In today’s world, the need for companies to demonstrate their sustainable practices has never been more important, with investors, stakeholders and customers alike increasingly choosing brands for whom ESG is integral to their business operations.

However, as the pressure on businesses grows, so too does the risk of inaccurate or incomplete reporting which could lead to claims of greenwashing. A clear and effective internal process for reporting ESG disclosures, and a well-thought-through method for communicating this externally is critical.

Greenwashing is a form of marketing where misleading information may persuade the public that an organisation’s products, services, aims and policies are more environmentally friendly than they are. Under proposed legislation, companies could face multi-million pound fines for promoting their products with unverified environmental claims.

The UK Competition and Markets Authority recently coordinated a global review of randomly selected websites and discovered that 40% of green claims made online could be misleading consumers.

And claims don’t have to be intentionally misleading to be labelled as greenwashing. In today’s fast moving business communications environment, where rival companies compete to tap into the same customer base, the risk of conveying uncontrolled or unintentional misinformation, is high.

Being climate positive is about pioneering leadership and redesigning the way we do nearly everything. Sustainability is no longer a request but an expectation, it’s a business imperative which is still somewhat shrouded by challenges and apprehension.

In many small and medium sized companies, experienced ESG experts are few and far between, which is why the task of reporting often goes to the in-house marketer, who will often have little, or no experience in this specialist area. This can instil the fear-factor as the support to develop this expertise is not in place and the worry of feeling out of their depth, takes hold.

According to research by the Chartered Institute of Marketing (CIM), almost half (49%) of UK-based marketing professionals fear greenwashing accusations, amid increased demand for and scrutiny of environmental claims. A key issue being the fact that 40% admit to not having the relevant qualifications for communicating sustainability.

Proactive leaders must have the strategic foresight to acknowledge that there may be a steep learning curve and one which should be nurtured and supported. It’s therefore vital that businesses increase their focus on supporting its marketer or designated sustainability lead, and arm them with the support, understanding and expertise that is needed to navigate the complex world of ESG disclosure.

Reporting can be complicated – there is a myriad of requirements and for many, their relationship with ESG disclosure is dysfunctional because the understanding and support just isn’t in place. In fact, there has been more than a ten-fold increase in the number of ESG reporting requirements over the last 25 years.

There are also many barriers to overcome when it comes to ESG reporting, including evolving industry regulations and expectations, uncertainty of necessary frameworks, complex data management and understanding as well as managing and quantifying associated risks.

What’s needed is a non-judgemental, honest support-system which can alleviate nervousness and instil confidence. The benefits for businesses who do this successfully are considerable. Not only will they reduce the risk of reputational and financial impacts, but companies can gain a competitive edge and in turn, increase customer retention, while building confidence in the information provided to customers, stakeholders and investors.

Partnering with a third-party expert like Bureau Veritas can support businesses with demonstrating the impact of their ESG actions by making them traceable, visible and reliable, ensuring transparency and providing the tools required to protect clients’ brands and reputations.

In addition to this, effectively communicating sustainability both internally and externally is vital for getting investors on board or increasing consumer confidence and loyalty. Whilst the work to improve sustainability within the business and reporting ESG is undoubtedly the most important part – good work should be celebrated, promoted and communicated.

About the Author

Emily Brennan is the Marketing Business Partner for Greenline Services at Bureau Veritas – a UK leading testing, inspection and certification specialist which supports businesses to comply to the latest health, safety, certification and sustainability standards and frameworks.

Bureau Veritas has experience and technical expertise in helping some of the world’s largest organisations improve their sustainability performance in a number of sectors.

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