Why many companies struggle to communicate sustainability efforts effectively

Transparent communication is deemed crucial to prevent greenwashing. 

Over 60% of global businesses have adopted sustainability strategies in 2024, yet only 10% believe they are effectively communicating these strategies, according to a recent report from Euromonitor International.

The Passport Sustainability platform revealed that 20% of global sales in 2023 were attributed to products with sustainability claims. These products experienced, on average, 1.5% higher sales growth compared to non-sustainable counterparts over the past four years.

Maria Bogdanova, senior product manager for Sustainability at Euromonitor International, said that the effectiveness of sustainability claims relies on transparent communication to prevent greenwashing. 

Despite “natural” being the most prevalent sustainability claim, its vague nature has led to concerns about misleading information. She said efforts to clarify this with terms like “chemical-free” have not standardised definitions, causing confusion and undermining consumer trust.

This issue is notably prevalent in the beauty, personal care, and pet care industries, where 39% and 37% of products, respectively, carried “natural” claims in 2023.

In 2023, organic, no GMO, and vegan/vegetarian claims were amongst the top value sales claims across various sectors. The demand for vegetarian products is growing, with breakfast cereals leading at over 20% vegetarian claims. Investments from major retailers are expected to drive further growth in vegetarian, vegan, and plant-based products.

Additionally, the vegan claim is expanding into beauty products as consumers demand cruelty-free and plant-based alternatives. The “cruelty-free” claim has become a significant player in this space.

Consumers are also increasingly demanding recyclable and sustainable packaging. Brands are highlighting their use of such materials in marketing efforts.

About 71% of professionals prioritise improving customer perceptions and brand reputation through sustainability, as per Euromonitor’s 2024 survey. However, companies face the challenge of avoiding greenwashing whilst also addressing “greenhushing” — downplaying sustainability efforts due to scrutiny.

The packaged food industry has reduced its sustainability product offerings, influenced by backlash from greenwashing cases, leading to more cautious communications.

Moreover, Zero Waste and B Corp certifications are amongst the fastest-growing sustainability claims. Zero Waste products saw a 33% increase in value sales in 2023, with companies like Colgate-Palmolive aiming for 100% TRUE Zero Waste certification by 2025.

B Corp certification, which signifies strong social and environmental performance, is also gaining traction, especially in the beauty industry. Despite the complex and costly certification process, B Corp products are increasing, particularly in staple foods and snacks, with the certification growing in the UK and US, though it still accounts for less than 1.5% of all products as of Q2 2024.

The Passport Sustainability platform provides comprehensive data across 11 industries, 25 global markets, 50 product categories, and over 70 different sustainability claims. Euromonitor has surveyed over 40,000 consumers and 900 professionals to gauge sustainability challenges and consumer sentiments.