Asked by
To ask His Majesty’s Government what assessment they have made of
the practice of ‘greenwashing’ by businesses; and what steps, if
any, they intend to take to tackle it.
The Parliamentary Under-Secretary of State, Department for
Business, Energy and Industrial Strategy () (Con)
My Lords, green claims made by businesses should be clear and
accurate and not mislead consumers, who are increasingly looking
to make environmentally friendly choices. The Competition and
Markets Authority and the Advertising Standards Authority have
published guidance to help businesses to comply with the law when
making environmental claims about their goods or services. If a
business does not comply with consumer law, the CMA and other
bodies, such as trading standards, can bring court
proceedings.
(Lab) [V]
My Lords, while many businesses are genuinely committed to the
net-zero objective, should not there be zero tolerance when
businesses puff their publicity and accounts with dishonest
claims about their green credentials? Does the Minister accept
that for those businesses self-regulation will not work, that
tough regulation and penalties are needed to deal with these
fraudulent practices, and that the Government must work urgently
with international partners to establish standardised accounting
rules, an end to bogus carbon offsets, rigour in the definition
of ESG, and reliable and clear information for investors and
consumers?
(Con)
I understand the point that the noble Lord makes, but businesses
do not self-regulate in this area. In September 2021, the
Competition and Markets Authority published guidance on
environmental claims on goods and services, to help businesses to
understand how to communicate their green credentials while
mitigating the risk of misleading consumers. The Advertising
Standards Authority has also taken action against some
businesses.
(PC)
My Lords, I draw attention to my registered interest. Does the
Minister accept that there is real pressure on productive
agricultural land, particularly in Wales and Scotland, from the
big businesses buying up such land and taking it out of
production, so adding to food cost inflation? Does he accept that
perpetual increased afforestation encroaching on productive land
is not an acceptable answer, and that it needs land use that
sustains food production in an environmentally acceptable
manner?
(Con)
That is a fascinating question, although I am not sure that what
it has to do with the subject under discussion. However, it is a
very real issue and certainly something that we need to keep
under close examination, because we do not want productive land
taken out of use.
(Con)
Will my noble friend be able to give, now or later, an estimate
of the cost of ESG reporting to British companies? The reason I
ask is that an SEC commissioner recently stated that the cost to
the 4,600 companies it regulates of providing ESG reporting is
currently at $2 billion and expected to rise to $8 billion with
the new regulations.
(Con)
I know that my noble friend is very interested in this important
subject; we have discussed it before. The problem we have is that
many businesses make environmental claims about their
sustainability and that others publish information in their
annual reports—often voluntarily; there is, in some respects, no
legal obligation to do so—so the question is about how investors
can get transferability across different companies and compare
one company against another. There may be a case for some
standardisation and regulations in this space, but of course we
need to look at the business impacts.
(Lab)
My Lords—
(CB)
My Lords—
(Con)
My Lords, I think that it is the turn of the Cross Benches,
followed by the Lib Dems and then Labour.
(CB)
My Lords, does the Minister agree that if we are to take action
on claims of greenwashing, we need clear criteria and standards
against which to judge those claims? The Government have
recognised that part of this is the need for a green taxonomy.
Work has been done on this, yet it seems to have been paused. We
were promised the results of the working party by the end of last
year, so can he update us on progress on the green taxonomy? I
declare my interests as in the register.
(Con)
The noble Baroness is right that we need some consistency on
these matters. The work on a green taxonomy is being taken
forward by the Treasury and as far as I am aware it is
proceeding.
(LD)
My Lords, last year the Advertising Standards Authority ruled
that HSBC’s greenwash ads were not adequately qualified and left
out material information about its greenhouse gas emissions. Does
the Minister agree that a ticking off from the ASA after an ad
has gone out is not a deterrent? Will he request the CMA to
incorporate this into its green claims code so that financial
penalties can be imposed if firms breach the rules
repeatedly?
(Con)
The ASA has taken action against a number of companies, including
one that made green artificial grass, over their environmental
claims. I think this is a very real deterrent to businesses
repeating unfair advertising, but I know that the CMA is looking
at a number of different sectors: it has already published an
investigation into the fashion sector and is moving its
investigations on to other areas of the economy as well.
(Lab)
My Lords, the noble Lord mentioned that the Competition and
Markets Authority has issued its green claims code, under which
it has the power to take errant companies to court. Have any
actually been taken to court?
(Con)
The noble Lord is right: the CMA published its guidance in
September 2021. Enforcement of unfair claims and misleading
advertising is a matter for trading standards. I am not aware of
any claims that have been taken to court but, if there are any
actions I can point him to, I will write to him.
(Con)
My Lords, tenant farmers face acute risk of greenwashing, as
landlords seek to take tenanted land back, to access public and
private markets. The Rock review has already seen evidence of
tenant farmers in England being served notices to quit for this
purpose. What are the Government doing to ensure that we support
our vital tenant farmers and do not lose tenanted land from
delivering food and environmental outcomes?
(Con)
My noble friend is right to point to this as an important issue.
It does not fall within my purview as a BEIS Minister, but I will
certainly find out the answer and write to her.
(Lab)
My Lords, green- washing is clearly a serious issue which, if not
clamped down on, will seriously hinder progress towards net zero.
We welcome the steps being taken to do this, such as green
taxonomy, increased ESG reporting requirements and investment in
product sustainability labels. All these measures should mean
that communicating ESG credentials will become critical to
companies, as well as compliance with legal requirements. All are
steps in the right direction. Can the Minister outline the
timeline for their implementation and what assessment the
Government have made of the impact of the changes proposed?
(Con)
There are a lot of questions in what the noble Baroness said, and
there are a number of different aspects to this problem. The
Advertising Standards Authority and the CMA are taking action,
our net-zero strategy contained several commitments around
eco-labelling, and we are working with the Financial Conduct
Authority to introduce a sustainable investment label. Those are
all proceeding at the moment.
(CB)
My Lords, it is well known that food, agriculture and
deforestation account for a very large amount of greenhouse gases
and biodiversity loss, yet it is impossible for a consumer to
tell when buying a product exactly what its biodiversity impact
or carbon content is. All big food companies rail against putting
this on labels, on the grounds that it would take up too much
space. That is fair enough; they can put it online, where nerds
such as me can look it up to see whether it is okay. What are the
Government doing to make labelling correct in terms of those two
factors? Have they at least started a consultation and is there
any news on when they might implement it?
(Con)
The noble Baroness referred to looking at information online. I
am sure she will be pleased to know that the CMA has launched a
website to help consumers to identify and understand genuine
environmental claims about the products and services that they
are purchasing. It is designed to encourage them to ask
themselves simple questions about whether they can believe the
claims that manufacturers are making or not.
(GP)
My Lords, I was going to mention Amazon as a prime example of a
company that uses greenwashing, but the Government are also very
much a greenwashing organisation. They constantly laud their
environmental principles, but then the Prime Minister, for
example, hops into a private jet to go to Leeds instead of taking
the train like the rest of us. Does the Minister agree that the
Government need to correct some of their greenwashing?
(Con)
There are things we could all do. The noble Baroness talks about
the Prime Minister taking jets; she might want to talk to one of
her Green council colleagues who, I believe, flew up to COP 26 in
Glasgow. There are always improvements we can all make in our
personal behaviour.
