Companies are increasingly being held accountable for their climate impacts. Life Cycle Assessments are a great tool to avoid claims of greenwashing – if done right.
Every year, many companies communicate about their carbon footprint. Sometimes for their entire operations, sometimes for a single product. Either way, businesses are increasingly being held accountable for communicating truthfully about the particular ‘green’ credentials of their business or products.
The number of greenwashing incidents are rising. Greenwashing makes brands appear more sustainable than they are. It means branding something as eco-friendly when this is not the case. It may involve marketing tricks, PR maneuvers, or downright misinformation. In other words, misleading their stakeholders into thinking they are doing something good for the climate and for nature.
Was that really recycled plastic?
To mention some examples: Misleading packaging claims, such as claiming bottles are made from 100% ocean plastic when they are not. Introducing paper straws that turn out to be non-recyclable or claiming to be Europe's lowest emission airline when it is not.
Consumers are increasingly becoming aware of the climate challenge. They can spot a hypocrite a mile away, and with their mobile phones and SoMe a click away, they can be ready to start a pressure campaign that can affect brand reputation as well as earnings rather quickly.
Recently, the Danish consumer Ombudsman updated its guidance to companies on ‘green’ marketing and calling a product ‘sustainable’. The Ombudsman reinforced the importance of not making false claims or using vague language. If a company refers to ‘green’ or ‘sustainable’ statements in its marketing, they must be accurate and formulated so that the consumer can understand them. And they must be documented.
Life Cycle Assessments
To claim a product is ‘green’ or ‘sustainable’ requires a Life Cycle Assessment (LCA). This is a standardized method for measuring and documenting multiple environmental impacts over the entire life cycle of a product. From its raw material input to its end-of-life disposal.
A LCA can show not only the total carbon footprint of a product but also where in its production or use there are particular ‘hotspots’ of emissions that can be reduced in a very targeted way. LCAs can also help compare one product to another and differentiate a brand as the one that is most ‘green’.
LCAs are fast becoming a central method for understanding and reducing a carbon footprint. But to be credible, the assessment must be very clear on what is included and excluded in the measurement. And it must seek to be as complete as possible, not leaving out the part of the product value chain with the greatest carbon emissions, just because it is convenient or favorable to the marketing message.
And beware – just because a product might have lower carbon emissions than another similar product, a Life Cycle Assessment may show that it also has a higher water footprint than a similar product. That means companies need to be very careful and vigilant in communicating the credentials. But getting it right will give companies and their stakeholders confidence that they are in fact contributing to a greener, more sustainable, low-carbon world – not faking it.
Helena Barton is a Partner and anthropologist with 20 years’ international experience in helping organizations make good strategic decisions with complex environmental, social and governance (ESG) risks in mind. She has helped a range of global companies and financial institutions build out and integrate their governance, measurement and disclosure of risks and impacts related to climate change, human rights, labour rights, diversity and inclusion, supply chain compliance and other Sustainability / ESG issues. She is a recognized expert in non-financial reporting, serving on several advisory councils within the sustainability accounting profession, and she is the current Chair of GRI's Independent Appointments Committee. Helena is a member of Deloitte's global and regional Sustainability Services leadership teams. She is a regular speaker on e.g. climate risk and private capital finance for the Sustainable Development Goals, incl. at the World Economic Forum in 2018-2019. Visit Helena's blog on Climate & Sustainability here.