We are thrilled to introduce Tunku Alizakri Alias, former CEO of EPF Malaysia as this month’s contributor to our sustainability pillar. This month he tells us not to Greenwash and how.
Remember, green is the new black!
—Kassandra Kassim, Editor in Chief
Recently, more and more companies have been caught indulging in Greenwashing and when discovered, will be seen as insincere, hypocritical and opportunistic. It will take many years (if at all) before the stain of Greenwashing on the brand will come out.
Unfortunately, products and advertisements claiming to be ‘Better for the Planet’ or ‘100% Sustainable’ are cropping up on an everyday basis. In a world of social media and with information at your fingertips, these claims can either be verified with a few taps of the screen. It was reported SC Johnson’s “100% Recycled Ocean Plastic Bottle” was sourced from landed plastic banks. J&J’s timing of (re)introducing darker coloured bandages just after the BLM movement was also viewed with narrowed eyes when a similar product was discontinued in 2005 due to ‘lack of interest’. The 2015 Volkswagen scandal, of installing ‘defeat devices’ in 11 million of its cars to pass tests and maintain the low emissions claims, is still haunting the brand to this day.
When incorporating sustainability into branding and marketing, great care must be taken. No matter how well intentioned or advanced a company is, any claims of saintliness are impossible, as every product made or services given in every sector has some form of negative impact on the planet. Green businesses are not zero impact; it just helps lessen the impact to the world.
You need two things to avoid falling into the Greenwashing trap:
Authenticity, i.e. genuine belief in sustainability forming the core of the business:
Set up a dedicated sustainability team headed by as senior a person as possible. This crucial first step is often overlooked as this function is sometimes wrongly parked under marketing or communications. Sustainability requires a radical transformation of the entire organisation supported by a team with actual executive powers and authority to enable it.
1. Find personally resonating reasons on why sustainability is pursued without sacrificing the business objectives. Understanding the strong purpose of sustainability is critical, especially in the early stages of the journey.
2. Own your sins as everything an organisation does will have an environmental impact. As long as power or natural resources are consumed, there is an impact. Stakeholders will be satisfied when companies acknowledge this with real commitments to do something about it.
3. Tie the CEO and/or senior management KPIs to sustainability, monitored at Board level. The Board itself needs to ensure appropriate ESG oversight is spread across the different committees, especially audit, remunerations and nominations.
4. Focus on internal communications as your people must be living ambassadors of the organisation’s sustainability ambitions.
5. Implement and invest in real sustainability transformation projects that take courage and challenge the status quo. These must demonstrate real value to the business (e.g. revenue increase, cost reduction and/or risk avoidance) with plausible returns horizons. The budgeting mindset must be about how much to invest rather than how much it will cost. An interesting example is the Mattel Playback program where old toys are returned (postage is paid by the company) and recycled into or reused for new products.
Credibility, i.e. expertise / know how:
1. Before establishing your sustainability ambitions, you could use recognised (global) frameworks that are relevant and aligned with the business as a starting guide. A good resource is the UN Sustainable Development Goals, e.g. Hilton hotels which adopted SDG11: Sustainable Cities and Communities and LEGO with SDG4: Ensuring Quality Education and Lifelong Learning. Other sources could also be the UNPRI, SASB, TCFD and GRI. If your sector is not covered, work with other industry players to establish one such as the RSPO for Palm Oil.
2. Communicate sustainability ambitions that are in sync with where you are in your journey and not merely following the PR trends. If you are a newcomer, start off with a modest ambition and short-term targets like ‘Achieving Low Carbon Emissions with a reduction of 20% within 3 years’. Once you understand more about what is needed, you can explore Net Zero Energy or even Carbon Neutral Status in the midterm and Net Zero Emissions or Carbon Positive in the long term. Be cautious in carbon trading practices as this is not acceptable in some circles.
3. Targets must be science-based and quantifiable with a thorough study to identify potential areas of concern and / or opportunity. Know exactly where and how much your GHG emissions are in all areas, both up and downstream your value chain. A source base to help you here is the Science Based Targets Initiative.
4. Work with respected third parties to establish and verify your company’s sustainability standings such as RepRisk, Sustainalytics, and Refinitiv. If your company is large enough, you could even track how well you are doing via sustainability indices under FTSE4Good, DJ Sustainability Indices or Ethibel Sustainability Index.
5. Engage with respectable NGOs (be cautious, as there are irresponsible parties whose modus operandi is to create problems to justify continued funding). Be open and manage the ego when assessing their recommendations and remind yourself that it is all working towards a common good.
Being authentically credible will take a lot of effort and commitment. Results will not come overnight. You need a lot of perseverance and grit to make it happen, but the payback is potentially large. If in doubt whether you are greenwashing or not, go back to marketing basics and concentrate on the core product and/or service value proposition, e.g. tastes better or cleans faster. Take out sustainability claims as the main feature in any front-page marketing or branding activities and ensure that proof of green efforts is readily available. Being successful here will win you a legion of committed customers aligned with your purpose in making the world a better place.