EP222. Bye-bye Beauty Greenwashing

Greenwashing, in case you didn't know, is a form of advertising or marketing that tries to persuade us, the public, the shoppers, that an organization's products, goals or policies are environmentally friendly when they're really just not. It's the practice of giving a false impression of the environmental impact or the environmental benefits of a product or service. So an example would be a beauty brand claiming to formulate eco friendly skincare products while using ingredients that are under ecological pressure, or using non recyclable packaging, or not calculating or thinking about their climate footprint while still making all those eco friendly claims. Now I'm sure you'll be able to think of some examples you've seen too. I certainly can in a previous career, and I can't believe I'm about to say these words honestly, but I worked in the oil and gas industry as an environmental scientist and I remember totally losing my call one day when my manager came in to announce that the head office was proud to release the company's sustainability strategy. At which point I started raging that an oil company could never ever be sustainable. And how dare they even use that very word to describe their operations. And as you could probably tell, I chose not to stay there all that much longer. Anyway, greenwashing is everywhere and you can find examples of it in every single industry. But now imagine a world where greenwashing doesn't exist. Or let's go one step further, imagine a world where greenwashing doesn't exist in the cosmetics industry. And this could potentially be the future as legislation is emerging all over the world to make companies and organizations liable for greenwashing. So in today's podcast I want to take a look at the regulatory changes that are happening in the EU and how this could affect the world and the beauty industry. Hi, it's Lorraine Dallmeyer, Chartered environmentalist, biologist and CEO of award winning online organic cosmetic formulation school Formula Botanica. I host the Green Beauty Conversations podcast and these are my green beauty opinions which I challenge the beauty industry's terrible track record on sustainability and share my thoughts on how we make the beauty sector a better and more sustainable place. If you want to be the first to hear all of my latest episodes, make sure you subscribe to this podcast. So, as you heard on the podcast last week when I interviewed Priscilla Rolvers of Green Cosmetics Revolution, the European Union has made some big regulatory changes in the last year with the introduction of the EU Greenwashing directive, or to give it its full name, are you sitting down? The directive Empowering consumers for The Green transition through better protection against unfair practices and better information. And I must admit, I really did laugh when I saw the directive's full name, as clearly there were no marketers involved in creating that title. But it's a groundbreaking piece of legislation that has the potential to fundamentally shift the way that companies make claims, not just in the eu, but globally, because EU regulations tend to trickle out into the rest of the world and they then affect global legislation elsewhere. So to start, the 27 countries of the European Union are now in the process of turning this directive into their own national legislation, which means that companies just won't be able to make false environmental claims anymore because there will be repercussions. In fact, a company can be fined to 4% of its total annual turnover if they fail to comply. And let's face it, we need this deterrent in place, because a lot of companies simply won't do the right thing unless they are forced to. And I remember when I worked in the energy industry having this exact same conversation asking why on earth the company I worked for didn't do more. And the answer I received each time was that they didn't do more because governments didn't regulate them enough. So this concept of corporate social responsibility generally only tends to go so far unless brands have extreme, extremely visionary leaders. And let's face it, most of them don't. And other countries around the world are looking at similar legal frameworks. In fact, it's interesting to see that the investment world has also had regulatory interventions in recent years around funds. Investment funds claiming to invest in so called sustainable stocks and shares. So Deutsche bank was fined US$19 million in the US in 2023 for greenwashing its environmental, social and governance practices. And in recent years, there have been numerous greenwashing laws rolled out across the finance sector in Europe, North America, and quite a few across the Asia Pacific region. So I don't think it will be long until we start to see more regulatory frameworks rolled out across further consumer sectors, which would then catch the beauty industry too. Now, in the meantime, as I already discussed in my recent podcast episodes so 219 and episode 220, when I interviewed Maggie Spicer. And then I took a look at the class action lawsuit currently in progress against toothpaste company Toms of Maine, we can't solely rely on consumer class action lawsuits to drive companies to do the right thing. And personally, I really don't feel that that's the best mechanism for holding companies to account either. So I think these new regulations this new directive is a good thing. And I also find it fascinating that micro companies are exempt under the EU greenwashing directive. So for the avoidance of doubt, I had to look this up. A micro enterprise is defined as a company with fewer than 10 employees and an annual turnover or balance sheet below 2 million euros. So this exemption gives indie beauty brands with ambitious ideas around sustainable beauty the opportunity to explore those ambitious, innovative products and services without the fear of being fined for getting it wrong. But the big brands themselves, they are not exempt. And you know what? In fact, the bigger they are, the harder they will likely fall. As I already discussed in episode 204 recently when we took a look at an analysis of the 10 biggest cosmetics companies in the world and how their sustainability claims are falling short. Those brands may fall pretty hard, and in the coming years I suspect that we'll see the beauty industry tread a lot more cautiously around its sustainability claims, which of course have really mushroomed out of nowhere in the last five years. So let's face it, the industry really doesn't have a choice. They're going to have to fall in line. So my challenge to you for this week is to start looking forward to a world where greenwashing doesn't exist anymore and where we as consumers won't be the ones who have to police brands to get it right. Now, I know I'm a complete utopian idealist here by saying all of these words, but honestly, we can't be that far away from that world. And we will get to the stage where regulations are enforced and where companies are viewed as pariahs for making deliberately misleading green claims. It's going to be fascinating watching the beauty industry try to adapt and I for one will have a front row seat for sure. Will you join me? Thank you for listening to my Green Beauty opinions. Remember to visit the Formula botanica website@formulabotanica.com to try our free online formulation course. And if you haven't subscribed yet to the Green Beauty Conversations podcast, please make sure you do so now in your favorite podcast app. Leave me a five star review if you enjoy the conversations I host and I'll be back soon with my next episode.