Episode 6 (EN): BusinessShift – Greenwashing

00:00:00: BusinessShift.

00:00:06: The podcast for decision makers and executives who want to deal with the topic of sustainability

00:00:11: in a sustainable way.

00:00:14: Welcome to BusinessShift, the podcast that changes perspectives and explores the question

00:00:18: of how to make more out of business, namely sustainable and future proof.

00:00:24: I'm Tobias Kirchhoff, your host from TÜV Rheinland.

00:00:27: By my side today, I once again welcome our sustainability expert from TÜV Rheinland, Dr.

00:00:32: Bahar Cat-Krause.

00:00:33: Welcome, Bahar.

00:00:34: Nice to have you here.

00:00:35: Hi Tobias.

00:00:36: I'm looking forward to our podcast today.

00:00:38: Today we are dealing with a topic that we see every day in everyday life, namely false

00:00:42: promises.

00:00:43: On 100% natural climate neutral refueling, we are forest positive, green cruising.

00:00:50: Our excess scent for plastic bags protects the environment.

00:00:53: Our cars are low in pollutants and clean.

00:00:56: We all know these misleading, incomplete and very vague statements.

00:01:00: Bahar and I would like to talk about how far manufacturers can mislead consumers with impunity

00:01:05: with a lawyer who does not make false promises to us but who speaks plainly in court.

00:01:10: Today we are speaking with the multiple award-winning lawyer and sought after speaker on the subject

00:01:16: of sustainability and corporate responsibility, Dr. Christoph Schork from the partnership Heuking Kühn Lüer Wojtek

00:01:21:

00:01:23: Welcome Christoph. 

00:01:24: Hello Tobias, I´m glad being here.

00:01:25: How are you doing?

00:01:26: I'm good.

00:01:27: I'm here.

00:01:28: Thank you very much for being back.

00:01:29: In our last podcast, we talked to you about laws, regulations and then we also touched

00:01:33: on the topic of greenwashing that there are laws.

00:01:36: Maybe we'll get to that later.

00:01:37: And today this is our topic greenwashing.

00:01:39: And naturally the question arises directly, what is greenwashing from your, from a legal

00:01:44: perspective?

00:01:45: Yes, you can tell from the term that there are two English words in it, green and washing.

00:01:50: And I think that's actually quite good for the description.

00:01:53: So you could also say that someone puts on such a green coat.

00:01:56: He tries to clear himself perhaps.

00:01:58: Yes, greenwashing.

00:01:59: These are a bit of the associations you have with the term and that's not so far-fetched.

00:02:04: In the end, it's about the fact that many companies like it and consumers too, if the

00:02:09: products are sustainable, if they are environmentally friendly.

00:02:12: And the companies then do this quite consciously.

00:02:15: For example, by using the green colors or simply writing on it, my product is climate

00:02:20: neutral, environmentally conscious, ecological.

00:02:23: There are a wide variety of variations.

00:02:26: And all these terms have a bit of their own that they can be interpreted in such and such

00:02:29: a way.

00:02:30: It is not so clear what is behind it.

00:02:33: Do you have an example, a very concrete example to illustrate this?

00:02:38: So I think the most catchy example, and this has already gone up and down through the courts,

00:02:42: is actually exactly the word climate neutral.

00:02:45: Climate neutral actually means that by the way, unlike CO2 neutral, it refers to all

00:02:50: greenhouse gases and can now ambiguously, and this is our point now, mean that I have

00:02:55: compensated for it.

00:02:57: I invested in a reforestation project.

00:02:59: I bought certificates, whatever.

00:03:01: So I didn't actually change anything in my manufacturing process of my product, but I

00:03:05: compensated for it afterwards.

00:03:07: But of course, it can also mean that I have already taken measures in my manufacturing

00:03:12: process to ensure that the CO2 emissions, the greenhouse gases, do not occur at all.

00:03:17: So if we now put on the glasses of the consumer who is now standing on the shelf and there

00:03:23: is the shampoo bottle or whatever and it says climate neutral, then he doesn't think so

00:03:27: hard.

00:03:28: Is this now a compensation or was it possibly actually a reduction?

00:03:31: But he just thinks it's cool that it says on it and maybe that's why he decides on

00:03:34: this product.

00:03:35: And if he knew he might be disappointed, because in this case, it is only compensated for instead

00:03:40: of actually reducing it.

00:03:42: You just said that there are already judgments, there are already cases.

00:03:46: Come on, tell us about a case.

00:03:48: I'll take a case that I think is a bit plastic.

00:03:50: By the way, there is not just one.

