Ironing out eco-label claims in fashion

Steve Ponting at Software AG UK&I describes how fashion brands and retailers need to go further to address greenwashing concerns

 

The fashion industry is under fire for its approach to sustainability. When marketing products as ‘eco-friendly’ or ‘sustainable’, it can be difficult for retailers to prove credentials – and for consumers to believe. Often, they are right to be cautious.

 

Greenwashing is the new trend for fashion retailers, regularly facing scrutiny over their allegedly ‘sustainable’ products or business practices. From materials to water consumption to transportation of products, the fashion industry is completely unregulated when it comes to sustainability claims, and risks undermining many green initiatives altogether.

 

Quick to call out issues surrounding a brand’s eco-claims on social media, consumers are quickly getting wise to greenwashing. And when retailers capitalise on the price premium and image benefits of ‘going green’, but don’t have the data to back up their claims, they can incur lasting damage to their brand – even when they are putting in the work.

 

The only way to prove how seriously businesses take their sustainability goals and win back consumer trust is to substantiate claims with reliable, accurate data and transparent processes.

 

Brands can’t rest on their laurels

There is currently no legal term for sustainability and businesses are only advised to not mislead their customers. The government’s Competition and Markets Authority (CMA) can take action on brands for false advertising, yet, 82% of businesses admit that they would accept regulatory penalties to avoid taking on sustainability initiatives. Clearly, there are few consequences when brands get it wrong - but little guidance on how to do it right. 

 

For instance, new hopes for EU greenwashing rules have been squashed after businesses lobbied to water down the proposals. Now, regulations are so vague that it is unlikely that they will make a substantial impact and inadequate ESG benchmarking in sustainable investments gives little clarity on where retailers should act. Legally, fashion brands can continue to make misleading claims about their products being eco-friendly or carbon neutral.

 

However, it only takes one accusation of greenwashing to impact brand credibility and convince a customer to go elsewhere. Consumers increasingly want truly sustainable options and almost all business leaders (95%) agree sustainability is a high priority. With the rising popularity of sites such as Good on You and Feefo’s new venture Ethy, consumers are going even further to research retailers and ensure that brands are living up to their word.

 

Retailers cannot afford to wait around for new regulations. They need to take matters into their own hands and prove the credentials they put on products - or risk losing their customers for good.

 

It’s more than a material issue

When a retailer chooses to brand a product as ‘sustainable’, ‘recycled’ or ‘green’, what does this actually mean? Often these broad claims only cover the materials of a garment, and it can be hard to spot the difference between real and fake messages – especially when ‘made from recycled materials’ could mean they constitute as low as 1% of the end-product.

 

Generally, the vaguer the claim, the more likely its greenwashing.

 

Besides materials, what about where and how products are shipped? How much water is used, and waste is created in the manufacturing process? How many carbon emissions are produced over the product’s end-to-end journey? And what about the product packaging and in-store practices? Most brands have strong sustainability initiatives in place and are making great strides in these areas - yet find this work difficult to prove.

 

Company-wide environmental, social, and governance (ESG) data can help to tell a brand’s sustainability story. When businesses can assess all the processes that contribute to a product’s lifecycle, they can target areas of improvement and prove the good work that they are doing.

 

Visibility proves eco-credentials

As leader in sustainable retail Tonje Drevland states, wrong data is worse than no data. No company falls into a greenwashing scandal on purpose. But if they provide inaccurate data, are unable to meet targets or follow through on promises, consumers and investors are more likely to jump ship.  

 

Green business process management enables retailers to dig into their existing operations and allows leaders to better understand, document, execute, and continuously improve processes. For instance, 28% of organisations state that data integration has had a significant positive impact on their sustainability efforts. 

 

By gathering accurate and reliable ESG data, retailers can make more informed decisions and track progress across all business goals, including sustainability. Leaders can create a sustainability dashboard, create reprints, and carry out analysis to understand how initiatives are impacting on their credentials.

 

Process mining goes one step further, ensuring that actions are in line with a brand’s eco-policies and highlighting where optimisation is required.

 

While regulations are in their early stages, more will likely come to clamp down on  unfounded eco-claims. Whilst most brands have the best intentions, failure to meet targets or back up their good work can leave them open to accusations of greenwashing. 

 

Ultimately, if retailers want to shout about their sustainability credentials and avoid falling into the greenwashing trap, they need to ensure they have control and visibility of a product’s lifecycle and supply chain end-to-end.

 

Empowered by technology, reliable data, and improved processes, brands can elevate their approach to sustainability and cut through the generic ‘green’ noise – able to make impactful, truthful statements that are substantiated with data.

 

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Steve Ponting is Director at Software AG UK&I

 

Main image courtesy of iStockPhoto.com