Sustainability: Avoiding the Greenwash
The ongoing and evolving conversation around sustainability remains a hot topic for retailers and suppliers alike as each side of the equation continues to develop new products and packaging with the goal of having a minimal impact on the environment.
While not new to the sustainability discussion, greenwashing has resurfaced recently as the number of claims regarding topics ranging from how products are sourced to whether a packaging is truly recyclable or compostable continues to grow.
Experts that spoke with Store Brands feel the greenwashing discussion has evolved in recent years. In the past, when sustainability initially hit the radar of retailers and product developers, there was a greater sense that claims related to a product’s sustainability bonafides were purposely false.
Today, however, the overriding thought from industry insiders related to greenwashing is that false claims largely are not the result of nefarious intentions, but a variety of issues including a lack of understanding of evolving regulations or confusion around rules put in place by local governments.
“(Greenwashing) is definitely still an issue, but not because companies are trying to greenwash,” said Dawn Nowicki, vice president of Marketing with packaging supplier MRP Solutions. “Today it’s more from a lack of consistency in standards or a lack of clarity in how certain things are defined.”
Experts noted that confusion related to recycling and composting claims made on certain types of product packaging have the potential to cause an unintentional greenwashing issue. Susan Thoman, principal and managing director with the Compost Manufacturing Alliance, noted that consumers who think they have a certain understanding of the claim being made on a product may actually misunderstand what certain terms mean.
“When consumers are confused, they may feel as if they are being greenwashed,” she said.
Another issue pertaining to greenwashing is the point of origin for products in a given segment. Mark Madrack, senior vice president of Sales/Private Label with The Sofidel Group, noted that some retailers overlook the high CO2 impact related to products being manufactured overseas and shipped to the United States.
“When a product has sustainability claims, sometimes consumers and retailers don’t consider the entire supply chain,” he said. “Some of these products get labels that are not checked and sometimes may even be fake. With that said, we understand that going into detail (about sustainability claims) is difficult and confusing.”
While there continues to be a certain level of confusion with all parties involved, finding greater clarity remains a major challenge. Some feel there needs to be greater continuity among governments. States including California, Washington and Maryland have passed laws in an effort to enhance sustainability efforts and. help consumers better understand claims on packaging.
But experts say there remains a long way to go with most states not discussing this issue of greenwashing, much less working to develop legislation, and few have hope of the federal government tackling the issue, given the divisive political climate in the nation’s capital.
However, some experts encourage retailers to become more involved in pushing government efforts to develop laws pertaining to greenwashing and sustainability overall.
“When governmental agencies are looking to develop or rewrite guidelines, this is an opportunity for retailers to have a seat at the table and help influence the decision being made,” said Christine Miklosko, packaging solutions strategist with Quad. “This will allow them to figure out what the new rules mean and help them long term.”
The route that has been easier for many is working with third-party certifiers, such as Fair Trade USA, that have developed strong sustainability standards related to a variety of issues.
“We have seen the issue of sustainability evolve over the years and now consumers are more aware and holding retailers and product suppliers to higher expectations,” said Abby Ayers, senior director of Retail Partners with Fair Trade USA. “And when we talk about greenwashing, it remains a challenging issue for most retailers and brands.”
Within the private label segment, any environmental-positive claims made by products fall to retailers, as their brands are on the packaging. As the work to avoid accidental greenwashing continues, Ayers said there are several steps retailers can take that are not difficult.
For example, if a retailer is carrying a full line of baking products, she suggests making individual claims on each item and avoiding blanket statements that may not be true for every SKU in the assortment. Additionally, she encourages retailers and product suppliers to work with third-party certifiers to ensure that all claims being made are accurate.
“We are happy to see that most retailers and product suppliers are bringing Fair Trade and other certifiers to the table to help substantiate claims they are looking to make,” she said. “We offer an understanding of how to talk about certain issues and help them avoid any legal risks.”
Sofidel’s Madrack noted that working with third-party certifiers has had a positive impact on the company and led to accolades for its efforts pertaining to sustainability.
“We’ve heavily invested in third-party certifications to prioritize transparency,” he said. “As a result, Sofidel is consistently ranked as one of the most sustainable companies in the paper industry according to CDP and EcoVadis. In 2022, Morningstar Sustainalytics ranked Sofidel as the top company in the Household Products category.”
Additionally, Sofidel uses 100% certified pulp for its paper products, such as those verified by the Forest Stewardship Council.
