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54% of Customers Ready to Abandon Greenwashing Companies but Awareness Remains Low; Finds KPMG

Over half (54 per cent) of consumers in the UK will stop buying from a company if they were found to have been misleading in their sustainability claims, new research from KPMG has revealed.

KPMG UK surveyed over 2,000 UK adults to better understand their thoughts around green and sustainable products and technologies to understand how they influence decisions, and whether misleading practices, such as greenwashing were having an impact.

The findings highlight that consumers widely recognise greenwashing, with 45 per cent stating they are aware of the term, with words such as fake, lying, exaggerating, dubious, and misleading all commonly used unprompted to explain what the term is.

Seventy-six per cent of respondents agreed that false or misleading claims about the sustainability of specific products were the clearest example of greenwashing.

Other popular examples of what consumers believe to constitute greenwashing are:

  • Exaggerated or unsubstantiated sustainability credentials (73 per cent)
  • Misleading commitments on net zero (66 per cent)
  • Inconsistent ethical policies (60 per cent)
  • Missing sustainability targets (39 per cent)

Eighteen per cent are also already voting with their feet and say they have changed their mind about a company due to misleading green claims. This was even more prevalent in the capital where 25 per cent of Londoners say they have done this. Fifty-four per cent stated that they would stop buying products and services from companies found to have greenwashed, with 38 per cent also saying they would stop investing in them.

Customer intentions are good, but awareness is low
Richard Andrews, head of ESG at KPMG
Richard Andrews, head of ESG at KPMG

Richard Andrews, head of ESG at KPMG in the UK, said: “Companies keen to capitalise on the growing interest in sustainable products, should be taking a measured approach; overselling sustainability credentials risks losing customers as well as the reputational damage that will follow.

“While this might often be unintentional, understanding the data behind any sustainability claims is key, as well as ensuring that data has also been verified if brands are serious about avoiding any greenwashing risks.”

The research highlights that many consumers care about the sustainability of items. Sixty-seven per cent say that they try to seek out green or sustainable options for some of the products and services they buy. However, 33 per cent of respondents said they were sceptical of green labels and sustainability claims, while 28 per cent admitted to struggling to know what products were green or sustainable due to inconsistent labelling.

When asked which sustainability labels consumers recognised, for many awareness remains very low. Established marks like Fairtrade (73 per cent) and Rainforest Alliance Certified (44 per cent) had the greatest awareness among respondents, while initiatives like the carbon reduction label (nine per cent), B Corp (10 per cent) and Better Cotton Initiative (nine per cent) all scored low on consumer awareness.

Guilty of greenwashing?

Consumers see the energy sector (58 per cent) as the most likely to engage in greenwashing, with the fashion industry closely following (57 per cent). However, younger respondents (18 to 24-year-olds) actually deem the fashion industry as the most likely to greenwash (66 per cent) and are slightly more positive about the energy sector (50 per cent). Consumers also think that transport and automotive (51 per cent) and grocery, food and agriculture (47 per cent) are industries likely to greenwash.

Andrews concluded: “The results present a catch-22 situation for both companies and their customers. On the one hand, customers are prepared to stop buying something if it has been linked to greenwashing, but they also admit that they struggle to navigate the labels currently out in the market. Meanwhile, companies are investing time and money verifying their efforts, but awareness of some of the environmental accreditation schemes remains very low.

“What is clear, is that any signs of greenwashing will diminish trust further, so it is imperative that companies continue to ensure all claims can be evidenced and that as new regulations are introduced, they are understood and adhered to. The risks of overselling being ‘greener than green’ are too high.”

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