Nearly a quarter (23%) of Brits spent less money with household brands accused of greenwashing last year, according to industry-leading research, measurement, and evaluation consultancy, Sensu Insight.
The 50 Shades of Greenwashing report found that Brits are becoming more sceptical to businesses’ ESG claims, with over a third (34%) saying they’ve recently seen organisations claim to be ‘sustainable’ without any facts, figures, or evidence to justify the claim.
The unfounded claims are having a damaging impact on business reputation, with many organisations suffering financial loss as a result.
According to the research, 9% of consumers admitted to boycotting a brand entirely and 11% now deliberately shop with a competitor after seeing a brand accused of greenwashing.
These impacts are being felt across a wide number of organisations.
When 1,000 UK employees were asked if their organisation has suffered from accusations of greenwashing, nearly a quarter (23%) said that they had. 13% of employees stated that their employer has suffered from multiple reputational crises because of greenwashing, resulting in negative reviews (15%) and customer complaints (12%).
Additionally, greenwashing was shown to impact a business’ ability to attract and retain talent. 17% of people said they’d be less likely to work for a brand accused of it, and 6% of businesses reported increased difficulty hiring talented staff as a result.
Steve Leigh, managing director at Sensu Insight, commented: “Commenting on ESG issues, can feel like walking a tightrope. Evidently, organisations that fail to be transparent and evidenced-based when making claims can suffer from reputational damage and financial losses.
“Effective communications around genuine ESG efforts are key to getting the public on your side. While it can be tempting to avoid challenging topics where actions will be scrutinised and open to criticism, questions on ESG matters are unavoidable. It’s much better to proactively engage and manage brand profile on such issues.
“This is where transparency and consistency are valued. Admitting to imperfections or where there is room for improvement can gain public acceptance and understanding.
“Tracking audience response to your brand and its ESG policies is critical to understanding how these are being perceived. Social listening gives valuable insight into how you are being seen and talked about. This greater understanding means you can remain ahead of the evolving demands and issues that your ESG programme will be expected to incorporate.
“Without taking considered steps to communicate and monitor an ESG strategy, organisations are risking real financial and reputational loss. Considering the current economic climate, can a business really afford to take the chance?”