Following the highly anticipated Green Claims Directive, Bronwyn Forsyth, Strategist at Strategic Advisory and Communications shares her thoughts on regulation vs compliance, the role of purpose in successful sustainability communications and what getting it right looks like.
Last week marked an influential line in the sand for companies who operate within the EU. On Wednesday the European Commission published its draft proposal of the highly anticipated Green Claims Directive, a bill which aims to clamp down on greenwashing and sustainability marketing.
The new law will require companies to back up environmental claims such as “climate neutral” or “containing recycled materials” and “natural” with proven evidence.
The move comes after a 2020 report by the Commission found more than half of the 150 green claims it studied were “vague, misleading or unfounded.” The marketing Wild West can expect legal ramifications if it’s found to be overinflating sustainability efforts to its consumers.
Regulation vs compliance
“Regulation is driving companies forward in terms of thinking deeper about things that they wouldn't necessarily” says Bronwyn Forsyth, Strategist at Strategic Advisory and Communications, “but I would caution that regulation is just the baseline.”
Bronwyn suggests thinking of compliance as just the ticket to the game. The companies who are winning on the field are the ones who have their ESG impact and their company purpose playing side by side.
Communicating sustainability can be a tricky game to play. Being overzealous can take you into greenwashing territory and steering clear of reporting it can lead you into greenhushing. Both lead to undermining trust in a brand.
“That's why ESG is so overwhelming to so many companies. Coupled with the different rating systems and agencies,” Bronwyn says, “it becomes a compliance box-ticking exercise.”
The role of purpose
To shift away from seeing it as regulation, the conversation needs to turn inwards to a company’s purpose and the value it creates. “The central lever for every company is purpose,” she says.
“Ask questions like why do we exist? How do we add value? And once you've narrowed that field down to three or four key ESG topics that are central to your purpose, it changes the conversation completely.”
It stops being about what are we presenting to the world? And becomes we do this because this is who we are.
What getting it right looks like
“It’s a guiding principle for decision making. An example might be your business is deciding whether to make a specific acquisition. In the short term it could be more profitable but through the lens of purpose, it may detract from where you want to go.”
“For the companies that do it well it drives profitability, it doesn't undermine it. There might be short-term costs involved, but it's enhanced their resilience. It's enhanced their marketability. People look at that and think that's who I want to be associated with.”
“We're in a completely different space that we were in two to three years ago. And it's exciting for companies to sink their teeth into.”
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