As the executive decision was made to be a fully sustainable business, one of our founders struggled. Not only did it mean a significant amount of extra work to be done (the trimming of suppliers and the investigation on greenwashing of products), but ABOVE ALL… What does it mean to be sustainable? Such a broad concept and so open to interpretation. Sustainability seems like one of those words that you hear on a “Learn How to be an Entrepreneur” Instagram course, except instead of posing next to a rented lambo, the “entrepreneur” is selling the course from a forest? The founder sighed. Such a buzzword, and one who is constantly clashing with, well, profitability.
Who can tell us that we are 100% sustainable? Are there any actual guidelines? Is there an actual universal definition of sustainable that all businesses can get behind and use? So, the founder bought a book, asked ChatGPT, and deep-dived into due diligence. After all, an executive decision was made.
Sustainable Development has now substituted the more broad and general scope of the definition of sustainable. It seems the biggest issue on this is transparency, data availability, disclosure, and, well, reporting metrics. After all, look at Zara and H&M, which have faced criticism for greenwashing despite their publicized sustainability efforts. Greenwashing is when companies mislead consumers regarding their environmental practices or benefits, presenting an eco-friendly image that doesn't hold up under scrutiny.
Greenwashing: A Persistent Problem
Greenwashing undermines genuine sustainability efforts by creating confusion and mistrust among consumers. Companies may use vague terms, misleading claims, or incomplete data to present themselves as more environmentally friendly than they actually are.This practice not only deceives consumers but also hampers the progress of truly sustainable businesses.
Examples of greenwashing include:
- False Claims: Marketing products as "green" or "eco-friendly" without substantial evidence.
- Selective Disclosure: Highlighting a few green attributes while ignoring broader negative impacts.
- Lack of Transparency: Providing limited or no data on sustainability efforts and impacts.
Sounds familiar, right?
To fight greenwashing and genuinely prove sustainability, businesses need clear, consistent, and transparent methods of measurement and reporting.
Here some examples of Greenwashing:
Uniqlo
Uniqlo has faced scrutiny for its vague sustainability claims, particularly regarding its "RE.UNIQLO" initiative. This program promotes the recycling of old clothes into new ones, which sounds promising. However, critics argue that Uniqlo provides limited data on the actual environmental impact and the extent of the recycling program. The lack of transparency and measurable outcomes has led to suspicions of greenwashing. Sources like The Sustainable Agency and Earth.Org highlight that without detailed reporting and verifiable metrics, such initiatives can be more about marketing than meaningful environmental action.
Thinx
Thinx, known for its period underwear, marketed its products as "free of harmful chemicals," "safe and sustainable," "organic," and free of "toxic metals or engineered nanoparticles." However, a class-action lawsuit filed in 2022 alleged that the underwear contained PFAS (per- and polyfluoroalkyl substances) and silver nanoparticles, leading to a $5 million settlement in early 2023. This case highlighted the discrepancy between Thinx's marketing claims and the actual composition of their products.
PepsiCo
In November 2023, the New York Attorney General filed a lawsuit against PepsiCo for contributing significantly to plastic pollution in the Buffalo River. PepsiCo was accused of misleadingly portraying its plastic packaging as infinitely recyclable and overstating its progress towards reducing plastic production. Despite their claims of sustainability, a significant portion of the plastic waste collected from the Buffalo River was found to be from PepsiCo products. This legal action underscores the gap between PepsiCo's public sustainability commitments and its actual environmental impact.
For further information on these cases, you can refer to sources like Greenwash.com, Earth.com and Food Politics.
Measuring Sustainability
Measuring sustainability involves assessing a company's environmental, social, and governance (ESG) practices using various metrics and frameworks. These measurements help determine how well a company is performing in terms of sustainability and where improvements can be made. Here are some of the key methods and tools used to measure sustainability (now here things get a little bit more technical, but I need you to bear with me):
ESG Metrics
Environmental Metrics
- Carbon Footprint: Measures the total greenhouse gas emissions caused by a company, usually expressed in equivalent tons of carbon dioxide (CO2e) (EPA).
- Energy Consumption: Tracks the amount of energy used by the company and the sources of this energy (renewable vs. non-renewable) (EA).
- Water Usage: Monitors the total water consumed in operations and efforts to reduce it (UN Water).
- Waste Management: Assesses the amount of waste generated and the efficiency of waste reduction and recycling programs (EPA).
