Green claims, advertising and consumer protection – a stricter approach?

Published 4 abril 2023

In the midst of increased public debate over environmental issues and climate change, regulatory bodies at the national and European level are seeking to take a more muscular approach to regulating environmental – or ‘green’ – claims. This article looks at some of the initiatives that are currently in play, and how they are likely to affect the approach of businesses to marketing their environmental credentials.

Increased guidance on green claims in adverts

The Advertising Standards Authority (ASA) has taken steps to clamp down on various issues arising out of green claims in the advertising space.

In December 2022, the ASA published advice on general green claims for non-broadcast advertising, covering full life cycle claims, imagery, the omission of significant information, as well as exaggeration and ambiguity in green claims. The thrust of the ASA’s advice note is clear: in order to not mislead consumers, “marketers should always ensure that they have robust substantiation” for their green claims, and must not omit significant information about their claims.

More recently, in February 2023, the ASA updated its guidance on ‘The environment: misleading claims and social responsibility in advertising’ to provide direction in relation to the use of ‘carbon neutral’ and ‘net zero’ claims in advertising. The ASA’s advertising update is, in turn, built on the Competition and Markets Authority’s (CMA) key principles on environmental claims on goods and services.

The ASA advises advertisers to consider a number of issues when making environmental claims:

• Marketers should “avoid using unqualified carbon neutral, net zero or similar claims.” The ASA has emphasised that such claims should be supported with information which explains the basis of these claims, so as to help consumers to better understand the claims being made.

• Claims about the reduction of carbon emissions must be substantiated. Marketers are expected to “include accurate information about whether (and to what extent) they are actively reducing carbon emissions, or are basing their claims on offsetting”. This is to ensure that consumers are not misled about whether the products or processes being advertised generate carbon emissions.

• Marketers should ensure that where they make a claim based on future goals relating to achieving “net zero” or “carbon neutrality”, such claims are based on a “verifiable strategy” to deliver those goals. It is not sufficient to make bare statements regarding net zero or carbon neutrality – the information supporting such claims must be set out or signposted in the advert.

• Offsetting claims should be substantiated with objective evidence – subjective data will not be sufficient. Marketers should also “provide information about the offsetting scheme they are using.”

• Qualifying information about a claim should be “sufficiently close” to the key aspects of the claim, in order for consumers to identify and consider it before making a decision based on that claim. A claim is more likely to mislead consumers if the qualifying information is less prominent and further away from the primary claim being made.

Following the publication of its updated guidance, the ASA has stated that it will conduct monitoring on carbon neutral/net zero claims in advertising, and gather information to review how these claims are being substantiated. The ASA will take immediate “proactive action” to address claims that are unqualified and likely to breach existing rules.

We have already seen how the ASA’s increased scrutiny of green claims has manifested in recent decisions. On 1 March 2023, the ASA ruled that an advert by Lufthansa with the phrase ‘CONNECTING THE WORLD. PROTECTING ITS FUTURE’ over the image of a plane and the globe, constituted misleading advertising. The ASA considered that a consumer would interpret the advert as an environmental reference to how Lufthansa’s business was “protecting the future of the world”. Although Lufthansa had commenced environmental initiatives, including aspirations to become carbon neutral by 2050 and to halve its carbon emissions by 2030, the ASA found that the advert did not adequately substantiate their claim of protecting the Earth’s future.  

Competition and Markets Authority

Meanwhile, in January 2023 the Competition and Markets Authority (CMA) launched an investigation into the environmental claims made about essential household items or ‘fast moving consumer goods’ (including food, drink, cleaning products, toiletries and personal care items), and whether such claims comply with consumer protection law. The CMA has identified what are described as “problematic claims” including vague and broad statements relating to the sustainability of a product, its recyclability and misleading claims about the use of natural materials.

The market in household essentials is huge. The CMA estimates that shoppers spent in excess of £130 billion on them in 2022, including on food and drink, cleaning products and personal care items. According to the CMA, significant numbers of household products are already marketed as environmentally friendly, including up to 91% of dishwashing items and 100% of toilet products.

Therefore, the outcome of the CMA’s investigation into the ‘greenwashing’ of household essentials will be critically important to traders operating in this sector, and is likely to have far reaching implications for the marketing of household essentials.

Proposed Directive on Green Claims

The European Commission (EC) has also intensified its involvement in regulating environmental claims. On 22 March 2023, the EC launched a proposed ‘Directive on Green Claims’, which sets minimum requirements on how traders must substantiate “explicit environmental claims” about their products, as well as the communication of such claims and provisions on environmental labels.

The key goal of the proposed Directive is ensure that consumers are protected and empowered to make informed choices in the context of the green economy, particularly on purchasing decisions.

Summary

Overall, businesses which are operating in the environmental space should be even more vigilant as to the substance of their marketing activities. Competition based on the environmental qualities of products is high, and with it comes the risk of consumers being misled as to whether or not such products are environmentally friendly or not. Likewise, given the growth in the green economy, businesses will be conscious of the need to command and retain consumer confidence in their green claims. In this context, the recent regulatory and investigatory initiatives by the ASA, CMA and EC are to be expected, and businesses should adapt their strategies so as to engage with these developments. The need for environmental marketing – particularly absolute green claims – to be substantiated with evidence, will be essential in the current and future regulatory climate.