The short answer is: a lot more Advertising Standards Authority (ASA) rulings against green claims, until advertisers start including much more information within ads that make environmental claims. Additionally, empowered Competition and Markets Authority (CMA) is not taking a less relaxed approach. In this article, we focus on the three key trends for ASA rulings and ponder whether this is an area in which Tom Fishburn's well-known 2011 cartoon 'this is our compromise with legal' has a real prospect of coming true.
For more insights also see our Global Consumer Trends 2024 article 'The DMCC – potential game changer'.
Be careful what you wish for – proactive monitoring to continue apace
For years stakeholders complained the ASA needed to be more proactive. That it should not rely on consumers and competitors complaining, and should find ways to level the playing field. Over the last few years the ASA has started to do just that and has used its Active Ad Monitoring (AAM), which applies AI to flag online ads that potentially breach the rules to a variety of hot topics, including green claims. As a consequence, Autumn '23 saw several investigations on ads, that were raised this way, concluded.
This means that when assessing risk of complaint about an online ad, any previous tendency to rely on what will catch the eye of a consumer or agitate a competitor should be reconsidered. AAM has the potential to review ads at vast scale and is certainly identifying claims which would probably have been subjected to greater scrutiny if considered for a TV ad, but might have been considered lower risk for detection online. Unsurprisingly, we have not seen a ruling go the way of the advertiser when it has been picked up by AAM. Therefore, just as the focus on green and sustainable claims has increased, so did the risk of detection and the upheld rulings since use of AAM also increased, thus changing the risk dynamic.
It is also worth bearing in mind that rulings are still being published against ads where the advertiser admitted the media didn't allow for the right amount of information to be included and proactively removed the ad –for example, Lufthansa removing "fly more sustainably" claims from paid for search ads. This indicates a push for published 'precedent' and perhaps fewer informal resolutions within this sphere, which is another risk to consider.
Battle of the evidence – be prepared on all fronts
In the wake of the challenges from the nutrition and health claims rules, the EU decided against a register of authorised environmental claims. However, it has essentially returned to this thinking with pre-approval being necessary for a number of claims, as changes to consumer law focus on in this area. The structure of green claims in UK ads looks like it is going towards familiar territory: general claim, immediately accompanied by specific statement about the basis of the claim, linked to further information and a caveat that provides numerical data about non-environmentally friendly activity the company may be undertaking. Still, what evidence will be accepted remains a very grey area.
The ASA's CEO made it clear at last year's "Greenspeaking with confidence" event that the ASA is actively seeking to "wean" advertisers off general environmental claims, and also that when it comes to environmental claims – the ASA considers everyone to be vulnerable consumer. This is a key interpretation point because framing the average consumer of an environmental ad as vulnerable means that, whilst the average consumer test requires that claims are reviewed through the eyes of someone who is "reasonably well informed, reasonably observant and circumspect", the ASA can consider that additional information is necessary. The background to this is the concept is that consumers, wishing to do their bit for the planet, will be more credulous rather than less and therefore misleading claims are more likely to distort economic practices. ASA research into consumer understanding of claims such as "net zero" and "biodegradable" has supported this position.
Advertisers are going to need to hone in on what exactly they want to say. This means ensuring precision is applied when connecting the substantiation to the claim, using a worst-case scenario basis for the potential interpretation of the claim. Success isn't guaranteed because the guidance says 'be precise and make narrow claims' and the rulings reveal something else. However, at least this way consumers are, from a practical perspective, given the information.
Claims beyond the ad – look beyond the copy
The refrain has always been that the context is key: what is meant by the claim in the context of the ad as a whole and the information provided within in it. However, the trend that has gathered pace throughout 2023, since first coming to the fore in late 2022's HSBC ruling, is the introduction of misleading omissions based on what at best might be called implied claims relating to the company's wider activities. The HSBC ad about making funds available for green lending was found misleading because it did not state that HSBC also lends money to carbon negative businesses, despite it not being stated or implied that it was the case. This has resulted in a question about who is the average consumer for these ads and what do they really understand. Clearly, all ads intend a positive impression of a brand, but just as brands convicted of safety offences are not prohibited from talking about being a great place to work, without stating convictions, a different set of rules is being established for green claims and the concept of "well-informed".
The ASA considers that the average consumer would know that a mollusc based brand is a petroleum company, but concluded that they wouldn't understand an ad about its renewable energy division in the Bristol area to be transitioning away from higher-carbon products and services. Therefore ruling the ads misleading, despite the claims being demonstrably true. ASA concluded consumers would be misled by ads which misrepresented the contribution that lower-carbon initiatives played, or would play in the near future, in light of the overall balance of a company's activities.
We know this trend will continue because one of the last rulings of 2023 made it clear that "we also undertake non-environmentally friendly activities" catchall caveat will not be enough. A press ad for an energy supplier stated:
“Wind, oil, gas, carbon capture […]” and “IT’S ALL PART OF THE BROADER ENERGY PICTURE”. A footnote at the bottom of the ad stated “Equinor has been delivering energy solutions to the UK for 40 years, and we are now working to help the UK achieve a smooth energy transition […] we’re producing the oil and gas the UK needs now; and will be powering millions more homes with wind, capturing and storing carbon safely […]. It’s broad energy for a brighter future”.
The ASA ruled it misleading for not being clear on exactly what proportion of energy was from each source and that further information about the overall proportion of Equinor’s business model, that comprised renewable energy, carbon capture and storage, was material information that should have been included in the ad.
While the ASA has been at pains to state that it does not want to stop advertising, just stop misleading advertising, it is becoming increasing difficult to see how to navigate this safely. This is reaching the point where another bank, presumably scarred by the HSBC ruling, was advertising online through a block of text reading: 'society is transitioning to a low-carbon economy. So are [our] clients, and so [are we]. The bank finances a lot of sustainable activities, but still finances more that's not.' The entire ad on a news site was just this text on a coloured background with the company logo. We would hope that this ad is unchallengeable, but is this really what the ASA expects of compliant and balanced ads in 2024?
The ASA cannot mandate that certain information is included in an ad. However, it can keep hammering home the same point in its rulings until the ultimate effect is the same. We have seen it before with identifying content as commercial. For all that, context is key and other labels may be available, the only way to be sure is to use "#ad" at the front of a post. The ASA will not specifically tell advertisers what to put in an ad with environmental claims, but it is going to keep picking up general and aspirational claims upholding for lack of material information. Subsequently, this can keep happening until the entire landscape of environmental claims changes, notwithstanding what an average consumer should know.
Conclusion
There is a reward to be had, which is that the more clear and accurate information is provided to consumers, the better informed they become. The key to ensuring this is cross-functional, collaboration across teams and getting regulatory and compliance colleagues involved as early as possible will be crucial. In a nutshell:
- Develop the headline claim with the body copy and small print in mind from the beginning.
- Stress test the claim from every angle.
- Think of the worst-case scenario interpretation.
- Assess the context of the business as a whole.
- Consider the reputation of your sector.
- Include qualifying information with specific data points wherever possible.
- Don't shy away from the detail – it may not be marketing friendly, but it is risk adverse.
If you have any questions or would like to discuss any of these topics and what they mean for you and your business, please get in touch with our Consumer sector and Product Advertising and Marketing experts.
