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Too green to be true? Managing green claims risk and advertising quandaries that aren't going away

30 December 2021

At our recent roundtable, a group of consumer sector advertising stakeholders and in-house counsel considered the challenges which are here to stay and discussed how they approach the different issues of environmental claims and dealing with influencers across different sectors and retail categories.

Environmental claims

With the Competition Markets Authority publishing its "Green Claims Code", COP26, having just finished and ESG at the centre of every business' priorities, it was a good time for a discussion around green claims, to share thoughts and spend time with others who know the reality of putting regulatory compliance into action.

As business is pressed to act more sustainably and in a more environmentally friendly manner, it is inevitable that businesses will wish to communicate these efforts to customers. Doing that is understandable but fraught with difficulty, not least as claims that appear true when zoomed in and focussed on a particular aspect, may not be reflective of the wider impact of the product. Or, efforts to improve recyclability are hindered by inconsistency of plastics that are collected kerbside and are domestically recyclable. Or, that the balance to be struck between two different types of packaging is far more nuanced than a superficial analysis would suggest.

"We all understand that you can't mislead. But we need practical examples of the standards required in order to meet x,y,z."

The lack of standardisation of environmental claims such as "sustainable", "green", "zero carbon" makes it difficult for businesses to know how to make claims, particularly for smaller businesses. Participants called for greater clarity on what these claims mean and how they can be substantiated. However, those in the session who were familiar with food advertising requirements for nutrition and health claims were not in favour of it going as far as introducing an "environmental claims register" to mirror that regime as it just results in homogeny and a very restrictive approach by regulators.

The Green Claims Code isn't law of course, it's the CMA's guidance on how it interprets the law (the Consumer Protection from Unfair Trading Regulations 2008 and Business Protection from Misleading Marketing Regulations 2008) when it comes to environmental claims on goods and services. In a nutshell:

“Misleading environmental claims occur where a business makes claims about its products, services, processes, brands or its operations as a whole, or omits or hides information, to give the impression they are less harmful or more beneficial to the environment than they really are.”

We didn't really need guidance to tell us this.

"It's not just about the product itself, it's about the full lifecycle. Be honest and repeat. Breakdown what that actually means"

One area that our clients frequently struggle with is how to approach claims when there has been a significant innovation or change for part of the product, particularly packaging that they wish to talk about. However, considering just that in isolation ignores the wider impacts of the product and its production. It is not good enough that the claim in strict isolation is true, if it creates a misleading impression around the rest of the product.

Participants in our round table discussed how to successfully bring marketing teams along with regulatory requirements. "Be honest and repeat" was a key takeaway. The need to impress the point that just because another company is making a claim, doesn't mean that the claim is either "okay" in general or suitable for use with another company's products was also raised in the discussion, along with the point that marketing claims must align with wider corporate activity on ESG.

"You need to substantiate pledges as you go"

Staying with the theme of ESG we considered how corporate pledges sit within the different types of communication. For example, investor relations materials won't be caught by the Advertising Standards Authority but environmental pledges repeated in advertising will be covered. You can make a pledge or a ten year plan, but pushing it out in marketing communications to consumers will mean that you will need to be able to substantiate it as you go and ensure that you can show that they are working towards it.

"We have to balance commercial with ad requirements. For smaller brands it's prohibitively expensive to provide testing etc."

The limitations of what a smaller supplier can put together in terms of evidence means that the claims available to them are also more limited. Choosing the right claim based on the available evidence is vital.

More on this topic…

For more on managing advertising quandaries that aren't going away, read this related article, where our experts consider how to manage influencer advertising and approaching the challenges arising across sectors and retail categories.

Looking forward

Doing the right thing environmentally is not just good for business, it is good business. Less packaging means lower production costs, lower masses to be transported and of course less environmental impact.

2022 is going to produce more environmental regulation and business will continue to want to talk about it.

We encourage balance, as doing the right thing and talking about it in the right way is difficult. And this is not just for businesses but for enforcement bodies as well, we discussed how even things that look black and white, such as businesses claiming to be aligning to government schemes when that is not the case can turn out to be more complicated.

If you want to discuss green claims, your advertising or the underlying compliance of your products, please get in touch with one of our experts listed below.

Further Reading