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Forrester Eyes Dangers Of “Greenwashing”

April 25, 2022

According to Forrester, 46% of online adults in the US believe brands should take a stand on climate change. This pressure, in turn, is causing firms to “walk the talk” and act on their pledge to protect the environment.  

As companies rush to capitalize on the opportunity of sustainability, a risk arises of being accused of “greenwashing” — when a business is believed to be misrepresent its sustainability goals and initiatives.  

This Earth Day, Forrester has published new research to help marketing leaders navigate the business risks posed by climate change and drive sustainability transformation.  

The report, From Greenwashing To Best Practices On Sustainability Communications, reveals the challenges of communicating sustainability initiatives and outlines best practices for marketers managing sustainability communications messages. Key findings include:  

  • Greenwashing is just the tip of the sustainability communications iceberg. Beyond green marketing, sustainability issues will take up more of marketers’ working headspace. As they respond to values-driven customers, firms that embrace responsible marketing will get a lasting competitive advantage.  
  • The cost of miscommunicating is high. Regulators, activists, NGOs, investors, and customers will scrutinize your communications. Beyond legal action, negative word-of-mouth, bad press, and brand equity loss, one of the main business risks is that customers will turn to competitors. According to Forrester research, 24% of US online adults would stop doing business with the company permanently if they see a company say or do something that opposes their values. 
  • The cost of paralysis is even higher. The specter of green-, purpose-, or woke-washing shadows marketers’ sustainability communications. However, firms that don’t communicate on their ESG efforts risk falling behind self-promoting competitors.  
  • Long and complex supply chains conceal an array of potential sustainability sins. For example, Swedish retailer IKEA relied on a well-known independent certification program for its wood sourcing, however activists and media blamed the retailer for weaknesses in that program.  
  • Forced transparency opens every decision to scrutiny. The EU already stipulates corporate disclosure of a range of environmental and social figures. Authorities in the Americas and Asia Pacific are following suit. This transparency opens every business up to greater scrutiny by external stakeholders. 
  • Marketers need to incorporate six key perspectives to safeguard their sustainability communications. These include understanding how the product impacts the climate, showing evidence of social impact, reviewing how the product is perceived by consumers through an ESG lens, understanding the ESG challenges of the relevant industry, tracking regulations concerning the product, and having awareness of older rules, claims and litigation to help make better decisions when sharing stories.

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