Webinar Recap | Credible Claims: Exposing greenwashing for a sustainable future

In an evolving market, the spotlight on environmental claims for products and services is intensifying. This trend isn't confined to Aotearoa New Zealand, with instances of greenwashing accusations on the rise globally.

Regulations are tightening, and consumers are putting the pressure on for validated claims and third-party accountability. The paradigm of responsibility is shifting for businesses, and the need for international recognition of this responsibility is key.

Our event was opened with a karakia, whakatau, and waiata tautoko performed by Te Aroha Grace, a representative of the local iwi Ngāti Whātua Ōrākei, and Lillian Grace, Toitū Envirocare's Chief Partnership Officer.

Panelists:

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Additional Q&A

Business will always try to market increased consumption of their products. Who's responsibility is it to speak to reducing consumption as a priority which could reduce corporate profits?

Answer from Louise Nash, Circularity.

If I can potentially rephrase the question to share my perspective on this issue - Businesses will always be focused on creating value from their products and services to ensure their survival, paying wages, shareholder value etc...Marketing is part of that. To compete against the millions of products out there for peoples attention, they want to make sure they are top of mind. This is the economic reality of being in business and why greenwashing occurs because businesses are looking to use the levers available to them to appeal to customers. But yes there are significant negative consequences of this. So who's responsibility is it to address this? If we take a market approach it is us as buyers of products to not buy something which in turn creates shifts from businesses to produce others products or change how they operate. Government gets involved if this breaks down, or harm occurs whether this is social, economic or environmental. The appeal of a circular economy in theory is that we still get to consume without the extraction of resources, we shift to access over ownership for durable items and for everyday items these are made regeneratively with renewable resources but of course we are a long way off that! So what are our options to create the shift? Tax profits? Penalise virgin resource use (this is already happening under market conditions). What else?

What regulatory changes would you support to reduce greenwashing in NZ?

Answer from Teressa Betty, Toitū Envirocare.

Aotearoa New Zealand is leading internationally with legislation that combats greenwashing, such as with the Carbon Neutral Government Programme (CNGP) and Climate-Related Disclosures (CRD). At Toitū, we support our members to meet these legislative requirements, but also crucially go beyond. Importantly however, through collaboration, businesses can lead this country too - to have not just a net zero impact, but a more positive one on our country's environment and people. Toitū is actively working with the government and submitting evidence to their consultations to ensure that we aim higher because climate change is the biggest crisis we're facing.

If the speed limit is 30km/h you are either under or over, there is no grey area. Should sustainability claims only be possible under measurables (science based) - X amount of carbon emissions - Y percent of recycle goods...?

Answer from Nikki Wright, Wright Communications.

It would clear up confusion, for sure. Fundamentally, I believe our legislation needs tightening and regulators need more teeth so whatever makes it easier for them to penalise bad actors. If there is too much grey area it becomes too time consuming and uneconomic to investigate. That said, we would encourage all businesses to share progress. If there was a standardisation of what best practice looks like it would limit creativity of the message and a stunting of sharing progress. Every company would be saying the same thing. Also, it would prevent small businesses from participating in emerging sustainability storytelling which would be a shame. Better perhaps to have standardisation of certification so there is less confusion around eco labels.

There are so many regulatory bodies and certification options available for corporations to substantiate their claims, which can be complicated. Does the panel feel that there should be a single body in NZ to simplify the process?

Answer from Jason Rudkin-Binks, Hudson Gavin Martin.

It might be easier to have a single body to simplify the process, but it seems unlikely that this will happen – as this isn’t the model that other jurisdictions have adopted/proposed to date. The proposed EU model does require Member States to set up verification processes (to be performed by independent and accredited verifiers, possibly themselves or overseen or anointed by Member States or a public body) but what is unclear is how countries / traders outside of the EU would participate. That is a primary watch point for New Zealand.

Should marketing take more responsibility for greenwashing?

Answer from Nikki Wright, Wright Communications.

In my experience marketing is already at the table but they are less knowledgeable about greenwashing than their sustainability peers so I endorse cross-functional collaboration and encourage marketers to get familiar with key sustainability topics and risks.

Is it greenwashing for an airport to declare itself 'carbon positive', when it can only make that claim by excluding Scope 3 emissions from airline takeoffs and landings?