Social Metrics
- Employee Welfare: Includes metrics on employee health and safety, benefits, and job satisfaction (ILO).
- Diversity and Inclusion: Measures the representation of different genders, ethnicities, and other groups within the company (McKinsey).
- Community Engagement: Evaluates the company’s contributions to and relationships with local communities, including philanthropic efforts (Harvard Business Review).
Governance Metrics
- Board Diversity: Looks at the composition of the board of directors in terms of gender, ethnicity, and expertise (Deloitte).
- Ethical Practices: Assesses the company’s adherence to ethical standards, including anti-corruption measures (Transparency International).
- Transparency: Measures the extent and quality of the company’s disclosures on financial and non-financial information (Global Reporting Initiative).
There are also 10 main institutions with a finger on the pulse of sustainability. The founder put it on a table, so it is easier to compare, and you don’t give up on this post:
Name | Description |
United Nations Environment Programme (UNEP) | Sets the global environmental agenda and promotes sustainable practices. |
World Business Council for Sustainable Development (WBCSD) | A CEO-led organization that encourages businesses to adopt sustainable practices. |
Global Reporting Initiative (GRI) | Provides a framework for businesses to report their environmental and social impacts. |
Sustainability Accounting Standards Board (SASB) | Develops standards to guide businesses in disclosing sustainability-related information to investors. |
International Finance Corporation (IFC) | Focuses on building sustainable private sectors in developing countries. |
Carbon Disclosure Project (CDP) | Offers a global system for companies to manage and disclose their environmental impacts. |
The Ellen MacArthur Foundation | Promotes the circular economy as a key element of sustainability for businesses. |
International Institute for Sustainable Development (IISD) | Influences businesses and governments in sustainable development practices. |
Global Sustainable Investment Alliance (GSIA) | Monitors and reports on sustainable and responsible investment practices worldwide. |
Principles for Responsible Investment (PRI) | Provides a framework for implementing responsible investment practices, considering ESG factors. |
While certifications are not strictly necessary to claim sustainability, they offer significant advantages in terms of credibility, transparency, and competitive edge. However, understanding that new and small businesses may not be able to invest in certifications due to their high cost is crucial. Therefore, there are ways that businesses can prove their sustainability efforts both with and without certifications. Let’s dive in!
1. Clear and Transparent Reporting
- Use frameworks like the Global Reporting Initiative (GRI) or the Sustainability Accounting Standards Board (SASB) to prepare and publish comprehensive sustainability reports.
- Disclose specific metrics such as carbon footprint, energy usage, waste reduction, and social initiatives.
2. Supply Chain Management
- Ensure that your suppliers and partners adhere to sustainable practices.
- Conduct regular assessments and audits of your supply chain to ensure compliance with environmental and social standards. Transparent supply chain practices can strengthen your sustainability claims.
3. Customer and Community Engagement
- Engage with customers and local communities to highlight your sustainability efforts and receive feedback. Participating in or supporting community sustainability projects can also demonstrate your commitment.
4. Industry Recognition
- Participate in industry-specific sustainability initiatives and awards. Recognition from industry bodies can provide informal validation of your efforts.
Conclusion
Understanding and implementing sustainability in business is a multifaceted challenge that requires dedication, transparency, and continual improvement. As seen through the efforts and struggles of both founders, sustainability is more than just a trendy and vague term: it involves a comprehensive approach to environmental, social, and governance (ESG) factors. It’s not just about making claims, but about proving them through clear, consistent, and transparent methods of measurement and reporting.
Greenwashing remains a persistent problem, undermining genuine sustainability efforts and creating confusion among consumers. Companies must go beyond vague terms and misleading claims, ensuring that their sustainability initiatives are backed by substantial evidence and measurable outcomes. By looking at examples like Uniqlo, Thinx, and PepsiCo, it becomes evident that transparency and accountability are crucial in maintaining consumer trust and making real environmental impacts.
To truly measure and improve sustainability, businesses can utilize ESG metrics and frameworks provided by reputable institutions. While certifications can enhance credibility, small and new businesses, like House of Marbel, can also demonstrate their commitment through transparent reporting, rigorous supply chain management, and active engagement with customers and communities .
Ultimately, the journey towards sustainability is ongoing. It requires businesses to be adaptive, informed, and committed to genuine practices that benefit not only the environment but also society and their bottom line. By embracing this holistic approach, businesses can contribute to a more sustainable future and inspire others to follow.