S4 E10: The Green Claims Directive: Re-establishing Trust in Sustainability Communication with Martin Lucander

Adrian McIntyre: 00:00

From the Public Relations Global Network, this is PRGN Presents. I'm Adrian McIntyre.

Abbie Fink: 00:07

And I'm Abbie Fink, president of HMA Public Relations in Phoenix, Arizona and a founding member of PRGN. With public relations leaders embedded into the fabric of the communities we serve, clients hire our agencies for the local knowledge, expertise, and connections in markets spanning six continents across the world.

Adrian McIntyre: 00:28

Our guests on this biweekly podcast series are all members of the Public Relations Global Network. They discuss such topics as the importance of sustainability and Environmental, Social, and Governance programs, crisis communications, content marketing, reputation management, and outside of the box thinking for growing your business.

Abbie Fink: 00:48

For more information about PRGN and our members, please visit prgn.com. And now, let's meet our guest for this episode.

Martin Lucander: 00:59

Hi, I'm Martin Lucander, and I'm a partner and senior consultant at Aspekta. And we're located in the fine southern city of Malmö in Sweden, all the way up there north. So, Aspekta, we focus on a few areas, one being sustainability communications, investor relations. We started as a public affairs firm actually 30 years ago today we have progressed to other areas but mainly we do a lot of public relations work for companies to give you some sense of what I do is that I would sort of summarize my role at the specter to be that I help clients to find their message and role within sustainability I’ve had the opportunity to become the house nerd within this area, which pleases me a lot. But I'd like to also give my elevator pitch in terms of what I do when I tell my parents what I work with is that I create, build, develop and protect trust with the help of communications.

Abbie Fink: 02:02

Well, and I was going to pull that right out of your bio because I find that so fascinating. Sustainability communication as a core component of modern corporate trust building. And I think that's such an important, message, one to be, you know, supporting, but really that, that idea around trusting corporations, you know, we, we, we certainly understand the concept of trusting individuals. But I think consumers now are moving ever so quickly towards really watching and making decisions about the businesses they want to do business in and with, based on how they show up in our communities and how they show up on issues of importance. And certainly, sustainability has, you know, always has been, but is really at the forefront now. So can you share, Martin, a little bit more about, you know, really what that idea of sustainability communication and what it means, you know, to corporations, which we might typically think of as large businesses, but really all organizations, large or small, need to be thinking about that.

Martin Lucander: 03:12

Sustainability has been something of a theme for quite some time now. I mean, if you would like to go back pretty far back, you had the idea of corporate social responsibility. To me, that is an old term that is not that well equipped for the modern understanding of sustainability, which encapsulates so much more than this sort of social responsibility bit. But I'd like to say that what has happened really in the recent years, at least from a Swedish perspective or European, is that it is no longer a question if a company should take responsibility for certain things. It's more a question of how and to what extent.

And of course, if you look upon how, from a legal perspective, what responsibility entails, then you can really find a good narrow boundary for where your responsibility stops. But in the public tribunal, almost, you can say that that responsibility never ends. So that also in itself indicates the challenges with sustainability today, how far do you actually go to take responsibility for certain things? Are we talking first tier suppliers, second, third tier? It's difficult to say really, but the expectations are there among consumers, customers, investors, that the company should be aware of this responsibility and have a stance in how to take on that responsibility, how to work with that and so on.

Abbie Fink: 04:42

Well, and it's one thing to say, you know, we are socially responsible, we recognize the importance of the following items and do everything we can to, you know, ensure it. And then it's another thing to actually be able to demonstrate it, prove it, and show, not only internally to your employees, your other stakeholders, but externally to others that you are doing what you say you're doing. How do we evaluate that responsibility and really recognize if what they're saying is actually in fact what they're doing?

Martin Lucander: 05:24

Well that of course is very bang on the challenge today and why we have something called the Green Claims Directive and why it has so much needed in my opinion at least that we do haven't had any way or grounds to actually keep companies accountable to what they're saying I mean of course there might be the occasional crisis or issue that crops up in the media where one company would have been found to be go against something that they stated, and that of course it becomes embarrassing and of course an incredible difficult issue to handle for them and could affect stock prices and so on but really when we talk about the companies that most people have a relationship to, you don't actually have that sort of way of keeping them accountable to that. And that's why this type of directive, the Green Claims Directive is actually necessary for that.

