The Delicate Relationship Between Content and Greenwashing

Is creating “sustainable content” an invitation to greenwashing allegations? Or do businesses have a responsibility to do so?

The Australian Market and Expectations.

In recent times, corporate Australia has made a series of bold commitments towards positive action against climate change. In fact, the number of ASX200 companies with net zero emissions targets increased by over 300% from March 2020 to March 2021. Everywhere we look individuals, countries and even fossil fuel companies are committing to a greener future.

This is echoed in the demands of the Australian public with mounting pressure for companies to be open and transparent with their efforts. Recent studies by SEC Newgate found that 74% of Australians think corporates should promote their ESG efforts more often and more clearly.

Which is in line with a 2020 poll by the Australian Institute showing that 71% of Australians want the country to become a leader in finding solutions for climate change. A increase of nearly 10% from the year prior.

The rising tide of public sentiment is creating considerable temptation for companies to overstate or amplify their eco-friendly endeavours. Bringing with it a growing risk of greenwashing – as outlined in, what is considered the leading legal view on the matter – Hutley and Davis’ 2021, Further Supplementary Memorandum of Opinion.

“Greenwashing claims of the kind outlined in this memorandum will become an acute source of risk. Cases of this kind have been emerging overseas and greenwashing could prove to be the focus of what has been called the “third wave” of climate change litigation.”

Green Marketing Brings Risk of Greenwashing

In early November, NAB was caught in the crosshairs of environmental groups for their misleading marketing actions. As seen below messaging across the NAB website has strongly signaled their “green position”. Despite investing heavily into the world’s largest thermal coal terminal with the Port of Newcastle and other fossil-fuel intensive industries.

In similar circumstances, a landmark case by the Australasian Centre for Corporate Responsibility (ACCR) was recently brought against Santos. For a raft of charges, including marketing their company and natural gas products as “clean” and “clean energy”.

Statements that the ACCR claims are factually incorrect due to the proven carbon emissions related to the extraction, processing and end use of natural gas. As well as their net-zero target relying upon unproven technologies such as carbon storage systems (CSS) and blue hydrogen.

Dan Gocher director at the Environmental Defenders Office summarised their position as, “Santos’ ‘clean energy’ and ‘net zero’ claims pose a major risk to investors as it becomes increasingly more difficult to differentiate between companies taking genuine action versus those relying largely on offsets or unproven technologies.”

What is Green Marketing and Should It Be Left To The Sustainable Sector?

The practice of “green marketing” was traditionally employed by the sustainability industry and corporations whose output had a positive environmental impact. In recent times, with the ever-growing demand for companies and nations alike to shift to a net-zero stance and reduce their impact, the practice has gone mainstream.

Green marketing is the efforts made by a company to represent themselves, their products or their services as environmentally friendly. It is these efforts that often go in contrast to a company’s actions and in turn invite greenwashing allegations.

Even the Australian government who is ranked equal last in the world for climate action by the Climate Council recently invested $12.9 million on advertising their own environmental progress.

But not everyone is convinced and there is still an argument for more cautious directors to avoid reputational and financial repercussions, by simply staying silent on environmental impact and goals. Foregoing the benefits of marketing themselves as green in favour of playing it “safe”.

However, as further outlined in the Memorandum and agreed upon by other leading sources, there is still a risk of allegations and other implications brought on by inaction.

“To be clear, in our view, risks relating to greenwashing do not mean it is safer for directors to avoid making net zero commitments… the risks of inaction on this front appear to be profound. Nor do we think that companies can only set out such targets or commitments if they have a complete roadmap or plan for how they will be achieved.”

As argued by Davis and Hutley, businesses do not need to have a concrete and complete roadmap before aligning themselves with net-zero or green marketing initiatives.

Instead, they are in safe legal waters by making a ‘genuine intention on reasonable grounds’ to improve their environmental impact. Without this, any foray into green marketing is a dangerous one.

Genuine Intention on Reasonable Grounds

A commitment of this nature can be characterised by directors ensuring risks have been identified and managed, strategies implemented, appropriate standards used, ensuring that assessments and disclosures are accurate and to then deliver on public targets and commitments.

Once this has been made marketing and communication teams can safely get to work creating strategies to answer the public demand for climate change transparency. A simple summation would be to not overstate one’s impact, to instead inform your audience, investors and the general public as to the realistic commitment your company has made.

Progress towards environmental goals can be effectively marketed in many ways, most notably content marketing. 70% of Australians would rather learn about a company through articles than through advertisements.

M.J. Bale is a great example of corporate Australia delivering transparency to genuine climate targets. A series of articles released on their website and shared on their social channels over the past year, provide detail, progress and explanation of their path towards a carbon neutral organisation by December 2021.

“To the greatest extent possible M.J. Bale will reduce our carbon footprint, and where existing technologies prevent us from eliminating carbon output, we will completely offset. The assessment will be independently audited, and only verified projects operating within the regenerative agriculture and renewable energy spheres in Australia and abroad will be utilised for offsets.”

Employing a long-term content marketing strategy such as M.J. Bale, that seeks to document the journey, not just the current environmental position, is a safe way to build trust and avoid litigation risk.

There is no denying that green marketing without a genuine intention or reasonable grounds to improve environmental impact invites greenwashing allegations. Companies need to properly identify their position and ensure their communication strategy is in line – avoiding overstating or emphasising their commitment. Companies who refuse to do so will be left behind and will be operating in stark contrast to growing consumer demands.