00:03:52: Of course, this is the airline industry which has also advertised from time to time.

00:03:57: So there was an airline that said, "Well, with us, you will fly CO2 neutral to the Biennale."

00:04:02: The Biennale is an art show.

00:04:04: This offer was therefore primarily aimed at art lovers and was intended to encourage them

00:04:09: to fly there in a CO2 neutral way.

00:04:11: And then they wrote about it.

00:04:13: So 100% SAF.

00:04:15: I don't know if you know that.

00:04:16: This is an aviation fuel that has been produced in a climate neutral way.

00:04:20: So in this case, ended up in the courts.

00:04:23: In this case, these were not German courts, but that doesn't matter.

00:04:26: And it turned out that the airline actually added only 5% of this SAF to the specific

00:04:32: flight to Venice.

00:04:34: But that's not right, is it?

00:04:35: Yes.

00:04:36: Well, they have already done something.

00:04:37: They compensated for the other 95% with certificates, environmental projects, whatever.

00:04:43: But they just didn't disclose that only 5% are in it and 95% are compensated.

00:04:48: And that was the problem.

00:04:49: That's why they were attacked there.

00:04:51: And there you will find many other examples that are always in this area of tension.

00:04:56: Compensation rather than reduction and not really putting your money where your mouth

00:04:59: is.

00:05:00: Actually, they should write on it.

00:05:02: If we write climate neutral here, then it just means it's offset or it's reduced and

00:05:06: that's just not the case.

00:05:08: This is this deception where the consumer then makes a decision because he has a different

00:05:12: idea.

00:05:13: That's what it's all about.

00:05:14: Yes.

00:05:15: And you can see here I once brought a few products with me, randomly from our household.

00:05:19: Here Muesli is also climate neutral on it.

00:05:22: Here baby food, climate positive.

00:05:24: Here also on the mineral water, climate neutral, even certified.

00:05:28: As you just said, yes, that associates with the consumer.

00:05:31: When I buy that, I buy a product with which I also strengthen the environment.

00:05:35: And that is apparently not the case at all.

00:05:37: Yes.

00:05:38: So the labels, I'll say now, product names in the form of such statements are supposed

00:05:41: to bring about a certain purchase decision.

00:05:44: Christoph, you just said it.

00:05:46: When I'm now a consumer in the supermarket and have so many labels on the products, I

00:05:50: usually don't have the time to look up what that actually means, but make a decision at

00:05:54: relatively short notice.

00:05:56: I say this so decisively because we find it again and again that there are so many labels

00:06:01: that are simply difficult to grasp at the moment of shopping.

00:06:04: If I shop online now, I might have a little more time.

00:06:07: I can inquire a bit.

00:06:08: But I'll say now at the point of sale in the supermarket, I'll take this and then

00:06:12: it says climate neutral on it.

00:06:14: And I think to myself, great product.

00:06:16: I'll take it with me.

00:06:17: This goes in a direction where I suggest to consumers that they are buying a more sustainable

00:06:22: product compared to another product that does not have this label.

00:06:25: And I think that's exactly the point to present this real transparency to say, okay, it might

00:06:30: be climate neutral, but why?

00:06:32: Because I have offset it or because my strategy is really to bring my greenhouse gas emissions

00:06:37: for this product to net zero, they say, i.e. really to net zero offset and that through

00:06:42: improvement and optimization measures.

00:06:44: Did that then continue with the airline?

00:06:46: The topic of climate neutrality?

00:06:48: Christoph, can you maybe explain it again?

00:06:50: Yes.

00:06:51: So one more point on what Bahá said, it is also inadmissible and always has been.

00:06:55: This deception of the consumer, which is taking place here, has always been inadmissible under

00:07:00: the so-called UWG, which is the German Act Against Unfair Competition.

00:07:06: This is no peccadillo.

00:07:08: Writing climate neutral on your bottle is not forbidden, but the intended consequences

00:07:13: are inadmissible.

00:07:15: I can defend myself against that.

00:07:17: Consumer associations also do that.

00:07:19: I also brought something with me.

00:07:21: Yes, not only you.

00:07:23: This is a disdainful piece of plastic.

00:07:25: And that's what I found in my wardrobe this morning.

00:07:28: But what does it say on it?

00:07:29: Yes, watch out.

00:07:30: It says climate neutral packaging.

00:07:33: And then there is a link to a page where I can look and a QR code.

00:07:36: We have to tell you right away what this packaging is.

00:07:39: This is actually the packaging with which my shirts, which I got during the dry cleaners,

00:07:43: are always packaged like this.

00:07:46: Everyone probably knows that they don't get wet or dirty when I've just picked them

00:07:49: up.

