What is green marketing?

Green marketing, often also referred to as climate marketing, climate marketing or ESG marketing, is the marketing of an organization’s performance or progress in achieving its ESG goals or the environmental characteristics of products or services with the help of various external messages. With increasing evidence of climate change and the disruption of natural ecosystems, stakeholders expect organizations to have environmental programs in place that aim to protect the environment and ensure the long-term viability of the planet for future generations. The rapid increase in public interest in the environmental performance of organizations and the resulting marketing effect has led to a sharp rise in “greenwashing”.

According to a 2020 study by the EU Commission, 53% of the environmental claims reviewed in the EU were found to be vague, misleading or unsubstantiated and 40% were unsubstantiated. The resulting increase in consumer skepticism has led to a growing demand for environmental transparency. Stakeholder demand for ESG transparency and increasing greenwashing has led to the EU creating a new set of rules in the form of the Green Claims Directive.

Why green marketing pays off

Essentially, green marketing means advertising your own company’s sustainable products and technologies. According to the market research institute Facit Research, almost 70% of customers attached importance to the sustainability of the products or the company in 2017.

This proportion is likely to be even higher at present. It can therefore be assumed that green marketing and an underlying commitment to sustainability will pay off for companies.

EU Green Claims Directive (GCD)

As there have been no common regulations on voluntary environmental claims by companies in the EU to date, so-called green claims, greenwashing has become increasingly widespread, creating an uneven playing field on the EU market and putting truly sustainable companies at a disadvantage. For this reason, the EU proposed the so-called Green Claims Regulation (Directive on the substantiation and communication of environmental claims – Environmental Claims Directive) on March 22, 2023.

With this directive against misleading eco-advertising, fake seals and false sustainability claims, the European Commission is triggering dramatic changes throughout the EU market. If you want to advertise the ecological benefits of your product in the future, you must pay particular attention to the following:

The draft directive stipulates, among other things, that companies must state all CO2 offsetting separately in their climate statements by presenting the proportion of total emissions and the type of offsetting (project, method, calculation, etc.).

Violations of the Green Claims Directive can be really expensive. The regulation states that a penalty should be dissuasive and amount to at least four percent of the total annual turnover. In addition, the revenue generated from business with the products in question can be confiscated. There is also the threat of exclusion from public procurement procedures and access to public funds, including tenders, grants and concessions (for a maximum of 12 months).Micro-enterprises with fewer than 10 employees and an annual turnover of no more than EUR 2 million are to be exempt from the new regulations.

After the directive comes into force, the member states have two years to transpose it into law and apply it. The regulations are currently expected to come into force at national level in 2026/2027. That sounds long, but it’s not really.

As sustainability-related marketing statements and seals will also have to be supported by corresponding performance or improvements in these areas in future, corresponding campaigns should probably be planned at an early stage if you want to use corresponding sustainability-related advertising messages when the new regulations come into force.

From the current perspective, it can be assumed that companies that already act responsibly and provide credible environmental information when the new regulations come into force will gain a massive competitive advantage.

Creating a Green/ESG Marketing Plan

Well-planned and effective ESG marketing will be an important success factor in the future due to increasing stakeholder interest in ESG issues. Therefore, companies should create and maintain an ESG marketing plan in the following steps: