Back in 2020, Eni was fined €5 million for deceiving consumers on its “green” diesel. And as the 2022 German police raid on Deutsche Bank’s DWS proved, there is potentially much more money to be lost. In 2023, we expect at least 10 companies to incur $5 million or more in greenwashing fines. This is especially true in Europe for two main reasons:
- European consumers demand more transparency and are more likely to distrust brands’ communications on climate change. Only 30% of online European consumers (and down to 24% and 25% of Dutch and Swedish consumers, respectively) trust companies when they say that they will commit to reducing climate change. Fifty percent of European consumers (and up to 53% and 57% of French and Dutch consumers, respectively) agree that brands tend to mislead consumers when communicating their environmental initiatives.
- Empowered watchdogs such as the UK’s Competition and Markets Authority that are willing to enforce consumer law will increase, significantly pushing regulators to crack down on greenwashing. In 2021, the European Commission found that half of green claims lacked evidence.
Indeed, let’s be clear that the fines are just a harbinger of more critical business risks, such as significant market valuation loss and employee and customer disengagement.
To avoid greenwashing, Forrester recommends that CMOs actively create sustainability communication messages with integrity. Climate change is increasingly becoming a top priority for many CEOs who understand that it is not just a compliance or a risk issue but also a significant opportunity to differentiate and transform their organisations. In Europe, environmental sustainability also offers new opportunities — driving the green transformation agenda.
Learn more about how companies around the world will respond to the environmental sustainability imperative in our inaugural environmental sustainability Predictions report (client access only). And explore our European Predictions 2023 hub to delve into the forces that will shape the business landscape in Europe in the year ahead.
If you would like more guidance in crafting an authentic sustainability strategy, please reach out.