00:07:50: And by the way, this packaging no longer only has this imprint and of course it is supposed

00:07:54: to suggest.

00:07:55: Yes, I think to myself every time I go to the dry cleaners, man, now she's made another

00:07:59: packaging over it.

00:08:00: Yes, what kind of environmental pig am I?

00:08:03: And then I might see these wonderful imprints as a consumer.

00:08:06: It's climate neutral packaging and my blood pressure goes down.

00:08:09: That's how it works in practice.

00:08:11: And now we have to ask ourselves whether this is still permissible or not.

00:08:15: So again, it says climate neutral on it, a link to a page and a QR code.

00:08:19: So I'll scan it now.

00:08:20: You scan it.

00:08:21: Exactly.

00:08:22: Then let's take a look.

00:08:24: So I am now directed to a page and there I see 2.7 tons of CO2 compensated.

00:08:30: That's good.

00:08:31: I already have at least some information.

00:08:32: And then I see that this compensation has been carried out with projects in Asia, climate

00:08:37: protection projects, marine conservation projects.

00:08:40: Well there is obviously not only this is really a transparent, beautiful packaging with this

00:08:45: imprint.

00:08:46: There's something behind it.

00:08:48: We can see that there seems to be compensation somewhere.

00:08:51: But I've just explained it.

00:08:52: I didn't really want to have the packaging around it because I don't want to present

00:08:56: myself as an environmental pig.

00:08:59: But I actually want no CO2 to be produced at all by the production of this packaging.

00:09:04: And exactly these cases, as you said earlier, actually went the same way before the courts.

00:09:09: There was a case where at first it only said climate neutral.

00:09:13: Then at some point it was greenwashing.

00:09:14: It was decided.

00:09:16: Then in the second step, they pressed this link on it, so to speak, to make it clear that

00:09:20: there was compensation behind it.

00:09:22: And then the court also said that is still not enough, is still misleading.

00:09:27: And then at some point they started to put this code on it.

00:09:30: So now you can scan and see what it is.

00:09:33: And there is now the latest development.

00:09:35: There was the higher regional court of Düsseldorf.

00:09:39: They said, that's enough for us.

00:09:41: If the code is on it, anyone can look it up.

00:09:44: But now the very last thing, which was now in June of this year, the BGH has now virtually

00:09:49: closed the barrel.

00:09:50: The BGH, the Federal Court of Justice, is the last instance to decide this.

00:09:55: And they have now actually said that this is not enough either.

00:09:58: This is the so-called "couches ruling".

00:10:01: And in this "couches ruling", the BGH says, so the code is not enough, but the term is

00:10:06: clearly ambiguous.

00:10:08: And if you really use it, you also have to make it clear what you have done.

00:10:11: Yes.

00:10:12: And just printing a QR code on it is still misleading.

00:10:15: So you would have to do more.

00:10:16: Why is it called "couches ruling"?

00:10:18: Is there a large confectionary manufacturer?

00:10:20: Exactly.

00:10:21: They actually have, it has to be said, they didn't print it on their packaging, but they

00:10:26: advertised in a newspaper that they're printing it on their packaging.

00:10:28: products were climate neutral and then just like we just had it on our plastic.

00:10:34: They also have a QR code printed next to it and that was then attacked by the consumer

00:10:39: protection authorities and has now finally decided that this path is no longer possible.

00:10:45: So you really have to make it clear.

00:10:47: Is it compensation or is it actually reduction?

00:10:49: Yes, it's no longer enough to just print a QR code on it.

00:10:53: So much for the reality now, but what is the legislator doing about it?

00:10:56: In which direction can you go to help the consumer so that not just anybody that's similar

00:11:01: with organic labels that I have to deal with climate neutrality, etc.

00:11:05: Plaster everything to counteract this?

00:11:08: Well I had already hinted at it a bit earlier.

00:11:10: The regulation has always existed.

00:11:12: So there are norms that regulate this and the case law has interpreted this norm and

00:11:16: now this catch-us ruling is ultimately binding.

00:11:19: The journey is now going a little further.

00:11:21: Now the EU comes into play again, which of course also deals with the issue.

00:11:26: There is a directive that is also in force and I don't want to name every detail so

00:11:30: to speak but she has also dealt with the term climate neutral.

00:11:34: And in principle, if you break it down according to this guideline, it is now said that I can

00:11:38: actually no longer use climate neutral with compensation but only reduction.

00:11:43: That is the core message.

00:11:45: That means that if I use climate neutral now, I have to prove it, write it on my product.

00:11:49: So I have to make it clear what I'm doing.

