On September 20, the UK Competition and Markets Authority (CMA) published the Green Claims Code, which will see the CMA conduct a full review of deceptive green claims early 2022. Given the fact that 40% of company’s green claims could be misleading, it presents a landmark in consumer and industry information.
According to the code, any declarations made by a company need to comply with the following six principles: truthfulness/accuracy, clarity, no omission / hidden information, fair comparison, consideration of full product life cycle, and substantiation.
From callouts on greenwashing to Credo’s Dirty List, consumers and the industry alike are practicing due diligence. BeautyMatter spoke to Jessi Baker, CEO of blockchain technology platform Provenance, about the forces shaping sustainable beauty's future.
How is the application of your software in the cosmetics industry developing?
For beauty shoppers to be able to make purchases that match their values, it’s crucial that sustainability claims are standardized and consistent throughout the industry. Many brands are already sharing information on their impact (from certifications to more complex claims on everything from packaging to social impact to carbon), but it’s often lacking a clear definition or context, and can confuse and mislead even the most savvy shoppers.
Our software is being applied by a fast-growing number of brands and retailers—this network effect of now over 100 brands and three retailers is helping to establish an industry-wide consistent approach to sustainability communications, which is key to increasing shopper understanding.
Our software currently enables credible, consistent brand- and product-level claims, but we’re soon to launch software to support transparency at an ingredient level. This will enable brands to tell the story of key ingredients credibly, and to provide a greater depth of sustainability content for shoppers.
We’re also looking at how to use technology to influence shopper behavior post-purchase—we’re currently working on an exciting new tool which will enable brands to provide postcode-specific instructions on how to recycle specific product packaging, empowering shoppers to "close the loop" with recyclable materials.
Have there been any learnings from your working relationship with Cult Beauty?
We couldn’t ask for a better first partner than Cult Beauty. Their celebrated no-nonsense approach on efficacy was echoed in our work together on trustworthy impact. We’re seeing Cult Beauty brands act very quickly to achieve Proof Points with Provenance. It’s clear that the industry is fast recognising the commercial importance of credible sustainability claims. But I think that this eagerness to be part of the Provenance network is also driven by the time saving for brands—for those selling D2C and through multiple retailers, there are huge efficiencies found in being able to create sustainability content once and have it instantly update across multiple online channels.
As for the consumer reaction, Cult Beauty has reported an incredible 70% increase in sales volume for brands with Provenance Proof Points. But beyond the impact on brands’ bottom lines, it’s also interesting to see how shoppers are engaging with different claims. What we’re seeing is that shopper engagement is strongest for Proof Points that surface more complex claims (for example, packaging recyclability claims or "clinically tested" statements), which demonstrates the role of clickable claims with impartial information in educating beauty shoppers.
How will the Green Claims Code help drive brand transparency and also clamp down on brands bending the rules?
Most obviously, beauty brands and retailers know they’ve been put on notice about greenwashing and that there will be legal repercussions if their claims fail to comply come the New Year. It’s worth noting that the CMA has specifically called out beauty amongst key focus industries for its own investigation.
But besides the threat of legal action, the Green Claims Code is a very empowering guide for brands. Many who have made great strides on reducing their social and environmental impact have previously been reluctant to share this publicly because of the lack of a "blueprint" for how to communicate this progress. The Green Claims Code gives marketers a practical checklist for making environmental claims—by preventing the green-hush effect [companies hiding sustainability efforts due to fear of public criticism], it will drive confident brand transparency amongst legitimately "green" businesses.
What does this regulation mean for the future of not just clean beauty but the beauty industry in general?
Brands will have to stop dressing up legal obligations as product benefits. In the UK/EU, we often see "clean" beauty brands promoting the absence of harmful chemicals and ingredients that are in fact legally prohibited. One of the implications of the Green Claims Code is that brands will have to stop marketing their products with these claims.
As a more general point, the Green Claims Code promotes the importance of clearly defined claims and substantiation. Without explaining and proving their claims, beauty brands will no longer be able to market products as "organic" or “carbon neutral"—they’ll need to define these terms and deliver the evidence.
Do you see this kind of reinforcement catching on globally? If not, what factors stand in the way of its adoption?
I expect environmental claims to be targeted more and more by regulators across the world. We’re seeing a number of European bodies start to take action, and in the US, a growing number of lawsuits has prompted intervention from advertising trade bodies.
There will, however, be differences in the strength of standards from country to country, and of course, it remains to be seen how they will be enforced. As each country rolls out its own framework for sustainability claims, navigating the legislation map will become a big challenge for brands. But guides like the Green Claims Code will help global brands translate the reality of their supply chain into language that’s recognizable to shoppers in that geography.
It’s also worth remembering that legislation responds to the industry—both shoppers and brands. As global expectations around corporate sustainability evolve, so will legislation—and we're already seeing this with China revisiting its rules on animal testing.
Should the clamping down on misleading claims also extend further into the beauty industry to include all brands, not just green/clean ones?
Absolutely. The Green Claims Code applies to all organisations making environmental claims, so it will affect brands for whom sustainability is a core value as well as brands that have made less progress on mitigating their impact to date.
But as I see it, protecting future brand value in the beauty industry depends on establishing and clearly articulating their "green" credentials. According to British Beauty Council research, 88% of consumers want brands to do more to help them make a difference and 86% want information about ingredient supply chains. With this in mind, I think the question to consider is less about whether legislation applies to all brands, and more to do with whether brands will be able to maintain relevance in the absence of an ambitious and clearly communicated sustainability strategy.
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