Greenwashing: Don't Get Caught Out - ThinkHouse (Video)

• Published date: 29 November 2021
• Subject Matter: Anti-trust/Competition Law, Environment, Consumer Protection, Media, Telecoms, IT, Entertainment, Antitrust, EU Competition , Environmental Law, Consumer Law, Advertising, Marketing & Branding, Dodd-Frank, Consumer Protection Act
• Law Firm: Gowling WLG
• Author: Mr Dan Smith, Kate Hawkins and John Coldham

Environmental and sustainability claims have been high on the agenda for many businesses for some time now, and with the Competition and Markets Authority's (CMA) recent introduction of its Green Claims Code, it's even more important that businesses get it right and avoid exaggerating their environmental credentials.

Advertising experts Dan Smith and Kate Hawkins highlight some of the key factors to consider when making environmental claims in advertising. They also provide an update on notable Advertising Standards Authority (ASA) action taken this year and draw out learnings from key adjudications.

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Transcript

John Coldham: Welcome to this webinar my name is John Coldham and I am Head of Brands and Designs here at Gowling WLG. Thank you for joining us.

The question most companies find themselves being asked at the moment be that by their employees, regulators, shareholders, customers or even business partners is 'Are you doing your bit to help the environment' and the good news is that many companies are indeed trying to work towards a more sustainable way of doing business. Some more actively than others it has to be said but there is no doubt that the push towards being environmentally responsible is only going to increase. The clamour for everyone companies included 'Do the right things' is getting louder and louder as the urgency for action to be taken grows more acute. Many companies have responded to this question by trying to demonstrate how they are growing more sustainable, be that through information on their websites or corporate materials or through promoting the steps they are taking more actively with advertising and marketing. The danger for companies in this position is how far to go. Spend more time and money claiming to be green than actually implementing business practices that may be to actually be green and you might face accusations of greenwashing. This affects every industry and I am pleased to say that I am joined by my colleagues Dan Smith and Kate Hawkins to guide you through this topical issue and they advise that on this day in, day out. Dan is our head of Advertising and Marketing Law and Kate Hawkins is a Senior Associate in our team who works very closely with Dan.

If you have any questions as we are going along please do pop them into the Q&A box and we will try to answer them at the end. We have allowed some time for questions but if we do not get to your question we will follow up with you afterwards.

Now my role here is to make sure the slides work so wish me luck as I transfer over and otherwise I will handover to Daniel.

Dan Smith: Okay! Hello everyone! So this is not a new issue. I remember doing a talk almost 15 years ago now featuring an oil company advertisement showing a power station spewing out flowers instead of emissions. That advertisement and the complaint that followed it had many of the same elements we see in green claims issues today. A basis in truth, so the company was using some waste carbon dioxide to grow flowers. A marketing team then overreached using language that could imply that all waste carbon dioxide was used in that way. And a complaining group scrutinising that advertisement alleging greenwash and complaining to the Regulators. So it is not a new thing but it is a uniquely sensitive area, so with the COP26 summit in Glasgow climate concerns have never been closer to the forefront of so many peoples minds and as concerns grow the evidence shows that some people out there at least are prepared to pay extra for products and services with stronger green credentials or which cause less harm. Business want to attract those customers, while at the same time feeling under pressure more generally to sell a story about how they are reducing their environmental impact, and that has led to a swell of environmental claims across all media, from webpages under the heading of 'sustainability' for a consumer or a business audience to on pack messaging about recycling, television advertisements making carbon neutral claims etc. etc. Green claims have never been more widespread, I am seeing that in work that comes across my desk, so taking just one industry as an example of that, the car advertisements we used to see were all about speed and power now they are all about zero emissions, they are about electrical vehicles claims range charging, those kind of issues. And we are also seeing it with the Regulators so during the pandemic the Advertising Standards Authority (ASA) had to prioritise its workload and the number of rulings was down across a number of areas but going against that more general trend we saw a continuing stream of rulings on environmental claims and alleged greenwash, and complaints which would previously have been rejected were dealt with informally we are now seeing those go through to formal rulings. A little later we will look at an adjudication hot off the press from today were in essence the complaint simply alleged that it was irresponsible to show a Land Rover in a forest.

So what are we going to look at today? We are going to run through the new green claims code which has been published in last couple of months by the Competition and Markets Authority (CMA) and alongside that we are going to consider the approach of theASAand since they apply similar principles, theASArulings are public and they are available for us to learn from, we are going to use thoseASAadjudications to illustrate the guidance in the green claims code. I am conscious that we have a lot of different industries in the audience today and while the principles are around the use of green claims are the same the practical application can be very different. We obviously have to keep the content of this webinar broad but we have looked to include a very wide range of examples. I think we have everything from goldmining to dog excrements and I challenge you to go any broader than that. Please do also feel free to ask questions in the Q&A and if you would be interested in a more bespoke workshop style session focused on your business or your particular industry then just let us know.

So the green claims code - How did this come about? The Competition and Markets Authority as part of its involvement with ICPEN which is an international network of consumer protection enforcement and authorities conducted a website review so it went out there, looked at a whole bunch of websites, and it assessed the green claims made on those websites to see whether it thought they were likely to be problematic and what it found was quite startling in a way. So four out of ten green claims made online theCMAfound could be misleading consumers and that is just on the face of those claims, obviously theCMAdid not delve into the supporting evidence behind those claims. And the kinds of issues they were finding so vague claims and unclear language, terms such as eco or sustainable, so I mean that is one of the biggest issues for me that you will look at green claims contents, you will look at webpages and it will present the product of a surface as a whole as sustainable and the basis for that will be something much more specific about just one aspect of the product. It found own brand eco logos and labels essentially posing as kitemarks so appearing to be from a third party organisation but in fact having been created and designed by the advertisers own creative teams. And it found that businesses were hiding or omitting information such as a products pollution levels to appear more eco-friendly. Now that is no surprise! That is what marketing teams do, that is what they are there for, they are there to paint the benefits of choosing a particular product, they are not there for or they have not in the past been there for presenting a holistic view of the product warts and all, and what the Competition and Markets Authority's doing and what they seem to have found is starting to challenge that. So, the Competition and Markets Authority have come out with the new green claims code. Now the good news about that is that its contents should be quite familiar to you if you are already familiar with the ASA's rules around green claims for example. The bad news is that this kind of initiative where guidance goes out to business tends to herald a crackdown on more problematic claims and indeed that is explicitly what the Competition and Markets Authority have said so they are to carry out a full review of misleading green claims early in 2022 and stand ready to take action against offending firms.

Very briefly let us run through the status of the green claims code its practical guidance. It is very readable, it is chocked full of examples is well worth taking a look at. But it flows from the underlying laws on misleading advertising and misleading emissions etc. under the Consumer Protection from Unfair Trading Regulations or the business protection for Misleading Marketing Regulations. So there is guidance but it is underpinned by law and where a business does not follow the principles theCMAmay have said that those claims are more likely to attract their attention. Undoubtedly it will also influence the other Regulators as to when and where they chose to take enforcement action so Trading Standards for example and the ASA.

What is an environmental claim according to the code? Well it is as you would expect. It is a claim that a product or a service has a positive environmental impact or no impact on the environment, is less damaging than it was before, or is less damaging than the competition. Important to note that environmental claims can appear in any media so we still have the occasional view that this kind of content is more editorial in nature, it is PR and therefore it is not subject to regulatory oversight or it is not within the remit of theASAfor most of your businesses contents that you are putting out about sustainability, about environmental performance is going to be covered...