‘Sustainable collections’, ‘green products’ and ‘eco-lines’ are just a few examples of the buzzy terms many retailers have been throwing around recently in order to increase their appeal in the eyes of fashion consumers in general, but especially the environmentally conscious. What started as a ‘tree hugger’ phenomenon almost two decades ago, is now the mainstream, and one can no longer stroll the supermarket aisles without encountering ‘green’ products in almost every section.

The market has reacted to a real and growing sentiment. In the past few years, it seems like an increasing number of consumers prefer more sustainable options when faced with a choice. According to a study published in NielsenIQ , 81% of global consumers say they want companies to actively work to improve the environment, 88% try to buy products from sustainable companies, and 66% are willing to pay a premium for sustainable goods. A recent study even found that eco-conscious Gen Z consumers have an outsized influence not only on their Gen X parents but even on their boomer grandparents when it comes to sustainable shopping.

But what really stands behind these vague terms and sustainability claims, and how can consumers really know if products are as ‘green’ as companies say?

While it’s very easy to adopt these terms for use in a company’s marketing material, it’s much more complicated to implement sustainability considerations in production processes and to successfully grow a business without inflicting harm on the environment. In fact, this phenomenon of adopting eco-friendly terms without doing anything to back them up has become widespread enough to receive a name: greenwashing. Greenwashing refers to the act of spreading misleading information or conveying a false impression about how environmentally sound a company's products really are. Companies regularly deceive consumers into believing that their products are environmentally friendly or have a greater positive environmental impact than they actually do.

However, closer scrutiny is quickly approaching. The United Kingdom’s competition regulator has revealed plans to investigate whether fashion brands ASOS (ASOS.L), Boohoo (BOOH.L) and George at Asda are misleading shoppers with their environmental claims, and will probe retailers for evidence of greenwashing. The agency added that this was “just the start” in its efforts to root out this practice from the fashion industry.

This leads us to what should already be obvious: responsibility for incorporating sustainability in an organization does not belong in the marketing department. Sustainability is part of the umbrella term ESG, which stands for Environmental, Social, and Governance. Understood as such, it is an undertaking that encompasses everything from GHG emissions to employee well-being, to diversity and inclusion. This still leaves us with an important question - how should ESG be managed in an organization?

Managing ESG in the organization

Though many companies are eager to improve their ESG ranking, some find creating a plan of action to be a challenge. First of all, the term “ESG” itself can be somewhat nebulous and is often used interchangeably with other terms like corporate social responsibility. Moreover, because it is such an expansive term, that covers a wide variety of topics, it is also difficult to know where to start and how to prioritize key issues. This can often cause frustration when companies find that their efforts are either too incremental to affect meaningful change, or too dispersed for the change to be tangible.

Another big challenge is the need to engage almost all the departments in the organization in ESG initiatives. For example, to promote projects that aim to decrease the organization’s GHG emissions, it is imperative to have the full cooperation of the operations department. If the organization wants to use more energy-efficient production materials, the procurement department must be on board. Finally, if the ESG lead wants to promote employee diversity as a core value, HR must be fully aligned with this mission while recruiting new people.

Companies have different ways of managing ESG, like appointing an ESG manager, employing a sustainability team, or having an ESG committee. The bottom line is that if a company wants to accomplish substantial achievements in the field of ESG, it must get the full collaboration of all the relevant units in the organization, as well as have the backing of upper management.

Sustainability is much more than a cool trend for a company to adopt – it is a laborious endeavour not to be taken lightly, which requires the highest commitment of a company's resources, both human and financial.

Written by Michal Arbel, ESG Project Manager, Kornit Digital