Green claims in advertising are increasingly prevalent, as companies seek to demonstrate their environmental credentials to consumers who are looking to buy from brands that they see as aligned with their values. That prevalence is prompting the global advertising industry and many national regulators to better define what a good green claim looks like and to introduce tougher measures to prevent ‘greenwashing’.
In this context, the H+K’s Better Impact team recapped ASA case histories and highlighted 5 recent rulings and the precedents that should be noted by brands looking to demonstrate their sustainability credentials.
Key principles for avoiding greenwashing remain the same.
If the ad/campaign makes the brand sound like it is doing more for the environment than it actually is, then it is likely greenwashing. When making claims, brands should consider the full lifecycle of the product (avoiding absolute or vague claims), ensure the basis of claims is clear to consumers, and provide an accurate overall picture of the brand’s role in environmental activities to avoid misleading by omission. For more details, see the latest guidance released by the ASA (updated June 2023).
Brand behaviour needs to support brand claims.
In rulings announced in June 2023, the ASA arrived at different conclusions for Anglian Water and Severn Trent Water, who both ran similar ads that sought to demonstrate their environmental credentials. Customers raised complaints against both ads for misleading by omission for failing to mention the water companies’ role in sewage pollution. In their ruling, the ASA highlighted the 2021 Environmental Performance Assessment (EPA) of each brand. As Anglian Water had a low EPA score, the complaints were upheld and the ad was banned; Severn Trent’s ad was not, because of its higher EPA score.
Looking to the future of regulation, change is inevitable.
Case histories will set new precedents and regulations will evolve as governments seek to respond to pressure and regulators determine their mandates in line with the drive towards Net Zero. French regulators are leading the way, and France is looked to by many regulators (including the UK) as an example to follow.
In the EU, the Green Claims Directive (expected to come into effect by 2024) will require environmental claims to be backed by scientific evidence. The UK Government is also planning to change the CMA’s market study/investigation powers, including imposing penalties for non-compliance with CMA orders. The ASA will begin to focus more on claims made by the food and dairy sectors, highlighted – alongside energy and transport – by the UK Climate Change Committee as a high emitting sector.
Greenwashing risks go beyond regulation alone.
Brand claims are scrutinised by a wide range of stakeholders, including customers, investors and employees, and there are many examples where brands have received public backlash and eroded consumer trust, even if they haven’t broken any regulatory rules (e.g. Gender Pay Bot).
Green-hushing – or deliberately staying silent on environmental initiatives to avoid scrutiny – is not a solution.
Firstly, staying silent slows the pace of progress towards Net Zero by removing the incentive for other brands to adopt more sustainable practices and creating an environment for climate misinformation to thrive. Secondly, it represents a missed opportunity for businesses, who will lose out on sales to the growing number of consumers looking to purchase from brands aligned with their values.