Stephen Wynne-Jones on why 2025 may well be a turning point for many businesses, as a broadening array of regulatory requirements, including the Corporate Sustainability Reporting Directive (CRSD), Corporate Sustainability Due Diligence Directive (CSDDD) and EU Deforestation Regulation (EUDR) mean that it’s ‘put up or shut up’ time for firms seeking to embrace a more sustainable future.
As the EY State of Sustainability 2024 report showed, Irish businesses are embracing sustainability like never before, with 81 per cent reporting a heightened focus on environmental issues – a 19 per cent increase on the 2022 survey. Multiple factors are at play here; some 58 per cent highlight the necessity of sustainability commitments to secure capital, while 65 per cent cite more stakeholder enquiries on sustainability as a motivator.
KPMG’s Next Gen Retail survey, published in November, echoed this sentiment, with more than half of consumers stating that brands should ‘go beyond being sustainable’ and take responsibility for reversing environmental impacts, and close to three-fifths (58 per cent) demanding that brands provide greater transparency about their sustainability practices. But as awareness of sustainability has grown, so has the need to get the messaging right.
Greenwashing
EY’s study also noted that 35 per cent of businesses state that a fear of ‘greenwashing’ (aka overstating or fabricating environmental claims) influences their marketing and communication strategies – up from 13 per cent in 2022. Last June, the EU Council adopted its position on the Green Claims Directive, legislation that sets strict requirements relating to the substantiation, communication and verification of environmental claims.
The directive aims to standardise accurate sustainability messaging, backed by scientific evidence, and enable consumers to make informed purchasing decisions. As Monique Goyens, director general of European consumer organisation BEUC, recently put it: “In a jungle of unregulated green claims, how can consumers possibly know which products are truly sustainable? […] Preventing the problem, instead of correcting it once the harm is done, is an innovative move that will benefit consumers, who want to act sustainably and need reliable information to do so.”
Saoirse Ronan fronted Bord Bia’s Origin Green campaign
Stringent penalties await those that contravene the directive – as well as a public ‘naming and shaming’, violators face potential exclusion from public tenders, an absorption of profits generated by the products in question, and a maximum penalty of four per cent of annual turnover in the member state in which the offence occurred. As well as explicitly tackling greenwashing, the legislation aims to create a level playing field for businesses that prioritise genuine sustainability.
While an exact date for enactment of the Green Claims Directive is still to be determined – member states will need to establish individual authorities to monitor compliance – recent history has shown that Irish businesses still have some work to do. In Ireland, tracking environmental claims falls under the remit of the Competition and Consumer Protection Commission (CCPC) and the Advertising Standards Authority of Ireland (ASAI). Allied to Section 4 of the ASAI code, which deals with ‘misleading advertising’, the authority also boasts a dedicated section on ‘Environmental and Green Advertising’ (Section 15), which outlines the need for ‘substantiation’ behind any green claims made.
Impression
Section 15 also seeks to call out ‘extravagant’ and ‘pseudo-scientific’ language around environmental claims’, and clamps down on the use of symbols or logos which may give an impression of a product’s sustainable characteristics. The ASAI’s most recent complaints bulletin pointed the finger at automotive dealer BYD Ireland and home heating firm Firebird, over sustainability claims that were unsubstantiated – in BYD’s case, a claim that the product could ‘Cool the Earth by 1°C’, was found to breach the code on a number of levels, while Firebird’s claim to offer ‘environmentally-friendly’ boilers was deemed an inaccurate overstatement.
Green Aware ambassador rugby player Peter O’Mahony – Photo: Dan Sheridan, Inpho
Other recent cases involved the National Dairy Council’s claim that Irish milk was ‘sustainably produced’ and energy utility firm UrbanVolt’s suggestion that solar was the “most reliable form of clean energy”. In all examples, the complaint was upheld, and the advertiser in question was required to withdraw the campaign. At face value, such rulings can appear harsh – to the layperson, Irish dairy’s claim to be ‘sustainably produced’ wouldn’t even warrant further consideration – but as transparency and accountability comes to the fore, any degree of vagueness is likely to get short shrift.
Trust
As the decade progresses, sustainability is likely to be a critical driver of consumer trust, brand reputation and long-term success, but as the regulatory environment around green products and services grows, so too does the scrutiny of environmental claims.
PS: The UK’s British Retail Consortium recently published a hit list of ‘high risk’ claims made by manufacturers that could be identified as misleading, which are equally valid in this jurisdiction – how many of these have you seen on commonly-available products? 1. Sustainable, 2. Responsibly/Sustainably Sourced, 3. 100% natural, 4. 100% recyclable, 5. Responsible forestry, 6. Certified-sustainable, 7. Natural goodness, 8. Fully recyclable, 9. 100% pure, 10. Eco-friendly.
Stephen Wynne-Jones is the editor of SustainabilityOnline (www.sustainabilityonline.net) and a former editor of Checkout magazine
