Going Green – Advertising and Marketing Environmentally Friendly Products and Services

Background

The Committee of Advertising Practice (CAP) is responsible for creating and enforcing a number of codes on advertising, including the UK Code of Non-Broadcast Advertising, Sales Promotion and Direct Marketing (the CAP Code). The UK’s advertising regulator, the Advertising Standards Authority (ASA),  is responsible for administering the advertising codes prepared by the Committee of Advertising Practice (CAP), including the UK Code of Non-Broadcast Advertising, Sales Promotion and Direct Marketing (the CAP Code). When applying the CAP Code, the ASA takes into account the Code’s general principles, that all adverts should be:

• Legal
• Decent
• Honest
• Truthful
• In line with the principles of fair competition

Environmental claims

In addition, there are specific rules in the CAP Code for making environmental claims about a product or service:

• The basis of environmental claims must be clear. Unqualified claims could mislead if they omit significant information.
• The meaning of all terms used in marketing communications must be clear to consumers.
• Absolute claims must be supported by a high level of substantiation. Comparative claims can be justified if the product provides a total environmental benefit over your previous product or a competitor’s product.
• You must base environmental claims on the full life cycle of the product, unless the marketing communication states otherwise, and must make clear the limits of the life cycle.
• You must not suggest that your claims are universally accepted if there is a significant division of informed or scientific opinion.
• If a product has never had a demonstrably adverse effect on the environment, marketing communications must not imply that the product has been improved so as to not adversely impact the environment. However, you may claim that a product has always been designed in a way that omits an ingredient or process harmful to the environment.
• Marketing communications must not mislead consumers about the environmental benefit that a product offers. For example, you should not highlight the absence of an environmentally harmful ingredient that is not ordinarily found in competing products or an environmental benefit that is required by legal obligation where competing products are also subject to that obligation.
• For certain products, marketing communications and labels must also include energy-related information, information on the consumption of energy or price information.

Greenwashing

“Greenwashing” is where a business makes environmental claims about their products or services which breaches the CAP Code. If the ASA finds that you have “greenwashed” a product or service, they may request that you change or withdraw the advert, disqualify you from media awards or ask the CAP to inform its members of the breach, which may result in the CAP refusing to give you advertising space, pay you commission or allow membership of a trade association. Because the ASA publishes its findings online, you may also suffer reputational and sales consequences, as shareholders and consumers are increasingly conscious of green issues. In exceptional circumstances, the ASA may refer the matter to the National Trading Standards Board, who, in conjunction with local authorities’ trading standards, can take enforcement action against you, including civil sanctions and prosecution for continued breaches of consumer law.

To help businesses avoid “greenwashing”, the ASA has produced a useful checklist for those wishing to make green claims about their products or services:

• Get your facts right. Do not exaggerate the environmental benefits of your product.
• Back up advertising claims with documentary evidence.
• Do not present claims as being universally accepted if the science is inconclusive.
• Do not use pseudo-science or terms that are not generally understood by your readers.
• Avoid sweeping and absolute claims such as “environmentally friendly” or “wholly biodegradable”.
• Only say something is “locally” produced if it is. Shipping goods from abroad or the other end of the country does not make them “locally sourced”.

New guidance

The Competition & Markets Authority (CMA), which shares certain consumer protection functions with the ASA, published draft guidance on environmental claims on goods and services on 21 May 2021. The CMA has stressed that the principles in the guidance are intended to be consistent with the CAP Code. As such, the CMA’s draft guidance should not be read as overwriting the CAP Code, or as an alternative to the ASA’s existing guidance, but simply as an additional aid for you to make use of when making environmental claims about your products or services.

The CMA’s draft guidance sets out six principles for businesses making environmental claims. Such claims must:

• Be truthful and accurate. The claims must not state or imply things that are factually incorrect or untrue, nor should they overstate or exaggerate sustainability or positive environmental impact.
• Be clear and unambiguous. Claims should be worded in a transparent and straightforward manner, so that they can easily be understood; scientific and technical language should generally be avoided.
• Not omit or hide important information. Claims must not prevent someone from making an informed choice by omitting material information.
• Only make fair and meaningful comparisons. Any products to which a comparison is made should meet the same needs or be intended for the same purpose as the product about which the environmental claim is made.
• Consider the full life cycle of the product. The overall impact of the product or service on the environment must be considered and focusing on one potentially misleading aspect should be avoided.
• Be substantiated. It should be possible to support any environmental claims with robust, credible, and up to date evidence.

The principles from the CMA’s draft guidance clearly have some overlap with the CAP Code, and should also be taken into account before making a green claim about a product or service. The draft guidance also has some case studies, which provide useful illustrations of what environmental claims may or may not amount to an infringement of consumer protection law. Where infringement is found to have occurred, the CMA may take civil action or pursue criminal prosecution.

If you have any questions arising from this article or would like to discuss environmental claims about your products or services, please contact Cathrine Ripley or one of the other members of FSP’s Commercial & Technology team.