How construction can avoid allegations of ‘greenwashing’

Companies in the construction sector must do more to avoid allegations of ‘greenwashing’ or face financial penalties, a leading classification society has warned.

Bureau Veritas, a company which specialises in testing, inspection and certification in the building and infrastructure sector, warned company bosses that a new spate of laws in Europe and the UK aimed at outlawing corporate greenwashing are set to make it easier for government watchdogs to crack down on companies publishing misleading information which may persuade the public that an organisation’s products, services, aims and policies are more environmentally friendly than they are.

What is greenwashing? 

The organisation has published a guide to understanding green claims.

The French Climate and Resilience law came into effect in January 2023 which requires firms to provide annual details of the carbon pollution associated with a products entire life cycle if it is advertised as having net zero emissions.

Protestors in Madrid demand an end to greenwashing at an event to coincide with the 27th UN Conference on Climate Change (Cop27). Photo: Reuters/Luis Soto

The European Union’s proposed amendments to the Unfair Commercial Practices Directive also aims to clamp down on companies promoting their products as “climate neutral” or “containing recycled materials” if such labels are not substantiated. EU countries would have to ensure environmental claims are proven against a science-based methodology such as a “product environmental footprint” framework that tracks environmental impacts across 16 categories.

And, in the UK, a new Digital Markets Competition and Consumer Bill, first announced in April 2022, imposes fines of up to 10% of a company’s global turnover and of up to £300,000 ($358,000) for individuals for companies which intentionally mislead consumers over their green initiatives.

“Green claims don’t have to be intentionally misleading to be labelled as greenwashing and in today’s fast moving business communications environment, the risk of conveying uncontrolled or unintentional misinformation, is high,” said Christopher Jockel, principal sustainability consultant at Bureau Veritas.

“Intense scrutiny and action against greenwashing is escalating worldwide, putting organisations and their leaders on notice regarding overstatements or misleading claims and incurring potential reputation and regulatory risk.”

In December, an International Construction survey of the sustainability reports produced by a selection of 50 of the world’s biggest contractors, construction equipment OEMs and rental companies found that nearly all of them had made some sort of commitment to reducing emissions and improving their impact on the environment but that less than half of those surveyed had had their targets verified by the independently verified Science Based Targets initiative.

Governments around the world are under increasing pressure to tighten the rules preventing corporate greenwashing as scrutiny increases from consumers and investors.

COP27 and greenwashing 

At last year’s COP27 Climate Change conference in Sharm el-Sheikh, UN Secretary General António Guterres published a report criticising both greenwashing a weak net-zero pledges.

In 2020, a European Commission survey of 150 products’ environmental characteristics found that 53% gave only “vague, misleading and unfounded information.”

The UK Competition and Markets Authority - the competition regulator in United Kingdom - coordinated a global review of randomly selected websites and discovered that 40% of green claims made online could be misleading consumers.

Jockel announced that Bureau Veritas has launched a webinar and downloadable guide to understanding green claims in order to help firms “navigate the myriad of intricacies surrounding greenwashing.”

“The benefits for businesses who successfully manage their Green Claims, are considerable,” he said. “Not only will they reduce the risk of reputational and financial impacts, but companies can gain a competitive edge and in turn, increase customer retention, while building confidence in the information provided to customers, stakeholders and investors.”