Using terms like ‘Eco-friendly’ and ‘Sustainable’ used to be an easy win for marketers, but legislation has now caught up and it is essential to back and provide evidence of these claims, especially in the manufacturing industry.
Any statement related to the environment, whether on packaging, your website or even a company LinkedIn post, can expose the business to accusations of greenwashing if it can’t be proved to be true.
However, within the challenge of avoiding greenwashing claims comes an opportunity; to stand above the competition by being able to substantiate claims. For the manufacturing industry, this provides the potential to create a point of difference for marketing and win contracts (especially if the customer has ESG targets of its own).
What leads to greenwashing accusations
Fast-moving teams trying to respond to shifting market expectations, public pressure and board directives can easily overstate progress or achievements, especially when they are related to the environment. The intention might be good, but problems begin when plans and claims move faster than the evidence and data behind them.
Optimism often plays a part in a greenwashing misstep. Sustainability teams may have a roadmap in hand, but marketing or comms may simplify or stretch language to keep pace with competitors. Copy ‘drift’ is another common issue, where small wording changes accumulate over time across different channels, leaving inconsistent or misleading impressions.
What starts as a well-intended commitment can quickly snowball into something a company can’t prove, measure or fully explain. Often, an issue will take executives by surprise, because they weren’t aware of the messages being shared.
The cost of getting it wrong
Regulators are watching closely. In Australia, ASIC has already taken enforcement action against listed companies and super funds under its greenwashing rules, resulting in court cases and penalties running into the millions of dollars.
An example is Australian Gas Networks, which has recently been accused of making false and misleading claims in its TV and digital advertising.
The consequences in such situations go beyond fines. Greenwashing damages customer and investor trust, strains partner relationships and undermines employee engagement. Once credibility is questioned, it’s difficult to recover.
What counts as an ESG claim?
ESG claims aren’t limited to formal reports. Any public statement or communication referencing environmental or social performance can count. This includes the wording on:
- Website copy and landing pages
- Packaging or product labels
- Social media posts
- Sales decks or customer presentations
- CEO speeches and letters
- Supplier RFP responses
Even implied claims matter. Imagery suggesting climate action, ‘green’ logos, or badges with vague credentials can all signal sustainability, whether or not there’s substance behind them. Promises about what your business will do also count, particularly if you’re using them to differentiate in the market.
A model for turning claims into evidence
To avoid falling into the greenwashing trap, manufacturing businesses need a simple framework to ground claims in data and internal accountability. Here’s where to start:
- Define policies and targets: The business should have structure and clarity around ESG practices, policies and goals.
- Set a clear baseline: Every claim should reference a starting point so progress can be measured.
- Define interim milestones: Avoid vague long-term goals without check-ins. Targets for 2030 are fine, but what does 2026 look like?
- Be transparent about outcomes: If your claims are ambitious but there is no evidence behind them, you risk stakeholders and regulators spotting the gap.
- Treat ESG claims as governed disclosures: ESG claims now attract regulatory, investor and legal scrutiny, so they need to be more than marketing collateral.
- Appoint an accountable owner: Individuals or teams inside the business need to take ownership and be accountable.
- Break things down: Break ESG into categories such as reductions and offsets. If you’re applying offsets, disclose the type, quality and limitations.
- Be precise with language: Terms like “eco-friendly” or “sustainable” need clearly defined parameters behind them. Link to detailed sources, data or accreditations where possible, and use clear descriptions, e.g. 15% recycled materials.
- Demonstrate accountability at board level: Boards must also take responsibility for shaping and reviewing ESG policies.
Your opportunity to stand out
Backing ESG claims with evidence can pay off on multiple levels. When your public statements reflect grounded progress, you will impress your customer base, pass regulatory requirements and stand out in tenders.
Action, clarity and evidence are the keys to credibility. It’s better to make claims and be able to prove them than to have lofty goals and fancy wording which you can’t stand by.
What counts as a greenwashing risk for manufacturers?
Any environmental or sustainability-related statement, whether on packaging, websites, social media, or advertising can lead to greenwashing accusations if not backed by verifiable data. Even implied claims, such as “eco-friendly” visuals or vague terms, can expose your business to scrutiny from regulators like ASIC or the ACCC.
How can manufacturers avoid making misleading ESG claims?
The safest approach is to base every claim on measurable evidence. Define clear policies, and interim progress milestones; ensure transparency in results; and align marketing messages with actual operational data. Treat ESG communications as governed disclosures, not marketing content.
Why is substantiating ESG claims an opportunity, not just a compliance issue?
By providing transparent, evidence-backed ESG data, manufacturers can build trust with customers, investors, and partners. This credibility can become a competitive advantage, particularly in tenders or contracts with clients who have their own ESG requirements.