Abbie Fink: 06:19

Can you talk a little bit more about what that is in particular and how it, you know, it is certainly something that is obviously been introduced in the EU. We're not, I suspect we'll start to see it or variations of it filter out into other countries as well. But talk a little bit, if you could, about what that is and maybe how it relates to, you know, what, again, businesses should be considering and how we're talking about, about you know and how as communicators we need to be aware of some of these you know regulations that are starting to come down about how we actually do communicate this particular type of information.

Martin Lucander: 06:57

Yeah I’d be happy to I could start with describing what it is and I mean we're not delving too much into EU theory one could say that there's you have the directives and you have regulations and what the key thing about a directive is that it's passed by the EU parliament and then it needs to be implemented into the national legislation of each member country and then it becomes sort of the full force of the law basically and this Green Claims Directive it's actually called substantiation and communication of explicit environmental claims but you can see why “green claims” is a catchier word there if we talk about what it seeks to achieve, it's quite clear when you read the language by the EU that it actually says that the current way companies have been using these environmental claims are misleading and deceiving consumers into making unsustainable choices.

And the way they use these claims have also caused a confusion that actually benefits unsustainable products and it weakens the demand for truly sustainable alternatives. Alternatives and that in itself also goes on to result in an unfair competitive situation that hampers the development and sale of these sustainable products so what the EU is doing is that using pretty strong language that really pits companies against consumers saying that companies they have a responsibility that they're not taking and what they're doing is that they have actually seriously hampering consumer ability to play a role in the green transition of economy consumers are actually limited or are left with outside this green transition and also more to the point of our business communications is that I mean the way that these terms and claims have been used is that they actually causes a wide distrust of the credibility of green claims generally and sustainability communication specifically so what you have here is essentially a ban on certain expressions, words, promises and so on. And then helps to and they seek to ensure that we have a better situation and better way to navigate the market.

Abbie Fink: 09:12

So for us here in the States, truth in advertising, what we say should be truthful and can be backed up by scientists, scientific information or data or wherever our points are. And we tend to rely on industry associations that have an ethics component, right? If we are a member, we agree to abide by, you know, the ethical standards, which dictate out our, you know, our, you know, our truth and our transparency and open and honest communication. But you all have gone as far as, you know, codifying that in a regulatory scenario. Who's checking on that? Who's making sure that what you are doing in your, you know, your green communications, your sustained communications is, in fact, the truth? And who is monitoring and managing other than, of course, ethical communicators that make sure we do it? But is there a place where that is being evaluated and monitored?

Martin Lucander: 10:19

Yeah, well, because it's a directive and it comes into national legislation, and it will start from 20 26, to be sure. And the way this directive is set up is that it seeks to establish in each member country, some state authority, either one existing or one that would be created for it, that would actually monitor this. So within the different rules that are posed by the directive, there will be a requirement for companies to actually submit any sort of explicit environmental claim they might seek to use, to submit that to this authority and get a response within 30 working days, whether they can use it or not. So it does actually create a bureaucratic load on the countries to actually go through these claims there.

Adrian McIntyre: 11:16

Martin, what you're talking about here is so fascinating to me because it touches on many issues that affect, well, everyone from the commercial viability of corporate and business interests to the regulatory environment, the way we govern ourselves, the way we set guidelines and guardrails for what you can and can't do. And then the public perception as consumers are making purchasing decisions, they want to buy this product or that product or whatever. And I'm just struck by how messy this is in actual practice. You just said that the explicit claims must be submitted. But what I'm thinking of now is what about all the implicit claims? And I'll give you an example of what I mean. Every beer commercial on television in the 1980s implied that if you drink this beer, you're going to be surrounded by gorgeous people, usually in the mountains on a ski vacation or something. In other words, this makes your life better, right? I'm using television as an example because it's visual, but, you know, a prescription medication and the visuals on the screen are a couple in their 70s or 80s walking on the beach with long flowing white shirts and a puppy. be. And of course, the medication is about something very specific, but the implicit claim is your lifestyle is going to be fabulous once you treat this condition with our medication. And then at the end, at least here in the United States, there would always be this very fast recitation of all of the warnings. You may be experiencing these awful conditions, right? And you're like, oh my God, that sounds terrible.

