Do green labels mean anything?

In our new Synergy column, Cosmos writers explore how we’re dealing with the urgent issues of climate change.

I think of myself as a pretty savvy consumer. I shop around at the markets and avoid letting advertising sway my decisions.

But I do have a soft spot when it comes to eco-labels on products, which will end up in my basket almost every time. 

Whether clothes, smoothies, paper plates or even toilet cleaners, it’s a safe bet there’s probably a ‘sustainable’, ‘environmentally friendly’, ‘green’ or ‘greener’ version on the shelf.

Standing here in the aisle, looking at a dozen different antibacterial gels for my toilet bowl, I’m left scratching my head: what does it mean if your favourite brand has a green claim on the label? Is it actually greener?

These are questions, at least according to Chandni Gupta, the Deputy CEO of the Consumer Policy Research Centre (CPRC), that don’t have easy answers.

“Today, ‘sustainable’ could mean anything. There’s no consistent understanding of the term,” Gupta says.

“It’s extremely challenging for a consumer today to tell the difference between a genuine green claim and one that’s meaningless.”

Some terms have direct, quantifiable meanings when it comes to consumer goods.

For eggs to be ‘free range’, the chickens that laid them must have ‘meaningful and regular access to an outdoor range during daylight hours during the laying cycle’ and have fewer than 10,000 hens per hectare. This is part of a 2017 standard put in place to help build integrity into the ‘free range’ label.

But the same can’t be said for many green or sustainable terms.

“At the moment, there’s really nothing stopping a business from using words like ‘sustainable’ or ‘eco-friendly’,” says Gupta. “It can mean that consumers have to navigate various claims that all say the same thing, but could mean very, very different things.”

There’s really nothing stopping a business from using words like ‘sustainable’ or ‘eco-friendly’

Chandni Gupta

Right now, businesses can take and define green terms in ways that work for them. They can slap eco-friendly terms on their packaging, but without actually needing to change their practices for the better.

On the other hand, some companies are making their products more sustainable.

This presents a problem. If, for instance, two similar products with different carbon footprints both use the same eco claim, it’s very difficult for a consumer to know which product is the greener of the pair.

A shirt made from ‘sustainable cotton’ could be made from organic cotton, or cotton that uses less water, or maybe the dye is less toxic for the environment. It might even be all – or none – of these.

“What one business might consider to be sustainable can be very different from another,” says Gupta.

The wash on green claims

Late last year, the CPRC released a report looking into the consumer experience of green claims in Australia.

In 24 hours, its researchers trawled internet catalogues and physical store shelves for instances of green claims. Of the 122 products they found, only 37 – less than a third – had any evidence to support them.

Most claims were found in the fashion, beauty, and household products industries, although all up they were spread across 17 different sectors.

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The CPRC found the fashion industry is one of the most prolific industries for green claims. Credit: triocean/iStock/Getty Images

Compounding the problem, the report also found that, just like me, almost half the consumers who participated in the research regularly consider sustainability when purchasing products.

There are laws that could be used to regulate this green wild west, but they haven’t been very successful.

“The ACCC and ASIC are currently doing some things in this space,” says Gupta “They’re putting out guidance, or they’re making green claims a priority, but they can only go so far.”

A few things are set in stone – businesses can’t mislead or deceive consumers.

“Under the Australian Consumer Law (ACL), it is unlawful for businesses to engage in misleading or deceptive conduct,” an ACCC spokesperson tells Cosmos.

“This includes false or misleading statements about a business’ environmental and sustainability credentials.”

But policing sustainability branding isn’t always so straightforward.

“One of the challenges with greenwashing is that some practices don’t come under that [regulation],” says Gupta.

“The claim could be accurate, but it might be meaningless when looked through the lens of actually achieving an environmental outcome.”

A company could sell a product and say it’s sustainable if it has recycled packaging. But that doesn’t mean much if the product inside is environmentally damaging.

The claim could be accurate, but it might be meaningless when looked through the lens of actually achieving an environmental outcome.

Chandni Gupta

While calling the product sustainable might be partly true, the use of the term can be so broad that it’s not helpful for consumers.

So, what can the ACCC do?

“Where a business has made a false environmental claim, the ACCC can pursue enforcement action under the ACL. In appropriate cases, this may lead to significant penalties,” its spokesperson says.

“In determining whether to take enforcement action in respect of environmental claims, the ACCC will consider whether genuine efforts and appropriate steps were taken by the business to verify the accuracy of any information that they relied on.”

No company has been found in breach of consumer law for misleading greenwashing claims, but it may only be a matter of time.

In 2016, the ACCC took Kimberly-Clark (the makers of Kleenex products) to court, alleging it made false or misleading claims about how ‘flushable’ its flushable wipes were.