Answer from Teressa Betty, Toitū Envirocare.

At Toitū, that wouldn't meet our climate positive certification, which requires measurement of the Greenhouse Gas Protocol scope 1 and 2 emissions, and a subset of emissions associated with an organisation’s value chain under scope 3. This subset of mandatory value chain emissions includes activities that an organisation has some direct influence over, such as business travel or waste sent to landfill. Excluding scope 3 does get a lot of scrutiny because, as with this airport example, it can be significantly greater than a business’s own operational emissions. We recommend an organisation having full visibility of where emissions occur, so that you can look to reduce emissions where you can. If you're an airport, get in touch with us so we can help and ensure the claim you're making is evidenced!

Do you have any examples of 'Good Samaritan' laws applying to greenwashing? i.e. an organisation is evidently trying to act in good faith, but seems to still be greenwashing, unintentionally or otherwise. How would you raise this, or deal with it?

Answer from Jason Rudkin-Binks, Hudson Gavin Martin.

Greenwashing is currently addressed under New Zealand's fair trading laws, which make it illegal for anyone in trade to make false or misleading claims. It doesn't matter if the organisation was acting in good faith or didn't intend to mislead - the test is whether a reasonable person in the consumer's position would likely to have been mislead or deceived. However, in practice, the Commerce Commission (who is responsible for enforcing these laws) will weigh up the cost/benefits of bringing proceedings and will often issue information or compliance advice where potential breaches are detected. This can still create brand reputation headaches, and incur costs relating to responding to Commerce Commission enquiries and replacing marketing materials etc - so it's essential that businesses:
(1) keep records and copies of information that substantiate their claims, and have this information collected before the claim is made (this is required by law); and
(2) get a pair of ‘fresh eyes’ to look at claims that the business wants to make from someone who hasn’t been involved in the development of those claims (i.e. your legal team or someone in a different area of the business). This can help to identify any potential issues before the claim is made publicly (e.g. the claim is technically correct but the overall impression is still misleading, and therefore illegal under our fair trading laws).

Does the panel have a view on how we can get more traction and support for New Zealand nature based solutions which support biodiversity and carbon sequestration locally rather than New Zealand organisations predominately using overseas carbon credits from the likes of wood stoves, which could be argued as a form of economic greenwashing.

Answer from Tobias Tripp, Toitū Envirocare.

It is vital we all reduce our emissions first and foremost. Carbon credits can play a key role in the transition to a low carbon economy as they allow individuals, organisations and communities to balance the scales for those unavoidable emissions on the path to reduction. There are many carbon credit options out there, from all over the world, but they are not all created equal. We apply a thorough set of principles to determine if a given project is real, reliable and meets our quality standards

We believe overseas projects provide a benefit both to the atmosphere (by reducing carbon as carbon knows no borders) and directly to the smallholders and rural communities that are producing the credits. These communities have contributed very little to climate change, however, already feel its effects.

Locally, we're in support of New Zealand nature based solutions if they have the right credibility and integrity in place. But they can't be operated in isolation of reduction initiatives and that is a mandatory requirement of our certifications. We also believe there needs to be a strict criteria for which they are governed and right now there is no national framework in the voluntary market. The Toitū carbon programme rules has the strictest protocol and requires three due diligence processes that are undertaken hen elevating credits. This includes requiring projects to meet standards set by the International Carbon Reduction and Offset Alliance (ICROA) as part of their code of best practice. This ensures any carbon offsetting is meeting international best practice in credit quality (supply side integrity) and offsetting integrity.

Regarding green claims, is there any role model - other industry practices or governance we should look at? Maybe the medical sector?

Answer from Teressa Betty, Toitū Envirocare.

It's fluid right now with various enforcements and standards to be mindful off. There is regulation that is enforcing governance and transparency over greenhouse gas emissions such as the CNGP and CRD programmes I mentioned earlier. The Fair Trading Act is a good baseline for all companies to use as a sense check, while the panel discussed whether it has teeth, it's not a risk worth taking and holds Aotearoa New Zealand's guidelines to help businesses understand their obligations when making environmental claims.

The Toitū carbon standard sets out the leading standard for carbon certification programme rules and is available online. This is a great resource to understand what is required to make credible claims and lays out in detail what steps to take to achieve to the Toitū mark.

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