Abbie Fink: 12:50

But you're walking on the beach with your puppy.

Adrian McIntyre: 12:52

Right, exactly. So when it comes to sustainability, there are claims that are being made by visuals and by packaging and by positioning of the product. And not only, you know, I'm thinking again of healthcare, for example, where obviously you can't write on the bottle of an unregulated herbal supplement here in the United States that this will cure cancer, right? That's clearly not allowed by the Food and Drug Administration and the Federal Trade Commission, but you certainly can imply that this promotes vitality.

Martin Lucander: 13:25

Whatever that is.

Adrian McIntyre: 13:27

What does that even mean? Let's talk about that fuzzy gap in between your legal responsibility and public perception. There's a whole lot of messy middle there. And some of the claims there are implicit, not explicit. What are your thoughts about this?

Martin Lucander: 13:43

Well, I mean, it's interesting that you bring up the implicitness of these claims because, of course, you could imagine that what is being said or written in any commercial setting is something that you could possibly be penalized for. But what you show or what kind of music you play, of course, would send a different message entirely. Entirely now what I could say is that when it comes to the green claims director what they've actually done is that I because they've actually become quite specific about what you can and cannot do so if I just give you an example here that when they talk about these commercial messages.

They say that I mean what we're talking about a green claim is essentially that it's some sort of statement that promotes the product or the trader behind the product as being less harmful to the environment compared to other alternatives or that they have improved their environmental impacts in some way or they have a positive neutral impact. You know, that's a typical green claim. And what they say is that these green claims, they actually could take the form of either texts, images, graphics, or symbols. And that sort of captures a lot of that kind of wishy-washiness that you're on to there about the implicitness, that that means that in terms of symbols it would actually be a label carrying that you know worn out leaf of some sort it would be a name of being that you can see company name that is in green perhaps because that is essentially meant to convey something so you do have that kind of.

Stricter rules for that type of expressions there and then of course you come down to the actual wording that you become not a band per se but contentious in this sense that you need to provide, certain things and I could go into that as well I mean I could mention what we actually talk about what are the rules that we're saying here and to just give you an overview so the basic thing is that it the rules concern all environmental claims and that they need to be supported by proof, And what is meant by proof is that they actually say that it regards independent, peer-reviewed, widely recognized, robust, and verifiable scientific evidence. I mean, just imagine trying to find that for any sort of claim. But of course, that doesn't narrow down what you would actually say because you need to find scientific basis for that.

It needs to be publicly available and actually they've been so specific they said that you could have a QR code on your product that would actually refer you to a website where you have all this information so we're not talking about you know a huge product packages just to be able to include all the information we actually talk in some sort of reasonable way you're actually also no longer able to give these kind of loose promises I mean you've probably come across that saying that we will be net zero by 20 30 that is no longer okay to just say that instead you need to include a time-bound science-based and measurable commitment to that and you're also required to include some sort of implementation plan that shows measurable and verifiable interim targets that how you how are you going to reach 20 30 and be net zero by that time how what are.

These are waypoints along the road that you could that you need to reach then also the one thing that I caused a lot of contention is also environmental labels so you know you will no longer be able to use your own environmental labels and I don't know how you how common that is in other places but in Sweden at least you've had companies that actually create their own label saying better choice or you know eco-friendly and so on so that's no longer okay instead the EU will actually go through all the existing labels and scrutinize them and then approve them if they're okay and then you have carbon offsetting and credits so you're no longer able to actually say that you know buy this product it's net zero because you planted trees somewhere else you need to you can't use that kind of connection there and of course that would definitely be a problem for the for the for the flight industry for airplanes and so on because then suddenly I don't know how it works for you but I know at least if you fly with one of these more budget alternatives you could click in a box saying that would you like to balance the carbon balance or climate compensate for your trip you know five dollars for that that's no longer okay because you need to show connection so those are some of the rules there and it comes back to what you can use as explicit claims because if you seek to be the company saying that “We are planet friendly,” okay then me as a consumer would then ask you correctly and astutely that okay please provide me the scientific basis for that statement. How are you planet friendly showing you know XYZ scientist.