But the federal court dismissed the majority of the case – and the ACCC’s appeal – saying the term wasn’t misleading, even if the product didn’t fully break down in the sewerage system. This year, the Australian Securities and Investments Commission launched landmark proceedings against Mercer Superannuation, alleging the super company made “misleading statements about the sustainable nature and characteristics of some of its superannuation investment options”.

Ensuring companies do the right thing, and that action can be taken when they don’t, is difficult. 

“The ACCC is also planning a range of future compliance and education activities in relation to environmental claims,” said the ACCC spokesperson.

“Where warranted, the ACCC will also raise, in the appropriate forum with government, any concerns about any fair trading or consumer protection compliance gaps. For example, whether there is a need for greater regulations around the meaning, use and substantiation of environmental claims.”

So, the ACCC is working on solutions, but there’s probably a way to go.

Is there another, quicker, solution?

A matter of trust

Your favourite products might carry a small icon that makes you feel good about putting them in your basket.

Think the green ‘Australian Made’ triangle, the ‘Fairtrade’ man on our coffee or chocolate, or even the B Corp logo increasingly popping up all over our products. 

These are called ‘trust marks’.

I originally thought these could be a solution to this whole mess – their purpose is to provide consumers with more certainty about aspects of their product.

So, can we just throw out green claims and bring in trust marks? 

“Research found that 69% of Australians are likely to be influenced by a trust mark, and close to a third would look at a trust mark to help them fact check or verify green claims,” says Gupta.  

Gupta agrees trust marks are part of the solution, but they can’t completely address the issue either.

Complicating things, most trust marks are privately managed. Plus, there’s the sheer number of them.

“There are just so many trust marks out there. The ACCC found that there’s four just for cacao powder,” Gupta says.

Let’s take B Corps.

B Corp certification was devised by the global trust mark not-for-profit, B Lab.

To become a ‘Certified B Corp’, a company assesses its impact according to particular social and environmental standards, organisational accountability and transparency.

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B Corp logos are appearing on products, and company offices. Credit: Smith Collection/Gado/Getty Images

“You complete over 200 questions in the B impact assessment, and receive points according to the evidence you provide against those criteria,” a B Lab spokesperson tells Cosmos.

“You need to get a minimum of 80 points, update your company’s constitution to be accountable to the interests of all stakeholders, and agree to be transparent about your impact by publishing your report on the global directory.”

But while the overall impact score of your favourite B Corps can be checked online, you can’t see where a company excels by simply looking at their trust mark.  They might be really good at the environmental side, or they could be better than other companies at their governance or social impact. These are all good and important things, but trust marks sometimes bundle many KPIs under a single banner.

B Lab is currently consulting on new standards which will require businesses to satisfy minimum requirements across some impact areas, however, these won’t be implemented until at least 2025.

Certifications like these can be a good, especially with transparent standards, but standing in the cleaning products aisle at my local shop staring at a plethora of trust marks, I still have questions.

Are there too many trust marks? How do we ensure we can trust them? And what do we know about the companies that create or manage them? 

We’d really like to see regulators … have the power to make rules on generic environmental claims.

Chandni Gupta

Gupta thinks we need to take an egg out of our free-range basket and move towards standard definitions for commonly used terms and banning deceptive labels.

“What we’d really like to see is regulators like ACCC and ASIC have the power to make rules on generic environmental claims.”

Sustainability, defined

The European Commission is a few months from passing a law banning unsubstantiated green claims in the EU and work to specify how producers justify their sustainability claims is underway.

Lawmakers hope it will help businesses who are genuinely trying to improve the environmental sustainability of their products and hinder those who are just trying to get on the bandwagon without substantial change.

The Commission wants independent, science-backed verification performed on products before they hit the shelves with a green claim. Companies will also need to identify environmental impacts relevant to each product.

It’s also reforming trust marks.

With 230 different ‘environmental labels’ already in market, the legislation will ban new ones – unless they are developed through the EU – or will introduce a higher level of ‘environmental ambition’ than previous ones.

This – the Commission suggests – will push progress forward and stop companies coasting on labels that give them more green credit than they deserve.

“They’re basically looking at it through three lenses: Is it reliable? Is it comparable? Is it verifiable?” said Gupta.  

“And it’s the type of action that we need to see here in Australia as well.”

With all that in mind, do green labels mean anything?

It seems, at least for now, it’s almost impossible to prove what ‘eco-friendly’ claims really mean, and it shouldn’t be this hard for ethically minded shoppers to separate the true green products from the imitators.

But it doesn’t have to be this way, and governments, companies and regulators can implement rules and regulations – like those in the EU – that weed out greenwashing and protect claims made by truly sustainable companies.  

“We need those standards, those blacklists, those expectations set through laws and regulation to be really clear about what can and can’t be said,” says Gupta.

“To ensure that when people are looking at a product, they can make a real, meaningful choice.”

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