Dive Brief:
- Deloitte unveiled a compliance tool Tuesday that aims to help companies detect greenwashing and ensure robust compliance of climate and sustainability claims made by them.
- The “Green Claims Navigator” is powered by artificial intelligence and designed to identify misleading statements a company has made about the environmental benefits of its product or practice within minutes, the consulting firm said. The tool — available in Europe, the Middle East and Africa — vets claims made in the company’s sustainability reports, websites and marketing campaigns, as well as packaging materials.
- The launch comes as the number of companies linked to greenwashing incidents has surged in recent years and so has the regulatory scrutiny and enforcement surrounding it. A recent report from ESG research firm RepRisk found that the number of companies linked to greenwashing incidents had jumped 28% last year while the total number of greenwashing incidents has more than doubled over the past five years.
Dive Insight:
The European Union began enforcing its law cracking down on greenwashing and misleading environmental claims in business-to-consumer markets, the Empowering Consumers for the Green Transition Directive, in September, while Switzerland’s Federal Office for the Environment backed stricter standards for climate-related claims under its Unfair Competition Act in March.
Deloitte said in a September note that global regulators are tightening greenwashing enforcement and under these new compliance requirements, companies now “bear the burden of proving their climate and sustainability claims are substantiated by objective, verifiable evidence.”
The Green Claims Navigator seeks to alleviate this burden by providing companies a governance framework that simplifies how they manage environmental claims. The tool is designed to automatically detect sustainability statements made by the company, check them against current laws and regulations and highlight when further proof is needed. The consulting firm said this should allow companies to have continuous oversight on their sustainability communications, as well as consistent monitoring and governance across its business units and teams.
“With the recent EU Empowering Consumers for the Green Transition Directive, the importance of environmental claims that are clear, credible and supported by evidence is now enshrined by law,” Deloitte Swiss Assurance Leader Lay Boon Tan said in a Nov. 3 LinkedIn post. “A proven and tested technology will go a long way in giving Boards and Executives across Europe the confidence they need against these regulatory demands.”
