Concerns around businesses labelling their own investments as ‘green’, even when they might not have the credentials to back up their claims, has led to experts establishing the Green Technical Advisory Group (GTAG).
GTAG will support the Government’s goal to deliver a ‘Green Taxonomy’, a common framework which sets the bar for investments which can only be defined as environmentally sustainable.
The Green Taxonomy comes as part of Government efforts to improve the environment and accelerate the transition to a net zero economy, all while creating green jobs.
This is in a bid to clamp down on the unsavoury practice of greenwashing, a process adopted by businesses in which they make an unsubstantiated, exaggerated, false or misleading claim about their investment practices. Organisations across many industries do this with the aim of deceiving consumers into believing that their products or services are either sustainable or environmentally sound.
In fact, more than half of Financial Services professionals believe that greenwashing is rife within their specific industry, according to a study by data agency iResearch Services, which polled 550 decision-makers at financial institutions. 38 per cent believe every business is operating ‘unethically’ by claiming to be environmentally sustainable.
In addition, it’s thought that the rise of ESG may have increased the number of institutions looking to inflate their environmental practices, using greenwashing and sustainable labels to a growing range of products.
The good news is that having a more standardised ESG framework with clear KPIs will eventually assist in dismantling the greenwashing movement, something that is particular pertinent to the Financial Services industry with the rise of Green Finance.
It’s also hoped, with GTAG’s intervention, that it will become easier for investors and consumers to understand precisely how a given firm and its actions are impacting the environment, while helping businesses to make green financial decisions.
It’s believed that better data and improved understanding around this issue will help everyone to make informed green choices, support investment in sustainable projects and boost efforts to tackle climate change.
Here’s our advice on how to boost your own firm’s green credentials.
Do your research
Ascertain the sustainability expectations of your clients or customers and ensure that the green claims of your business, product or service are true, consistent and align with what they want. This will position your brand as authentic, which will in turn allow you to build up a loyal following. It’s also important to look at your entire business’s chain of command and check whether any operational aspects contradict your green claims.
Take a stance on green positioning
Green positioning is how companies communicate their green values through marketing and PR. It also includes how transparent they are perceived to be by their customers. Stating your values in a clear and concise manner is the first step and can be done via your company website.
The tone and practicality of the goals should strike a balance between being informative but never patronising. This will help you connect with clients who share your green values, while educating those who are less aware. The language used to express your values should also make it clear that they are genuine and central to your company. If those values are not central to your company, a serious conversation needs to happen at senior level.
If your company is not totally green, admit it. Nothing is perfect and people will appreciate your honesty. Acknowledge the areas of your product or business that are not yet green and outline your commitment to work towards that goal, instead of waiting for critics to point them out. State your green claims as they are, rather than overpromising their credentials. This means that you clients will be more likely to organically share your story with others.
Keep it transparent
Make it easy for people to understand and check the green claims you are making. Providing customers with complete transparency and making your green claims and associated details accessible to the public not only reassures them of your reliability, but also allows for a wider range of potential clients.
Communicate with your stakeholders in a dialogue about your green marketing and whether your claims are accepted by your employees, suppliers and clients. Gather feedback from them as to whether you’re on the right track or perceived to be greenwashing.
Sustainability reports provide a good way to keep shareholders, clients and activists informed about your environmental targets and progress towards them, while being bold in your messaging is undoubtedly impactful.
Realise it’s a marathon, not a sprint
Highlight in your marketing that going green in your business is a journey and that you’ll always strive to improve and do better. Acknowledge areas that are environmentally unacceptable, commit to work on those areas and seek feedback and help from your clients, local community and employees.
One way to improve your company’s green credentials is to reduce the plastic use throughout your workplaces.
If you would like to discuss this or any of the topics covered in our articles, get in touch.