00:11:51: And actually the ultimate consequences, climate neutral and offsetting, that's over.

00:11:55: I'm simplifying this a bit now because it's very complex but climate neutral is over.

00:12:00: And what else there is, there will be a blacklist where there are certain terms in it that

00:12:05: you are no longer allowed to use if you don't prove it.

00:12:08: But how do I as a company deal with it now, Baha?

00:12:11: Let's assume that I really do something yes that I reduce emissions, that I improve my

00:12:15: production.

00:12:16: Then I have to be a little careful as a company to go into communication because I have to

00:12:21: be afraid that I will also get into this greenwashing that I am so carried away a bit so to speak.

00:12:26: How do companies deal with this?

00:12:28: How do you see it in practice?

00:12:30: What do you experience there?

00:12:31: That's a really fine line.

00:12:33: So communication is, I'll always say a bit of the freestyle in sustainability because

00:12:38: if you really have customer contact, communicate with consumers, then of course you have to

00:12:43: really clearly explain why this product or your product is more sustainable than that

00:12:49: of the competitors maybe like that and in a very transparent way.

00:12:53: And Christoph, you just mentioned that there is legislation, there are green claims, for

00:12:58: example, there is MCO, we can perhaps come back to what the difference is in a moment.

00:13:03: But that's exactly where these topics are dealt with and really pointed out or the requirements

00:13:09: are set.

00:13:10: That definition such as climate neutrality or less CO2 are really scientifically proven

00:13:15: and are also tested.

00:13:17: Also by external bodies, for example, when it comes to labeling products.

00:13:21: If you now do B2B communication with your business partners, then of course you have

00:13:25: other options.

00:13:26: You don't have to communicate on point then but can go a little further.

00:13:30: You can say I've done studies, I have targets, I have measures to get closer to my net zero

00:13:34: goal.

00:13:35: Here too, I can only say that open communication is the most important thing and not always

00:13:40: to present yourself as more positive than you might be.

00:13:43: So the statement, hey, we're on the way, we're getting better.

00:13:46: That also creates a certain closeness to reality and then also shows that I may be getting

00:13:50: better in relative terms, which is very, very important in the first step.

00:13:54: You just mentioned it, green claims.

00:13:56: Christoph, perhaps you could briefly explain again, what is this topic of green claims

00:14:01: and also illustrate where we currently stand in that area.

00:14:04: Well green claims are basically what we're talking about that I somehow assign a term

00:14:08: to my product and try to advertise with it.

00:14:11: That's actually a bit flat what we're talking about.

00:14:13: These are green claims, what Bahá said is completely correct.

00:14:17: The point is that you can continue to use them.

00:14:19: But you now have a much narrower line through which you have to muddle through.

00:14:23: You are just not allowed to do certain things anymore.

00:14:26: Yes, otherwise you will definitely get a beating.

00:14:29: By the way, not only the consumer, the competitor looks at it the same way.

00:14:33: Well, if the competitor would find such a plastic bag here, which is still hanging in

00:14:37: my glider cabinet now, I actually picked them up last week.

00:14:41: So it hasn't been hanging in there for years, but is apparently still in use.

00:14:45: Then the competitor could also say, wait a minute, that's no longer possible.

00:14:50: I have read the BGH catchers ruling carefully.

00:14:52: So a QR code, that's no longer state of the art.

00:14:56: That means I have to do a lot more.

00:14:57: My green claim that I'm making there for it to be climate neutral, I would now have to

00:15:03: write exactly how I saved CO2 in my production process of this plastic, this piece of plastic.

00:15:10: And that's where it gets a little less exciting, of course, because if I have to make big explanations

00:15:16: on it, someone standing in the supermarket won't read through everything anymore.

00:15:20: It's all about the quick click.

00:15:23: I see that great, I buy it because it's climate neutral.

00:15:26: And with that, the air is a bit out of the number.

00:15:28: And I think that's what it's all about, that it's depicted cleanly and that people aren't

00:15:32: deceived.

00:15:33: Yes, and if we now think in terms of companies again, or what do you recommend to companies,

00:15:38: how they can communicate adequately, let's say that they say, I'm doing good and I'm

00:15:42: talking about it accordingly.

00:15:43: I think you have to know these topics and know exactly where the degree is and that

00:15:47: in communication, in the marketing department, you have to be aware of it.

00:15:52: They have to be able to deal with it.

00:15:54: I even think that it's probably not just the marketing department, it's in every area

00:15:58: of the company.

00:15:59: So it also starts in production.

00:16:01: Anyone who does this today with their eyes open, so to speak, will at some point have

00:16:05: the warning in their mailbox.

