, and your payment. Make sure the program you choose uses a third-party to validate your work
• It nust follow a respected and integrated global standard
The sustainability industry is maturing and coalescing around a few specific standards. The UN has created its 17 sustainability development goals (SDGs), and 50% of the world’s economies require sustainability reporting.
Greenwashing lawsuits are growing, so don’t pick a program that is not globally respected by, and integrated with, the world leadership groups, or that does not have the ability to integrate the other three legs of the stool – carbon neutrality, ESG and net zero
There’s no reason to spend the time and money, only to then find you are not following the same programs and protocols that the leadership groups have adopted.
• It must include promotion of the certification
Historically, sustainability has been a cost-side play. Most programs and providers have been 100% trained and focused on cost-side measures – energy reduction, carbon reduction, waste reduction, water reduction, and travel reduction.
But we know consumers are searching for certified sustainable companies. If you don’t talk about being certified sustainable they will never know you are. You want a program provider that is built to do the cost-side work AND the revenue-side work; and helps you promote your certification
• It must pursue continual improvement
Sustainability is not finite, it requires long-term commitment. But change is hard for all of us. If the bar is set too high, we can get frustrated and give up. You want a program that lets you come as you are and allows you to continually improve. This will keep everyone happy and committed year after year
• It must require annual updates
Current means credible. You don’t want a program that does not have a date attached to its certification. You want to continually improve, see your success, and annually update your certification to show you are current and credible in your actions.
• It must be at a price you can afford and produce a positive ROI
We could have started with cost, but you need the above seven components at a price you can afford. It needs to show a positive and rapid return on investment (ROI). The cost includes both money and time and covers everything – the certification, the third-party audit, and your work to become certified.
If you use a program that delivers on these eight items, you will address consumer demand, avoid greenwashing risks, and be happy with the performance and ROI of your sustainability program.
David Goodman is CEO and president of Edenark Group