Speaking of greenwashing … Greenwashing is a major source of ESG litigation risk. While common, greenwashing isn’t always intentional, and effective communication lies at the core of greenwashing prevention. A recent memo from Charles Russell Speechlys gives tips on how to avoid greenwashing, including tailoring your message to the “most vulnerable” group likely to hear your claim. Environmental claims are often complex and nuanced. Messaging surrounding these claims must be carefully crafted to tell the whole story, and not assume prior knowledge of the recipients. The memo states:
“A high level of understanding by the intended audience should not be assumed; it should be clear if the promoted green benefit will only result from specific action or behavioural change by the consumer. Companies must also be cognisant of the fact that a reader’s concern for the environment may vary and someone who is particularly concerned about the environment may be more susceptible to misleading environmental claims than those who have no interest in environmental issues. Therefore, it is advised that claims are tailored to the most “vulnerable” groups to help protect against claims more effectively.”
As high-level political dramas play out over sustainability in the US and EU, it’s easy to forget the risks that aren’t tied to major national legislation. However, even in the deregulatory environment, greenwashing risks are still present. That’s because many greenwashing cases can be brought under traditional consumer protection laws. While we might see a slowdown in enforcement among federal agencies like the FTC, state Attorneys General, and classes of disgruntled consumers can still make effective cases against greenwashing.
Our members can read more about greenwashing here.
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