Joanna Stephenson, MD at PHD Marketing examines why the Green Claims Code is set to hold life sciences companies to account for their sustainability claims.
In a world of ever-shifting commercial and consumer environments, one of the most important market changes on the horizon is the Green Claims Code. Where new initiatives such as the UK Plastic Tax and EU Packaging Levy affect businesses and industries differently depending on their input and output, the Green Claims Code is set to impact all sectors equally, both business to business (B2B) and business to consumer (B2C).
As a communications specialist for the life sciences sector, we have seen clients of every size shift and adapt their external and internal communications in preparation, but there still seems to be some uncertainty of what exactly it means for pharmaceutical and life sciences businesses – and what the actionable changes will be.
What is the Green Claims Code?
Today, any business worth its salt has an externally communicated sustainability strategy. One of the most pervading trends in commerce is that consumers want to know that their purchase decisions are making a positive change to the world around them and that the products they back are playing their part.
The UK’s Competition & Markets Authority (CMA) has issued new guidance in the form of the Green Claims Code. The new document, which applies to all externally communicated sustainability claims, provides six key principles that every claim must adhere to.
Green Claims Code - Six Key Principles
- Be truthful and accurate
- Be clear and unambiguous
- Not omit or hide important relevant information
- Be fair and meaningful
- Consider the full life cycle of the product or service
- Be substantiated
For most of us, these principles might seem like a given – but the reality is that to this point, that isn’t necessarily the case. While the Green Claims Code targets businesses operating in the UK, it reflects a number of initiatives coming to fruition across the continent and beyond. The European Commission (EC), for example, is aiming to bring more structure to sustainability claims following a public consultation in late 2020.
With regards to the Green Claims Code and its principles, the CMA will formally review misleading claims from January 2022.
Why do we need it?
The pharmaceuticals and life sciences sectors, perhaps more than most, know the benefits of regulation in creating fairer market conditions and greater clarity.
A growing problem for all businesses – including health and wellness - is that ‘greenwashing’ has become a significant challenge, and as a by-product, has removed any commercial punch from ‘sustainability’.
The term itself has lost all meaning and has become little more than wallpaper. If a business describes its activities as sustainable, what would that mean to you? For example, it could be responsibly sourced ingredients, research practices, packaging or logistics models that support better use of resources – or any combination. Ask 10 people what a sustainable life sciences business looks like, and you’re likely to get 10 different answers.
The Green Claims Code is all about removing ambiguity and levelling the playing field. Because sustainability has always been open to interpretation, there has been no real contextual benchmark for the consumer. Instead, by creating this benchmark, the code provides new protections for the consumer and for commercial buyers too.
What does it mean for the life sciences and pharmaceutical sectors?
Retail and commerce – whatever this looks like in practice – must reflect the changing needs of the consumer. As the gap between health and consumer-led FMCG, personal care and food closes, this becomes increasingly important for companies in the life sciences and pharmaceuticals space.
Areas such as health and wellbeing, supplements and medicines haven’t typically focused on sustainability as a competitive edge, but as the market progresses and shelves become more crowded, it’s likely to take a more prominent role. Crucially, this directive includes business to business communications, such as the sale of ingredients in new product development.
To avoid conflicting with the Green Claims Code, all existing claims made should be audited against the principles and when creating new communications, these tenements should be front and centre.
As mentioned, it’s likely that sustainability will play a much greater commercial role for the life sciences sector so it’s a fantastic opportunity to start collecting, collating and using sustainability data in a way that complies with the Green Claims Code and adding a new valuable and accurate messaging to new and existing products.
One of the most crucial pieces of ‘good practice’ that the sector can glean from its more retail-oriented counterparts is that there needs to be very clear separation of business sustainability strategy and specific claims relating to a product. A business may take great pains to reduce CO2 in its logistics or its commitment to natural or fair trade ingredients, but this needs to be wholly separate from the claims made on-pack when it comes to end products.
In addition, sustainability claims that are necessary or compulsory, in order to be legally compliant, should be avoided altogether. They’re a ‘given’, which doesn’t assist the customer in gauging the environmental impact and leaves more space for ambiguity. It could, in fact, fall foul of the new Green Claims Code under the principle of ‘meaningful’.
In life sciences and pharmaceuticals, sustainability claims aren’t applied to products often – but this may well change as the market reacts to consumer demand. We are expecting to see sustainability more front and centre in marketing communications. We have recently shared a guide with our clients on what the Green Claims Code means for their business, while assuring that, as a communications expert, we will take the strain in ensuring commercial messaging is compliant.
We look forward to seeing how the pharmaceutical and life sciences sectors adapt over the coming year – the Green Claims Code looks set to play into the accelerating sustainability focus in the industry and may present a lot of strong commercial potential.