Sustainable Marketing: What’s happening right now?
- 01 September 2023
Marketers continue to navigate their way through a constantly evolving operating landscape with technology (AI) and sustainability being the two biggest conversations happening in business today. Marketers and indeed all business professionals have a significant role to play when it comes to sustainability and this article will explore what is happening right now, and the reasons we all need to stay aware and up to date.
As well as looking at the regulations and tightening of guidelines on what organisations can say when it comes to green claims, and the soon to be introduced new sustainability reporting requirements, there has also been a sharp rise in sustainability roles and an increased demand for skillsets in this space, CIM recently launched a new version of their Sustainability Skills Gap Report.
CIM members can download the report now for the latest insights on sustainable marketing, key case studies and stories from leading brands as well as tools and advice for those marketers looking to upskill.
What’s happening right now?
Following the introduction of the consumer protection law, the ‘Green Claims Code’ by the Competition and Markets Authority (CMA) back in early 2022, which provides consumers with important protection in relation to environmental claims, there has been an ongoing increased focus on what organisations are saying in relation to sustainability. This has further resulted in the Advertising Standards Agency (ASA) tightening the CAP Code which is the rule book for advertising, promotions and direct marketing. The most recent update to the guidance took place on 23 June 2023, as part of this update, the ASA stated its intention to continue to take a firm but balanced approach against greenwashing.
This guidance states: “Environmental claims are likely to mislead if the basis of the claim is not clear… Marketers must consider consumers’ likely interpretation of a claim. Where general claims could be interpreted as absolute claims, or have multiple possible interpretations, addition information is required to make the meaning of the claim clear.”
The update also contains further guidance on substantiating claims, including how absolute claims, such as ‘sustainable’ or ‘environmentally friendly’ must be supported by a high level of substantiation.
More information about these updates, as well as a summary of key advice can be found here.
Rises in banned ads as greenwashing continues
Despite the introduction of the Green Claims Code, there has been a notable increase in the number of organisations who have seen their ads banned due to them not complying with the regulations, delivering misleading or false claims, or making claims they cannot substantiate sufficiently.
Under the proposed Digital Markets, Competition and Consumer Bill, published on 26 April 2023 the CMA would have direct enforcement powers allowing them to impose directions and fines without having to go through the courts. Even though green claims aren’t explicitly stated in the bill, it covers, ‘behaviour likely to cause the average consumer to take a “transactional decision” that they would not have otherwise taken, for example, through misleading actions or omissions.’ This means the CMA is unlikely to face any push back in enforcing this in relation to green claims which cannot be substantiated. The fines proposed are as follows:
- up to £300,000, or 10% of a businesses’ annual turnover (whichever is higher), for breaching consumer laws;
- up to 5% of a business’s annual global turnover, with an additional daily penalty of 5% of daily turnover during non-compliance, for failing to comply with a direction.
Whilst greenwashing is the responsibility of the organisation as a whole, it does shine a spotlight on marketers as the primary communicators of a business making it even more important that marketers stay up to date and aware of what is happening. One way to do this is to check in with the latest greenwashing cases. Both the CMA and ASA publically publish what they are investigating and the results of cases are presented with clearly set out reasons and explanations which are all helpful in learning what to do and what not to do.
Greenhushing – the other side of greenwashing
Awareness and external pressures continue to grow on organisations from customers, employees and investors to have credible and robust sustainable development plans. Combining these pressures with the introduction of regulation and tightening of guidelines around making green claims, many industries and organisations of all sizes are opting not to talk about their environmental strategies, plans and actions for fear of being called out for greenwashing.
This trend is echoed in research from CIM’s recent Sustainability Skills Gap Report, which found that regulatory changes, while positive for the environment, have had a negative impact on marketing professionals’ attitudes towards sustainability campaigns, with half (49%) saying they are wary of working on them due to fears for their company or clients being accused of greenwashing.
However, this is not the time to keep quiet about sustainability, with business being a critical driver and catalyst for change. So, providing your claims are genuine, authentic, and backed up by solid evidence, you should be shouting about them and encouraging other organisations to follow.
Sustainability reporting is coming for many from Jan 2024
As well as regulation there has also been a large focus on sustainability reporting. Unlike financial reporting and disclosures, this has not been the case for sustainability, however, this is now going to change. In June 2023, the International Sustainability Standards Board (ISSB) issued its first sustainability-related disclosure to standards this year, which are scheduled to take effect from January 2024.
These standards have been developed by building on existing frameworks while focusing on reinforcing the connectivity with financial statement impacts and the overall implications for financial results and reporting.
The ISSB was established in November 2021 at COP26 with the aim to deliver a global baseline of sustainability disclosures that meet capital market needs.
Head to The International Reporting Standards’ (IFRS) website for ten things you need to know about the ISSB’s new standards.
One global standard for environmental disclosure will allow for broader adoption by companies and should reduce the number of standards a company must report against.
The IFRS believes that these new standards “and the ISSB’s capacity building programme will help build trust, confidence and much-needed global comparability to the sustainability disclosure landscape.”
Finally...
Between these new guidelines around regulation and reporting it will be increasingly difficult for organisations not to get their sustainability development plans moving.
Marketers at all levels and across all roles have a responsibility to ensure they are aware and up to date with what is happening, especially when it comes to communicating about what their organisations are doing in relation to sustainability.
Join our upcoming member-exclusive webinar which will look at some of the key points mentioned in this article and analyse them in closer detail.
If you are looking to keep your skills and knowledge up-to-date, CIM has a range of training courses and qualifications designed to help you on your sustainable marketing journey.
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