Widespread public support for recent EU intervention to combat greenwashing

Compliance Institute Consumer Survey 11th April 2023

Widespread public support for recent EU intervention to combat greenwashing.

Date: 17th April 2023

The latest Compliance Institute survey has received extensive media coverage and is included in today’s The Irish Times (see below). The survey of over 1,000 people showed that there is widespread public support for a recent EU intervention to combat ‘greenwashing’ and almost four in ten (38pc) people are actively avoiding, or would avoid, buying the products of companies engaging in the practice.

Headline findings from the survey reveal that almost nine in ten (85pc) believe it was necessary for the EU to bring in a recent law - the Corporate Sustainability Reporting Directive (CSRD) – in order to tackle greenwashing. Under the CSRD, which came into law at the start of this year, EU companies must report in more detail, and therefore be more transparent, about the impact of their actions and policies on the environment, human rights and social standards. Women were found to be more strongly in favour of the CSRD as a tool to fight greenwashing than men, with 94pc of females saying the EU needed to introduce this law to tackle the practice versus 75pc of males.

The Compliance Institute survey also found that more than half (52pc) of people are aware of the practice of greenwashing, and that most (38pc) of these would avoid purchasing from companies which participate in it, with one in eight (12pc) actively doing so. Worryingly however, one in four respondents (26pc) felt that they would struggle to distinguish between companies that are greenwashing and those that are genuinely engaging in environmentally-friendly practices.

Other key findings from the survey include:

• Those over 55 are the most likely age cohort to support the introduction by the EU of the CSRD anti-greenwashing law, with 95pc of this age group in favour of the law, versus 72pc of those aged between the ages of 25 and 34, and a national average of 85pc.

• One in ten (10pc) said they “don’t care” about greenwashing, with those aged between 18 and 24 most likely to feel this way. One in three (33pc) of those aged between 18 and 24 said they didn’t care about greenwashing compared to only one in twenty (5pc) of those aged 55 plus.

• Those aged between 25 and 34 are the most likely not to purchase from companies partaking in greenwashing with one in four (25pc) of this age cohort saying they are very familiar with the practice and can recognise and actively avoid any company that participates in it.

• About one in seven (14pc) would not be swayed in their consumer choices even if they were aware that a company was greenwashing.

• Almost four in ten (37pc) people said that while they’re not aware of the term greenwashing, they’d like to learn more about it.

• Socio economic background has a big bearing on whether or not people know about greenwashing. More than four in ten (43pc) of the working class (C2DE category) said they are open to learning about the practice as they hadn’t come across it previously, compared to about three in ten (29pc) of the middle-class (ABC1 category). Similarly, 65pc of the middle class said they are aware of greenwashing compared to 42pc of the working class.

• It would appear that the older you are, the less likely you are to be familiar with greenwashing – just one in four (25pc) of those aged between 25 and 34 say they are unaware of the term but would like to know more about it, compared to 42pc of those aged 55 plus.

From: The Irish Times

Most Irish people support new laws clamping down on greenwashing, where businesses exaggerate or falsify environmental performance, a new study shows.

The EU has made environmental and social governance (ESG) reporting mandatory, obliging companies to demonstrate how they perform in these areas in accounts published every year.

A survey by the Compliance Institute shows that close to nine out of 10 Irish people support the law, the Corporate Sustainability Reporting Directive (CSRD).

It demands that EU companies report in more detail and more transparently about the impact their businesses have on the environment, human rights and social standards.

Officials have designed the new rules partly to end greenwashing, where companies present their businesses and products as environmentally friendly with no real basis for these claims. Businesses do this to win customers or attract investors, an increasing number of whom are likely to scrutinise a company’s ESG performance before backing it.

The Compliance Institute, made up of 3,500 professionals in the Republic, spanning law, accountancy, technology, risk management and other areas, found that 94pc of women and three out of four men support the directive’s aim.

Its study also found that 38pc of people “actively avoid” buying products made by companies thought to be greenwashing their businesses or activities. Younger people are more likely to do this, according to the survey of 1,000 people.

The study also found that people over the age of 55 are less aware of the problem.

More than half of Irish people are aware of the practice, however. In the study, one in four felt they would be able to distinguish between companies that are greenwashing and those that are not.

Michael Kavanagh, the Compliance Institute’s Chief Executive, noted that many companies’ “green” references were simply marketing rather than anything measurable.

“The widespread support for the recent intervention by the EU to combat greenwashing – through the CSRD – also suggests that there is very little public trust of companies when it comes to environmental promises or claims,” he said.

“It also appears that many consumers believe that companies may mislead them about their environmental track record in order to boost the company’s bottom line, unless higher authorities get involved to stamp out such practices.”

A recent study by law firm McCann Fitzgerald found that many businesses believed their rivals were greenwashing, while their own practices were good.