Don’t breach climate change advertising rules
Businesses that fail to ensure that any “green” claims made in advertising can be substantiated are likely to breach UK advertising regulations and could result in reputational damage.
Using green credentials as a marketing tool is entirely legitimate, provided those credentials are genuine and can be shown to be so, but UK advertising regulations seek to prohibit unfounded or ambiguous green claims, known as “greenwashing”.
The need to be aware of compliance obligations is becoming more important as consumers are becoming increasingly conscientious around climate ch nge and sustainability, with environmental considerations often affecting purchasing decisions.
Another related concern for small and medium enterprises and start-ups in this space is that the increased scrutiny may not just come from regulators. Some investors have indicated they will only invest in providers of green technology that are able to provide scientific evidence.
A recent study of 1,500 UK consumers between the ages of 16-44 found that seven in ten respondents said they would be more likely to purchase a product that included details of its positive environmental impact. The consumer study found that a quarter of consumers see advertising as the measure of a product's positive environmental impact, with 17 per cent looking to influencers as reinforcement of those credentials.
During a period of economic uncertainty, businesses can be tempted to try and stand out in a crowded marketplace by highlighting their “green” nature.
Advertising is self-regulated in the UK and adjudicated on by the Advertising Standards Authority (ASA) with reference to advertising codes – the Cap code and Bcap code that cover non-broadcast and broadcast advertising respectively.
Typically, the ASA will investigate adverts as a result of a consumer or competitor complaint. However, the ASA may also choose to investigate an advert it considers to be in breach of the code. A regulator-initiated investigation is more likely in circumstances where the subject matter is sensitive, such as adverts relating to Covid-19.
Once the ASA has investigated an advert, if the matter is not resolved informally, it is ruled on by the ASA Council. In the event that the ASA Council decides that an advert is in breach of the relevant code, the advertiser will be asked to amend or remove the advert. Failure to comply may result in a referral to Trading Standards.
The key to advertising regulation compliance is substantiation: if you can provide evidence to support the green claims you are making, then you have a basis to make them. Advertisers will need to possess robust or fulsome evidence, particularly in relation to broader claims about “sustainability” or similar. Better still, independent third-party evidence to verify claims can be extremely useful.
On the issue of the efficacy of substantiation, the European Commission has recently published a proposal for new legislation that could require advertisers to use approved methodologies for calculating the environmental impact of certain products and services. This could be a significant change for some advertisers who may have been relying on internal evidence and methodologies to substantiate claims to date. A proposal is expected in early 2021.
Gill Dennis, senior practice development lawyer at Pinsent Masons