A few entries back, I wrote about “greenwashing”. We talked about What exactly greenwashing was?, Who does it?, and How it affects us as consumers? We even talked about ways to avoid it or easily spot it in a business’s campaign or ads. However, in this post I want to touch on the importance of policy and the leverage it has with preventing greenwashing all together. Policy helps to guide the actions and set guidelines, rules, and regulations for organizations. It provides company leaders with a predetermined course of actions for managing issues, as well as articulating an organization’s values, philosophies, cultures and strategic goals and objectives.
In terms of global climate impact, policy helps ensure social and environmental sustainability in the fashion and textile industry through reporting and traceability. Policy aids in separating legitimate climate commitments from public relations campaigns, and present standards that are necessary to weed out “low quality” climate pledges.
Despite lagging Europe, US regulators are making small strides to tackle greenwashing with policy. The policies are set in place to determine what governing entities will actually do or not do regarding particular issues or problems.
Here we’ve mentioned The New York Fashion Sustainability and Social Accountability Act aka the Fashion Act, and if passed, it would require disclosure of environmental and social policies, processes, and outcomes of US Fashion brands. This piece of legislation would ensure compliance with global principles and guidelines set by the UN, ILO, and OECD.
In 2021, upon entering the White House, President Joe Biden promptly signed for the United States’ reentry into the Paris Agreement. This would frame the beginning of public consultations that would begin the changes in reporting practices in environmental policies and initiatives. Ultimately preventing the way companies and brands “embellish” their activities to disguise them as environmentally positive.
Many states, and even the federal government, require sustainable solutions from marketers of consumer-packaged goods. The Securities and Exchange Commission (SEC) specifically target ads; as well as scrutinize investment fund advisors who misinform “green” investors and shareholders with misleading data and product labeling regarding sustainability. Recently, the agency proposed two rule changes that would prevent misleading and deceptive claims by US funds on environmental, social and corporate governance (ESG) qualifications and increase disclosure requirement. These changes are introduced to require publicly traded companies to disclose how their climate change risks affect their business. The call for transparency and disclosure by the SEC will encourage companies to provide honest and useful information on ESG matters and help tackle greenwashing.
In Europe, concrete rules and legislative measures are in place to address greenwashing.
Agencies such as the Sustainability Accountability Standards Board, the Global Reporting Initiative, and the Task Force on Climate-related Financial Disclosures all require organizations to present data from financial and non-financial sources that show they are meeting standards. The gained information must be readily available to all shareholders.
The Sustainability Accounting Standards Board (SASB) provides a clear set of standards for reporting sustainability information across a wide range of issues, from labor practices to data privacy to business ethics. More specifically, international companies use the standardized discovery for reporting on sustainability in annual reports, financial filings, and company websites.
At UKCOP 26 in Glasgow, shareholders discussed initiatives that would set an international, unequivocal, and unified standard for reporting environmental targets, rather than relying on voluntarism. This would ensure consistent, reliable, and comparable labeling across companies globally. Thus, eliminating unsubstantiated assertions and confusing terms when reporting.
In conclusion, with the global adoption and integration of policies in the fashion and textile industries, this sector and its shareholders will be able to reach sustainability and net positive climate targets. Policy isn’t necessarily policing, and it is indeed instrumental in achieving effective environmental communication from corporations to consumers. This adds true value an makes significant impact to the planet.