Many brands and retailers have set big environmental targets, only to fall short. Should their ambition be applauded or discouraged – or will rule changes put a stop to them?
Which is better – to aim high and fail, or to succeed by not trying? What about aiming high when you know your goal is impossible? Iceland MD Richard Walker may argue for that. Earlier this year, he argued he was “right to put a stake in the ground” with his 2018 pledge to remove plastic from own-label products by the end of 2023 – even though he had by then admitted his supermarket could not achieve it. “I would do it again,” he said. “All the major supermarkets have since brought in ambitious plastic reduction targets.”
Iceland also rowed back on its commitment to not use palm oil in its own-label food after Russia’s invasion of Ukraine, despite having eliminated it from those products in 2019. Walker argued it was either that or clear the store of staple products.
Unsurprisingly, Iceland has faced accusations of greenwashing, most recently by campaign group the Changing Markets Foundation this year, after Iceland’s plastic pledge still appeared prominently on its consumer-facing website with no mention the deadline had been abandoned.
However, the truth is Iceland is not unusual when it comes to setting and failing on sustainability goals. A recent investigation by the German publication Deutsche Welle and the European Data Journalism Network found two-thirds of pledges to go greener on plastic by European food and drink companies failed or were dropped – often quietly or even silently.
Danone, for example, promised in 2009 that 20%-30% of the plastic in its water bottles would be made from recycled materials within two years. By 2014, its target had shifted to 25% recycled PET by 2020.
So, is it better for a business to put a stake in the ground and try to achieve something remarkable, even if it ends up ripping it out? Not according to Changing Markets Foundation campaigns director Nusa Urbancic, who argues it is creating a “societal placebo” for consumer environmental concerns. “You think the medicine is coming but it’s actually fake,” she says, bluntly.
In fairness to businesses in the firing line, events of recent years, from Brexit to the pandemic and the Ukraine war, have rendered what once may have seemed realistic goals near impossible. “That will have impacted on the ability of all sorts of businesses to keep progressing on their sustainability agenda,” says a source at a giant fmcg company.
And if three years can be hard to foresee, what about 10 or 15? “Most of us have a good picture of our runways for the next five years, but once we get beyond 2030 it’s harder to map,” the source adds. “Does that mean companies shouldn’t set those targets? I think no. You’ve got to start somewhere. All businesses need targets, goals, ambitions… the important question is, are the targets that are being set realistic and credible?”
A source at a major UK supermarket agrees. “If you commit to getting to 50% of something and as result you achieve 43%, then the question is, would you have got to 43% if you’d set that as the target? Maybe not,” he says. “As a retailer, we do have a fear that if we get to the 43% – which is definitely better than 0% – we will get lambasted by the press.”
Greenpeace senior plastics campaigner Nina Schrank recognises there can be genuine integrity in trying to reach a target and not getting there, but argues this does not necessarily apply to all companies. “You get a lot of good press by announcing a pledge and they announce the failures quietly. I think we’re going to see more failed pledges in the next couple of months. It’s disappointing for consumers and for us.”
Greenwashing is a term that’s gathered momentum in recent years, but for Urbancic at Changing Markets Foundation, it’s a business practice that’s been going on for decades. “Coca-Cola made a [US market] promise of reaching 25% recycled content in 1990,” she says. “They later dropped it quietly and made another promise, of 10% recycled content.”
And far from contributing to sustainable progress, the practice is impeding it by acting as fake medicine not just to consumers but also the policymakers who would otherwise legislate, she argues. “We really see that when there is the promise of legislation, companies really increase their number of voluntary commitments.” It’s no coincidence, she says.
Zero Waste Europe executive director Joan Marc Simon is of like mind, arguing failed voluntary commitments are stalling legislation that would otherwise make companies become more sustainable. “It appears in all the media. Industry is taking responsibility, blah blah blah, and two years later they silently backtrack,” he says. “The reason there is not more legislation is because industry says it’s taking responsibility, and in the end it doesn’t.”
Third-party collaborative voluntary initiatives, such as Wrap’s UK Plastics Pact, also do little to impress Urbancic and Simon, who argue they lack transparency and only add to the distraction from real progress.
“Every time there is a threat of a new [mandated] recycling target or a target for this or that, automatically the industry always says they can take care of it themselves. That they will voluntarily commit to this or that. And the in the end they are not held accountable,” says Simon.