00:16:07: Either from the competitor or from Deutsche Umwelthilfe, or can also be consumers who

00:16:12: may also have claims that make their money.

00:16:14: It then says, so please refrain from doing so because violates the UWG.

00:16:19: And I don't think anyone wants that.

00:16:21: So think about it, you have your 20,000 bottles in the supermarkets.

00:16:25: That would mean you can now stomp them all, pick them up and stomp them all.

00:16:30: And then you can think about the fact that you might take a look at what you print on

00:16:33: it in the future, in the communications or marketing department.

00:16:37: Yes, we always talk about the product now.

00:16:40: There are also different communication channels.

00:16:43: And that's actually what I always like to go through with my customers to say, okay,

00:16:47: what do I actually want to communicate where.

00:16:50: And if I now have, for example, a website where I can perhaps link to where I can simply

00:16:55: present things in a completely different way, then I also have many more opportunities to

00:16:59: say, okay, what is actually my goal?

00:17:01: Where do I want to go?

00:17:02: What measures do I actually have?

00:17:04: Where do I stand in the goal achievement, et cetera?

00:17:08: Of course, you have incredibly little space on such a product.

00:17:11: But you also have to say, of course, labels should provide orientation, but I don't know

00:17:14: about you.

00:17:15: But in my environment, I know very, very many who really inform themselves.

00:17:19: There are friends, family members who no longer eat cookies because there is palm oil in them.

00:17:24: And that's not always on the product.

00:17:26: So they also inform themselves.

00:17:28: So I also believe, and that's why I say that if the communication channel is so important,

00:17:33: we must not underestimate ourselves as customers.

00:17:36: So I'm too, well, now I'm getting a bit out of the topic, but also my nieces, for example,

00:17:41: they take a close look at what kind of fire it is, what do they do, what materials do

00:17:45: they use, or is there palm oil, sugar, et cetera, inside.

00:17:49: I didn't do that before.

00:17:51: Very important.

00:17:52: And not always just, I'll say now, you can't always put the activities on just one label.

00:17:57: And you also correctly mentioned that it's not just about products.

00:18:00: It's also sometimes about corporate communications.

00:18:03: Yes, if you publish any reports or write something good about the company, then you have to be

00:18:08: very careful not to greenwash.

00:18:11: The example now again with the topic of climate neutrality.

00:18:14: If I were to write now, my company is climate neutral in 2050, without writing anything

00:18:19: further about it, it would also be forbidden under this M-Co directive in the future.

00:18:24: You could say that the noose is tightening further and further.

00:18:27: I just have to do more and be a little more precise.

00:18:30: And these deadweight effects, I print something on it so that your nieces are reassured and

00:18:36: then somehow read and say, great, it's climate neutral.

00:18:38: I'll buy it.

00:18:39: That just doesn't work anymore.

00:18:41: And to be honest, it's a good thing.

00:18:43: The consumer shouldn't be fooled.

00:18:44: With that, you have already anticipated my final word, so to speak.

00:18:48: We discussed greenwashing in detail today.

00:18:50: I think these were very nice, very striking examples.

00:18:53: Also that it is becoming more and more difficult to greenwash because the legislator is now

00:18:58: not only closing the loopholes, but also simply applying the law.

00:19:03: And if companies simply provide authentic information in the field of sustainability

00:19:07: via websites, including QR codes, I can communicate very clearly what I am doing, where I am on

00:19:12: the road, and where I may not even be on the road yet.

00:19:16: That too is part of authentic communication.

00:19:19: Dear Bahar, dear Christoph, thank you for these very interesting insights, which are

00:19:23: really relevant every day for both companies and your consumers.

00:19:28: And to our listeners out there, a big thank you for sticking with it.

00:19:31: I'm sure you'll take a closer look at the packaging and what's in it and above all,

00:19:37: what's on it and what the QR code reveals the next time you go shopping.

00:19:41: And you'll also make the right choice about which products to take home with you.

00:19:44: My name is Tobias Kirchhoff and I hope you never fall into the greenwashing trap again

00:19:49: from today on, neither as a company nor as a consumer.

00:19:55: And if you, dear listeners, want to learn more about sustainability in business, just

00:19:59: stay tuned.

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00:20:31: And as always, you can find all information and tips in the show notes.

00:20:36: And don't forget, change and sustainability starts with us.

00:20:41: So until next time, your BusinessShift, the podcast for decision makers and executives

00:20:47: who want to deal with the topic of sustainability in a sustainable way.

00:20:53: Stay curious.

00:20:54: Bye bye.

00:20:54: