Greenwashing, sportswashing and pinkwashing

You may be selling t-shirts that support Pride, the LGBT+ community, or other groups that support human rights, or make claims based on them; but those t-shirts may have come from a country where there’s risk they may have been made using forced labour. 

You might be a sports team accused of using your brand image to cast a favourable light on the home country of a sponsor where the government has been accused of human rights abuses. 

You may be a popular retail brand pushing your sustainability credentials, but are your raw materials obtained from truly sustainable sources? 

At best these could be seen as a case – common in large organisations – of the left hand not knowing what the right hand is doing. At worst, they are prime examples of pinkwashing, sportswashing and greenwashing aimed at covering up the organisation’s ESG failings. 

Either way, they are a brand risk to businesses. Savvy and aware consumers may choose to avoid your brand or even accuse you on social media of hypocrisy. Increasingly inappropriate claims could potentially land you in hot water with regulators. 

How can businesses protect themselves? Read on to find out more. 

Evolving legislation, regulatory landscapes and industry focus

These issues become all the more pertinent as we see regulators becoming increasingly active and alive to ESG issues, particularly around the S (social issues), as well as the E (environmental issues) that have historically been the focus. So too are we seeing further legislation in this space, with the  EU’s tandem set of legislation (CSRD and CS3D) requiring companies to identify potential negative impacts of their business on human rights and/or the environment. The G (governance) is the glue that binds these elements together and, arguably, may be lacking where a company is not joined up in terms of its practices and branding.

In the UK, we have seen the Competitions and Markets Authority announce on 26 January 2023 that it will extend its scrutiny of misleading environmental claims in fashion to the fast-moving consumer goods sector, issuing specific environmental claims guidance and a green claims code too. 

On 25 May 2023, the Advertising Standards Authority updated its guidance to avoid racial and ethnic stereotyping in ads – encouraging diversity of accents, food or cultural customs, but with ensuring those people are not the source of any jokes or used in a way that marks them out as “other.” 

Looking behind the marketing to protect your brands

It seems clear then that firms should look behind the marketing to check that their own house is in order before making significant claims of support or alignment with a particular community or cause. 

Our top five tips:

1. Understand the evolving legal landscape. Firms should get to grips with evolving rules from regulators like the CMA and industry bodies such as the ASA, as well as the incoming legislative updates in the EU, the UK and on the wider global stage. These bodies also have shifting focuses and priorities which sectors should be alive to. In considering your activities against these developments, it may be worth asking this question: would an individual with a grievance be able to use any of these developments against the business?
2. Carry out due diligence on your supply chain. You need to understand not just what your own organisation is doing, but your whole supply chain, identifying suppliers and collaborators (including eg influencer marketeers), carrying out appropriate due diligence on their practices and activities, mitigating any adverse impacts and continually assessing these parties on an ongoing basis. Under CS3D, the due diligence requirements are likely to have a wider scope than supply chains in the narrow sense, and cover a range of downstream – as well as upstream – connections.
3. Ensure you have appropriate whistleblowing policies, internal employment practices and grievance procedures. Ensuring staff feel empowered to speak up gives organisations more power to ensure that their external claims align with the internal feeling and practices in their own organisations. The ability for staff at all levels to know that they can safely blow the whistle reflects a shared responsibility and positive culture. The establishment of adequate grievance procedures is a key requirement of CS3D.
4. Authentic representation and engagement with community and consistent support throughout the year. Make sure your support for social groups is not just for specific events like Pride Month or for International Women’s Day. Do the work throughout the year and engage with local communities. While no organisation is perfect, a consistent and well thought-through approach across the business aligning with wider policies and practices should back-up statements and publicity. Equally each organisation will have different focuses, expertise and priorities which will make consistent authentic representation look different from brand to brand. For example, DLA Piper hasset up an LGBT+ pro bono unit, Iris Represents, connecting its LGBT+ staff and allies to LGBT+ NGOs and individuals in need of legal help throughout the year. Our Women in Sports group is also a great example of authentic engagement and support for gender equality in underrepresented areas.
5. Engage all stakeholders. One of the common difficulties large organisations face is maintaining a consistent message across its stakeholders and ensuring transparent and joined up reporting lines. Develop policies and processes which cater for the above points but apply these across and listen to feedback from all business divisions and sectors. Ensure that the organisation has a transparent understanding of its practices, areas for development and controls.

DLA Piper can help you with any of the above points, whether it be assessing your supply chain, looking at the strength of your employment policies, or simply connecting your employee networks to ours to discuss learnings. Get in touch with any of our contacts listed to find out more.