The challenge: Consumer trust in eco-friendly claims is wavering due to packaging confusion and unsanctioned standards for environmental ambitions.
- 54% of consumers believe environmental labeling is merely a marketing strategy to increase sales, per a survey of European consumers by consumer rights group Euroconsumers in April and May 2021.
- 53% said they could not distinguish between true and false green claims.
The opportunity: A growing number of companies are offering tools to help businesses develop a more accurate picture of their carbon footprint, per The Wall Street Journal.
- Several startups are in the space, including Watershed Technology, which last month received a $1 billion valuation.
- Those startups are competing with several large tech companies, including Salesforce.com, which recently rolled out the latest version of its platform for tracking and analyzing climate data, and Microsoft, which last October announced the soft launch of a competing product.
The big takeaway: Retailers seeking to remain relevant to younger consumers have no choice but to develop more eco-friendly initiatives, whether that involves the design of their stores, packaging, supply chain, or product mix.
- However, those efforts need to be authentic rather than greenwashing.
- Businesses that find effective solutions will be well-positioned for growth.