Avoiding Greenwashing Accusations Requires Cross-Functional Collaboration

As pressure mounts from investors, regulators and consumers, sustainability has
become a priority for businesses — especially within the CPG and wellness
industries. As more brands determine their sustainability goals, those efforts
should not be siloed to one department or simply summed up in one generalized
effort. Sustainability goals that allow for cross-functional collaboration allow
organizations to work together toward a common goal and make true progress.

The need for improvements that can be measured and continuously built upon has
never been more urgent. In the EU, the Green Claims
Directive
is asking brands to substantiate environmental claims in order to provide
consumers with more transparent and reliable information. Here in the US, the
Federal Trade Commission (FTC) is considering new updates to its Green
Guides for
the same purpose. What’s more, greenwashing
lawsuits
are increasing as more companies disclose — and fall short of — their
sustainability-related pledges or estimated timelines to reach net zero and
other stated goals.

In order to address these business challenges head on, brands need their teams
to work together — from manufacturing to the product-development teams to the
marketing department — towards achieving collective sustainability goals and
effectively communicating them.

Here are two tips from our sustainability journey in the wellness space.

Build a roadmap to prioritize improvements to on-site manufacturing

Product manufacturing is often one of the most significant areas of many brands’
environmental footprint; yet it can also be the most difficult in which to enact
changes due to costly equipment improvements, job training and required on-site
operational changes. Prioritizing sustainable shifts in
manufacturing
does not require an immediate overhaul — only a detailed look at business as
usual in order to identify where to go next. Ahead of equipment changes, brands
can look to environmental certifications that help begin the process of
measuring current impact, in order to understand where and how to improve.

The International Standards Organization (ISO) — an independent
organization that develops standards to ensure the quality, safety and
efficiency of products and services — offers a reliable starting point with
environmental certification programs. Specifically, its ISO
14001 provides the needed guidance on
setting environmental objectives and targets — in addition to audits,
communications, labeling and lifecycle analysis — all as it relates to
environmental challenges. These certifications require a manufacturing team to
work together to implement wide-scale changes that are measurable to ultimately
support on-pack marketing
claims
and public sustainability commitments. Annually, sustainability teams can meet
with product-manufacturing teams to continually measure and identify areas for
savings and impact across the business.

Identify opportunities to protect natural resources that support the business

Every consumer product utilizes natural resources in some capacity, especially
in the wellness industry. Brands often take ingredients directly from nature to
create products that deliver the nutrients that are abundant in the environment.

At Trace, our supplement company extracts
minerals from Utah’s Great Salt
Lake, and we take preservation
efforts seriously as more companies tap this natural resource for its abundant
and powerful minerals. An ecological wonder, the Great Salt Lake deeply impacts
the local environment — from bird migrations to plant life — not to mention the
local economy, where it provides almost 8,000 jobs in the state. As a private
business, we have a responsibility to ensure the largest saltwater lake in the
Western Hemisphere is cared for. Our team is vocal in support of local
legislation such as HB
453
— a bill that provides the needed regulatory oversight as to who can take
minerals and water from the lake, while protecting water levels from becoming
too low.

Brands can call upon their product procurement teams to take a closer look at
their sourcing practices and identify how they too can stand for the protection
of local environments that serve the business. When an organization financially
benefits from natural resources, dedicating efforts to ensure its preservation
serves the bottom line as well as its sustainability claims.

Misleading consumers on sustainability initiatives will not grow a business, and
the legal and reputational ramifications only reinforce that the exaggeration of
environmental claims will not deliver on ROI. Heads of sustainability can work
with teams across various departments to improve an organization’s efforts on
sustainability more holistically. With the strategy in hand, businesses can
bring teams together to initiate meaningful change that can be accurately
measured and thus promoted to their customers and shareholders.