Corporate sustainability: communicating 'green' without 'washing'

It is crucial for businesses to communicate their commitment to sustainability and valuable communication can generate many benefits, including attracting consumers who increasingly value these issues. Indeed, today, the number of young people paying more attention to the environment in their consumer choices has increased. One study revealed that 50 per cent of millennials and Generation Z respondents are willing to pay 10 per cent more for a sustainably produced product, whereas for previous generations this ranged from 34 per cent to 23 per cent of the sample. This shift on the part of consumers is crucial, and, according to economist Leonardo Becchetti, there is a power that all citizens can exercise, that of "vote with the wallet". The consumer in fact, has the power to reward or punish companies through their purchasing decisions.

The results of the 2021 edition of Sole 24 Ore's Sustainability Observatory for listed companies show that the commitment of companies to sustainability is growing strongly. The fifth edition of the survey, which involved 117 companies listed on the Italian Stock Exchange, shows that 55% of companies declare a significant reduction in CO2 and 80% report a commitment to reducing emissions and using renewable energy. In addition, as many as 81 companies report having an environmental policy, but only 15 use emission analysis and tracking tools. Companies with sustainability-conscious policies are thus on the rise, but the measures required to achieve the stated targets are not always clear. This opacity in communication is one of the main risks that can arise when a company tries to communicate its sustainability commitments because one risks being accused of greenwashing.

The term greenwashing was coined in the 1980s to denounce a common practice in hotels: leveraging a sense of responsibility to get customers not to request laundry when in fact the interest was purely economic. From this moment on, the term spread to denote companies that evoked a false environmental commitment. Already in the 1960s, however, some American activists used the term ecopornographic to refer to the communication of companies that tried to appear more sustainable than they actually were. On the occasion of the first Earth Day in 1970, moreover, it was estimated that companies spent eight times the amount of money on eco-pornographic advertisements than they invested in reducing their environmental impact.

greenwashing is therefore not a recent phenomenon, but the increased focus on sustainability has led to an increase in unfair advertising practices in recent times. In February 2021, the results of the annual survey carried out by the European Commission to assess possible violations of EU law in the area of consumer protection in digital markets were published, and an increase in unfair greenwashing practices was found. Out of 344 apparently dubious claims, 50% were not provided with sufficient information to verify their veracity and in 37% of the cases the wording was vague and unclear. In this context, the main damage to companies is reputational in nature. Another risk linked to greenwashing is that of putting the entire system of certifications and sustainability communication into crisis, because the consumer will become increasingly distrustful of all companies, even the virtuous ones.

Fundamental is the function of the control bodies for the supervision of unfair commercial practices. At the national level we have 2 entities: Authororità Garante della Concorrenza e del Mercato (AGCOM): an independent institution that sets the rules for the protection of competition and the market. It often exercises its investigative and sanctioning powers against greenwashing practices;
. Istituto dell'Autodisciplina Pubblicitaria: it is responsible for defining the parameters for 'honest, truthful and fair' commercial communication to protect both consumers and fair competition among companies. Furthermore, at European level, we have the European Anti-Fraud Agency, the European Securities and Markets Authority (ESMA) and the Consumer Protection Cooperation. The latter was created by the European Union in 2017 to protect consumers and investigate sustainability claims on companies' websites in a coordinated manner.

How has young people's interest in sustainability issues grown? What are the main risks related to greenwashing? How can companies effectively communicate their environmental commitments? To answer these questions, and more, we have launched the project Pillole dall'Oasi: la Digital Academy by 3Bee for Sustainability Professionals, realised in collaboration with Neutralia and Italian Tech Academy. A course composed of 12 modules dedicated to training on topics related to business sustainability, with the involvement of 23 experts from the world of research, innovation, business and finance. An opportunity not only for training, but to join an exclusive community to receive monthly updates on news from the world of sustainability. Do you want to make your commitment to protecting the environment tangible and ensure the best training for your employees?