Running the rule over green claims
As environmentally friendly products become more important, marketing around green claims will become more closely regulated, say Grant Strachan and Martin Sloan
As the UK looks to transition to a low carbon economy and consumers become more environmentally conscious, there is a growing incentive for businesses to accentuate the purported green credentials of their products.
With a recent Competition and Markets Authority (CMA) study showing 40 per cent of websites deploy potentially misleading environmental marketing tactics, regulators are determined to ensure the accuracy and fairness of environmental or 'green' claims made in advertising. Last year, the CMA launched an investigation and consultation into how consumer protection legislation can be better harnessed to prevent false or misleading green claims. New guidance is now available, to help businesses better understand and comply with existing consumer protection legislation.
So what exactly is a 'green claim'? It's the suggestion that a product, service, brand or business is good for the environment or less environmentally damaging than competing goods or services. These claims are regulated bythecmaandadvertisingstandards Authority (ASA). The CMA is responsible for enforcement of UK consumer protection legislation like the Consumerprotectionfromunfairtrading Regulations 2008 and the Consumer Rights Act 2015, and the ASA for regulating advertising in the UK through the non-binding Code of Non-broadcastadvertising,salespromotionand Direct Marketing and Code of Broadcast Advertising (collectively known as 'the codes').
Inadditiontocompliancewiththose regimes, businesses may also have to follow sector or product-specific requirements relating to particular goods or services; for example, energy labelling requirements for certain household appliances.
There are six guiding principles for business to be aware of:
Claimsmustbetruthfulandaccurate: Evenfactuallycorrectclaimsmustnot give an inaccurate overall impression. Absolute claims must be supported by a high level of substantiation. The rationale is that such claims are more likelytobeinaccurateandmisleading, and claims must not suggest environmental characteristics which are, in fact, standard features.
Claimsmustbeclearandunambiguous. They must be worded in a transparent, easy-to-understand manner not likely to confuse consumers.
Claims must not omit or hide important relevant information. Claims should not 'cherry-pick' information byfocusingononefeatureandleaving out other relevant features. This overlaps with the next principle:
Comparisonsmustbefairandmeaningful:thisrequirescomparisonswith other products or services to be based on clear, objective criteria.
Claims must consider the full life cycle of the product: The environmental impact of the product or service across its lifecycle should be considered, including supply chain and disposal.
Claims must be substantiated: Businesses should have scientific or other factualevidencetosupportclaimsand prove they are true.
The guidance goes on to detail each principle and provide illustrative examples and case studies – particularly helpful for businesses to use as a compliance reference guide.
The codes' specific rules on environmental claims have also clearly influenced the CMA'S draft guidelines in terms of the importance placed on the environmental impact of the full life cycle of an advertised product; absolute claims requiring a higher degree ofsubstantiationandhighlightingany environmentalimpactoffeaturesthat are, in fact, industry standard, is misleading.
Being authentic in claims about services or products is part and parcel of
what it means to be a responsible and sustainablebusiness–somethingwe'll discuss with businesses at our online foodanddrinkconferencenextmonth. As environmentally friendly products become more important to consumers, it is to be expected that marketing aroundgreenclaimswillbecomemore closely regulated.
Grant Strachan is Senior Associate and Martin Sloan is a Partner at Brodies LLP