Abbie Fink: 18:41

So some of those claims will be net zero by 20 30 is an aspirational goal, right? It is something that an organization wants to be by a certain period of time and is a very admirable goal. And as communicators, we would, I think, would embrace a goal like that and then advise clients in organizations on how they can become that at the end of this time period. So it's not so much, at least listening to how you've described it, is not so much that it is a dishonest claim or an unprovable claim. It's an aspirational goal that they are hoping, ideally, to do. So as an advisor to organizations in the sustainability space and whether you are being brought in to help create their efforts and guide them or they are attempting to make these claims and need to understand how best to monitor them, them where do you explain the difference between an aspirational goal and a false statement and communicate that in such a way that it is you know I am being honest this is what I do want to do I’m just not there yet and here's what we're doing in order to get there.

Martin Lucander: 20:16

That's a very good question Abbie and definitely requires some thought for answering that well and of course I'll try my best here but I'd say that in that given situation where you where you would advise your client on to how to approach the type of goal setting or these aspirations things I'd say that it really comes down to transparency and, That if you have this goal, say now, net zero by 20 30, and you aspire to become that, then I'd say that I would advise the client in that case to say, okay, how can you be transparent about the challenges included in that? Because we all know that is a very difficult target to set for yourself.

And notwithstanding, you know, where the actual client would be at this given point in time, how far are you from that target is actually. But if you if you are honestly committed to that type of target then you need to actually show, how you intend to get there we can all you know point to Mount Everest and say that you know I’m not a I’m not a mountain climber but I’m going to get to the top there that's not reliable that's not but you could probably say that how do I intend to get there and by what ways will I prepare for that and what will I invest in and so on to essentially just build this type of trust for that type of aspiration. Because I think aspirations without actual, aspiration without really showing how you would go about that is just empty promises, would be my take on it at least.

Abbie Fink: 21:47

And so, you know, as we've talked about ESG programs in the past, and again, and even in this conversation, It sounds very ominous and very difficult and very complicated and very expensive. And it's, is it worth it? Should I, you know, just do something altogether different again? And my take is we all have to start somewhere. And if we've made a commitment to be a sustainable, environmentally friendly, whatever the new terminology will lead us to as this becomes even more and more commonplace, you have to start somewhere. So thinking about those early steps and really understanding the different, in this case, the Green Claims Directive or other regulatory guidelines, where do we start? What's some of the small steps we can all take in communicating and making a commitment to this open and transparent process for the organizations we represent, for our own organizations for that matter, to take a step in the right direction?

Martin Lucander: 23:06

Well, that's a good question here, actually, because I think that, I mean, this is challenging to companies, definitely. It's more challenging for certain companies than others, of course. I'd say, that, first start taking inventory on all claims being made because there are claims being made either by the corporation itself, the leadership, or by any other individual within that company. There are certain claims being made. And then investigate the actual proofs underlying these claims. Are there any proofs and what are we actually using as the examples that would support that type of claim? Then I’d say that setting up some sort of internal claims court could be a good way to go about it to judge these proofs internally of course and then as you go about this sort of claims court or claims arbitration internally be prepared to actually abolish these certain claims that actually had the weakest proof you know kill your darlings basically because if you can't support it then don't use it because you will actually be penalized for that. And when I talk about the penalty, the penalty is actually set at 4% of net turnover. The annual net turnover, 4%, would actually be the fine if you are found to use these sort of unsubstantiated claims.

And then when you've had this sort of internal arbitration of your claims, then define what you mean with these certain terms. It's okay to use sustainable responsible green even if you can just define what you mean by these claims and how you intend to use that make it make it easier for yourself by setting the actual setting the grounds for how you can be judged when you use them and then when that is all said and done and of course very difficult probably as well then I think it's really a question of developing a coherent and unitary message internally and ensure that it is understood by everyone within the organization. So that means that, for instance, circularity is a term being used and tossed around a lot these days. I mean, everyone is essentially circular if you look at them. Regardless of how linear their business model is, they claim to be circular. That is definitely something that needs to be part of this sort of coherent unitary message are we circling what way are we using that should we use another term for that so we ensure that everyone is speaking the same language internally, everyone is an ambassador and when it all comes back to is that in the end of the day what you're actually doing is that you are ensuring that you are walking the talk.

Adrian McIntyre: 25:52

Thanks for listening to this episode of PRGN Presents, brought to you by the Public Relations Global Network.

Abbie Fink: 25:58

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