Urbancic agrees. “We would always like these voluntary initiatives to rank companies by their performance. For example, Wrap does a sector report. It says the sector reduced plastic by a certain percentage, so the bad performers can hide behind the good ones.”
The Changing Markets Foundation sets out guidance on what a good voluntary initiative would look like. “It needs to hold its members accountable,” says Urbancic. “You need transparency. Companies need to set baselines and report progress every year. The data has to be independently verified and the targets should be regularly updated and best practices shared.”
Not only that, but the initiatives themselves should be lobbying for more legislation and requiring the same of signatories. “Very often we see double-speak from companies,” says Urbancic. “They are members of these nice-sounding voluntary initiatives but behind the scenes they are lobbying against legislation or they are members of industry bodies lobbying against legislation.”
Simon argues any business serious about its voluntary commitments should want them to be mandated. “If they firmly believe that’s what they are going to do, then why oppose having it in law?”
But voluntary measures do seem to have some success. An annual progress report on Wrap’s UK Plastics Pact in November said signatories had reduced problematic or unnecessary single-use plastic by 46% since 2018, and cut plastic packaging on supermarket shelves by 10%, saving 140,000 tonnes of carbon emissions.
Not only does the initiative make progress, but it targets the most problematic material in a way policymakers cannot, says Wrap head of business collaboration Helen Bird. “Under the voluntary commitment approach, we set a strategic direction based on the evidence of what gets recycled and what doesn’t.”
PVC, for example, wasn’t on the government’s radar at all, despite being an incredibly damaging plastic, Bird argues. But in the past three years, “the businesses that are signed up to the UK Plastics Pact, who represent two thirds of the plastic packaging that’s placed on to the market in the UK and more than 85% of the stuff you or I would buy in a supermarket – we’ve reduced PVC by 80%,” she says. Bird acknowledges Wrap could provide more transparency of individual company performance, but argues it may be unfair. “One thing you need to be careful of, with individual reporting, is comparing apples with oranges,” she says. “You have different companies with different portfolios of products.”
Greenwashing: how the net is closing
Reputational damage is not the only potential consequence of a business falling short of its sustainability promises. In September last year, the Competition & Markets Authority (CMA) put businesses on notice to get their act together ahead of a full review of misleading green claims from the start of this year.
To help them do so, the authority published a ‘Green Claims Code’, setting out principles of existing consumer law, including a requirement that businesses “live up to the claims they make about their products, services, brands and activities”.
The relevant piece of legislation is the Consumer Protection from Unfair Trading Regulations 2008 (CPRs), breaching which can carry a penalty of up to two years’ imprisonment, though a fine is more common.
The CMA also works closely with the Advertising Standards Authority, sharing intelligence and in some cases referring complaints. The Committee of Advertising Practice also published new guidance on misleading green claims last year.
Broken promises are also “becoming more problematic from the perspective of companies reporting to investors,” adds the Changing Markets Foundation’s campaigns director Nusa Urbancic.
“There is growing scrutiny of greenwashing in the investment world,” she says. “If you’re misleading investors this can be much more serious [than misleading consumers] and there are now several investigations – even police investigations – into greenwashing.”
In August, the ASA upheld a complaint against Persil for making a “misleading” claim that its laundry detergents were “kinder to the planet” in a TV ad that depicted children collecting plastic litter from a beach. It won’t be the last such ruling.
It’s no longer enough trying to ascribe good to the least worst. There are increasing rules. You need to know them.
Level playing field
Bird adds that in her experience of talking to senior business leaders, “actually they want the legislation, to create a level playing field”. With extended producer responsibility, for example, a scheme expected to launch in 2025, it will obligate businesses to deal with the financial costs of recycling their products.
“I’ve not heard a single business in all the engagement we have say they don’t want EPR,” Bird says. “What they do want is a system that works. They’re prepared to pay the bill provided it drives the right behaviours across the whole of the system.”
It’s a view shared by the fmcg source. He rejects the notion voluntary pledges are not working. “Some of the big retailers are really good at engaging suppliers with their targets and aspirations, and getting through the bumps on the way to achieving stuff.” He also believes businesses want legislation that creates a level playing. What they don’t want is legislation that doesn’t.