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Mark Madrack, Sofidel -
Dawn Nowicki, MRP Solutions -
Christine Miklosko, Quad -
Abby Ayers, Fair Trade USA -
Susan Thoman, Compost Manufacturing Alliance (CMA)
Expert Advice to Avoid Greenwashing Issues
For retailers, avoiding greenwashing remains a challenge, and beyond not intentionally making false claims, industry experts offered advice on how to ensure claims being made are accurate.
“I think it’s important for companies to stay in their lane,” said Susan Thoman, principal and managing director with the Compost Manufacturing Alliance. “There are many organizations that have great tools and information designed to help make sure claims are accurate. In addition, these organizations know how the system works and make sure suppliers and retailers avoid mistakes.”
Christine Miklosko, packaging solutions strategist with Quad, said, “Develop a road map that outlines the organization’s priorities. It’s important to note that while a company may have a number of things it wants to do related to sustainability, they can’t do everything at once.”
Abby Ayers, senior director of Retail Partners with Fair Trade USA, offered, “Working with a third-party verification company provides a good understanding of the issues. We can show retailers how to talk and not talk about certain topics. And, we also work to ensure that all claims are verifi able.”
Mark Madrack, senior vice president of Sales/Private Label with The Sofidel Group, added, “It’s important for retail leaders to educate themselves on a product’s entire supply chain and ensure they’re engaging with products that can back up sustainability claims. Listening to experts, attending sustainability conferences and ultimately asking questions will allow retail leaders build awareness of this topic. This requires time and dedication, but ultimately will help the planet in the long run.”
Sustainability's Influence on Purchases Grows
Consumers are continuing to become increasingly conscious of sustainability, and are looking for ways to make a difference with their spending habits, according to a recent report by NIQ, formerly NeilsenIQ.
The consumer data firm’s recent report “The Changing Climate of Sustainability” showed that 69% of those surveyed said sustainability has become more important to them over the past two years, citing an increase in information on the topic (48%), as well as personally experiencing the effects of climate change (47%).
At two recent industry events, Sherry Frey, VP of Total Wellness at NIQ, spoke about consumers’ willingness to support brands and products that they believe are making a positive impact on people and the planet.
“Half of consumers are saying it’s [sustainability] very important to them, and if you think about it, retail is the space where we’ve seen early indicators of sustainability,” Frey said during a presentation at the National Grocers Association’s 2023 Show in Las Vegas. “This is the space on a day-in and day-out basis that consumers are showing us their values. They’re buying their values. It’s certainly easier to show your support for sustainability on your grocery store visit than it is to rewire your garage and buy an electric car.”
When it comes to leading the charge against climate change, pollution, waste and more, consumers are expecting more from brands. Of those surveyed in the NIQ report, 46% said that brands should be most responsible for progress on sustainability, topping local governments (39%) and consumers (38%).
“There’s an escalating consumer demand: consumers are saying ‘we want more, we care more’ about sustainability,” she added. “They [consumers] tell us they’re hearing about it more in the media, so it’s become front of mind for them. We anticipate this to be one of the major trends to impact businesses dramatically over the next five years.”
Brands, including private labels, have already begun to see consumers gravitate towards products that make sustainability claims. According to NIQ sales data presented at Natural Products Expo West, of the products that made sustainable claims, including ethically farmed or harvested, organic, non-GMO and more, private brands were among the most popular.
“The brands that performed the best, sustainable attributes versus not, were private labels,” said Steve Noble, senior partner at McKinsey & Company. “More than 80% of private label products performed better with a sustainability claim versus not. It’s not just about value, it’s about the consumer defining value beyond price. It’s what they’re getting for the product, and sustainability does make a difference.”
With 41% of surveyed consumers citing price as the largest factor for them not adopting a more sustainable lifestyle, shoppers are increasingly looking for products they feel good about purchasing that also offer strong price/value.
“The products that did not have any of these [sustainability] claims grew 4.7% per year,” added Noble. “Products that did have these claims grew at almost 6.5%. It doesn’t mean that it happens for every product or category, but on average, sustainability can have a positive impact on growth.”
Going forward, Frey added that sustainable private label products will also help build loyalty in an increasingly fragmented grocery market, especially on the heels of a record-setting 2022 for private label.
“As these claims become more mainstream in your category, that opportunity declines, but what we recommend more is paying attention to the loyalty that these claims are making from a consumer perspective,” Frey said. “There’s a higher level of repeat [purchasing] for products that make those ESG claims.”