As consumers become more aware of environmental issues and sustainability, brands may be increasingly tempted to make claims in their advertising about the green credentials of their products or business. We look at how the regulators are taking an increasing interest in environmental claims, and what you need to do if you want to include green claims in your marketing.
Environmental claims in advertising are the subject of regulation by both the Competitions and Markets Authority ("CMA"), and the Advertising Standards Authority ("ASA"). The CMA is in the process of finalising its investigation into how to protect consumers from vague, false or misleading environmental claims. That report is expected in autumn 2021 and we will issue further commentary once that report is released.
Increased consumer focus
Supporting environmentally-friendly businesses has become very important to consumers. According to a joint study by IBM and the National Retail Federation, 57% of all consumers are willing to change their purchasing habits to reduce their negative environmental impact. There is a financial incentive for businesses to market products as environmentally-friendly, and it is important that they do not take advantage of this by making fraudulent or misleading claims.
Overview of the ASA and the Codes
In the UK, the ASA enforces rules for both broadcast and non-broadcast advertising. The ASA is independent of both government and industry. Its role is to enforce the British Code of Advertising, Sales Promotion and Direct Marketing (the “CAP Code”) and the Broadcast Committee of Advertising Practice Code for Broadcast Advertising (the "BCAP Code"). The Codes are framed to ensure that advertisements are “legal, decent, honest and truthful and do not mislead, cause harm or serious or widespread offence.”
Enforcement of the Codes are undertaken by the ASA. The Codes do not create legally binding obligations and therefore, the ASA does not have competence to compel an advertiser to comply with its requests such as to withdraw or amend an offending advertisement. However, there are a range of sanctions that the ASA can apply to those who fail to comply with the Codes, namely: withdrawal of trading privileges; refusal of advertising space; negative publicity; and in cases of persistent of serious breaches, the possibility of making a referral to enforcement agencies to raise legal proceedings.
The Codes and environmental claims
The Codes contain general rules applicable to all marketing, such as the requirement of "substantiation" (that businesses must hold documentary evidence to prove their claims). The Codes also contain rules specifically regarding environmental claims in advertising. Broadly, they are that:
- environmental claims must be clear and not misleading;
- absolute claims require a very high degree of substantiation, while relative claims can be justified by demonstrating that one product has a total environmental benefit compared to another;
- a claim cannot be presented as universally accepted if informed opinion is significantly divided; and
- it is misleading to make a claim that is not actually unique or noteworthy within the industry (like highlighting the absence of a harmful ingredient which is not used because it is illegal).
Environmental claims and recent ASA rulings
Based on our review of recent rulings, it is clear that the ASA applies a robust and careful scrutiny of any environmental claims presented by companies when advertising their products or services.
This scrutiny has been consistently applied across multiple industry sectors. For example, a Ryanair advert claiming 'low CO2 emissions' was found to be misleading on the grounds that the claims lacked appropriate substantiation.
Reflect on recycling claims
Advertisers must exercise particular caution around the use of recycling claims. A recent ruling on Lucozade Suntory demonstrated the importance of ensuring that adverts do not mislead the public as to the extent to which a product is capable of being recycled.
Whilst the ASA found in favour of Lucozade Ribena Suntory, this ruling provides a useful example of the level of scrutiny applied by the ASA to adverts that present a positive environmental message. In this case, the company had to demonstrate that all components of the product bottle i.e. the label, the bottle and the bottle top were all capable of being recycled.
Ultimately, if a marketer claims that their product is 100% recycled then it really must be 100%.
Five points to consider before making environmental claims
Before making an environmental claim to advertise your business or products or services, you should:
1. Stay factual and be mindful of evolving scientific opinion: Ensure that your environmental claims are truthful and not misleading. Do not exaggerate or treat opinion like fact. Ensure your environmental claims are based on up-to-date information, and be careful if basing claims on new developments where there is no scientific consensus.
2. Be ready to substantiate: You may be called upon by the ASA to prove that your claim is true. You should keep documentary evidence to back it up.
3. Limit absolute claims: It is much harder to substantiate an absolute claim like "environmentally friendly" than it is a relative claim, like "environmentally friendlier than the old formula".
4. Be careful of comparative claims: The CAP Code requires that comparisons with identifiable competitor products “must objectively compare one or more material, relevant, verifiable and representative feature of those products". With reference to environmental claims, words such as ‘greener’ or ‘friendlier’ will require verifiable evidence that proves an environmental benefit over comparable products.
5. Err on the side of caution: Anyone can complain about your advertisement to the ASA for free. This makes it an easy and accessible tool for environmental campaigners to take action. If you have any doubt about an environmental claim in your marketing, take advice before running it.