“I think well thought through legislation, with the right ambition and outcomes, can help businesses. But all too often it creates a weird distortion in the market.”
That being so, one way businesses might remove the impetus for further unwanted distortions of the market is by actually meeting the targets they voluntarily set.
“I don’t think there is any harm in targets being stretching but it’s also important that business lives up to its promise and takes action at a speed their investors and customers would expect,” says Bird.
An Iceland spokeswoman argued the retailer had “always been open and honest” when it comes to progress and ambitions around its sustainability commitments. “Even more so, we’ve been fully transparent with our stakeholders and customers on how current global crises and challenges have impacted our progress towards meeting these commitments.
“For example, when we had to temporarily reintroduce sustainable palm oil into our supply chain to replace sunflower oil due it no longer being available as a result of the war in Ukraine. Without taking this step, we would have been forced to remove 400-plus much-needed affordable food products in the midst of a cost of living crisis.
“Similarly with plastic reduction – we’ve faced two years of setbacks on technical innovation with the Covid-19 pandemic, but ultimately our commitments have not changed – we’re just being honest regarding how we are currently tracking.”
A Danone UK & Ireland spokesman said: “Global supply constraints for rPET, as for all materials, are proving challenging for many across our industry and we’re doing what we can to mitigate this. Despite this challenge, we continue to offer our 100% rPET evian bottles (cap excluded) across best-selling formats and recently launched evian sparkling in a 100% rPET bottle, as well as our first 100% rPET bottles for Volvic Touch of Fruit.
“We’re also supportive of the government proposal for a Deposit Return Scheme, which aims to improve recycling rates and material recovery and promote a circular economy.”
A Coca-Cola Europacific Partners spokeswoman said: “We share the goal of eliminating plastic waste from the environment and acknowledge that CCEP, in partnership with The Coca-Cola Company, has a responsibility to help solve this issue.
“That was the driving force in establishing our World Without Waste goals, and while we continue to make progress against these targets, we are challenging ourselves to do more.
“Today in Great Britain, all of our packaging is 100% recyclable, and all smaller bottles are 100% rPET. Our aim is to get more of it back so that it can be recycled and turned into new packaging again. That’s why we’ve launched new bottles with attached caps, making it easier to recycle the entire package.
“Through our sustainability action plan, This Is Forward, we work with organisations to encourage more recycling, and have pledged to collect and recycle a bottle or can for every one we sell by 2030. However, in Britain we want to get there much quicker, if governments across Britain can agree on a common approach to the implementation of DRS.”
Could better data unlock voluntary progress?
A challenge for even the most basic measure of plastic use is inconsistency in how it is reported.
It was a headache for a Greenpeace and Environmental Investigation Agency survey in 2019, which tried to gauge how many plastic water bottles major supermarkets sell. Aldi provided a figure for all plastic bottles instead of just water bottles, erroneously giving it a higher number than even Tesco. “The way they report is so different,” says Greenpeace senior plastic campaigner Nina Schrank. “It’s difficult to compare like for like.”
The issue was also highlighted in a report by the Changing Markets Foundation in May this year. ‘Under Wraps’ revealed wild inconsistencies in how 74 supermarkets across Europe report their plastic footprint, with only 12 providing total weight in own brand and only six, including Aldi, Lidl and M&S in the UK, giving the number of own brand plastic items.
Dsposal CEO Sophie Walker argues businesses have a poor grasp of the extent of plastic in their supply chains, and a standardised industry approach could unlock more meaningful voluntary progress.
Dsposal is developing a software platform intended to help businesses meet incoming extended producer responsibility requirements through a standardised approach to data on types of packaging.
“It will help everyone in the supply chain, from the packaging manufacturers and potentially even before that through to the people manufacturing the products and the retailers and brands, to share packaging data along that chain,” says Walker.
The need was highlighted in workshops with retailers and suppliers, which were “basically like group therapy sessions for people freaking out about EPR,” she says.
Alice Rackley, CEO of Polytag, which uses Dsposal’s data standard and its own technology to tag and trace packaging through its life cycle, argues it could encourage voluntary progress by providing a way to prove it is being made.
Businesses “will have access to data they’ve never seen before,” she says. “That can then sit beneath claims they’re making about packaging being recyclable, and validate them, rather than at the moment exposing themselves to greenwashing claims.”