Laura Harper and Irem Tarasek spotlight the New Green Claims code due to be published by UK's Competition and Markets Authority by the end of September

Did you know a recent analysis of websites found that 40% of green claims made online could be misleading?

The world and its climate is changing. So is consumer behaviour and sentiment. We have experienced the direct impact of the global environmentalist movement in marketing trends. Consumers are being fed more and more ‘green adverts’ backed with ‘environmental claims’ which can present positive opportunities for brand awareness alongside the potential for negative impact where the reliability of these claims is questionable and adverts are withdrawn. UK regulators are taking an active role in monitoring sustainability claims in advertising as well as working together to revise the current regulatory regime.

For the Advertising Standards Authority and Committee of Advertising Practice, a primary focus for 2021 continues to be their Climate Change and the Environment project, an opportunity to take stock of the rules regulating environmental claims and contribute to the work of the UK Competition and Markets Authority, who in the next 4-8 weeks will unveil a final version of  consumer protection law guidance for all businesses making environmental claims, known as the Green Claims Code.

Depending on the type of product being advertised, as well as CMA, ASA and CAP guidance on environmental claims, businesses may also need to be aware of relevant guidance from government departments such as Defra and sector specific guidance issued by regulators e.g. aviation, aerosols etc.

In this article, we outline the 6 draft principles for making environmental claims the CMA has published, look at a recent ASA ruling on Hyundai’s claim, ‘A car so beautifully clean, it purifies the air as it goes’ and consider how brands can avoid adverts being withdrawn as ‘greenwashing’ – making unsustainable or misleading claims about the environmental impact of a product.

What is Sustainability Marketing? 

Social media advertising trends point to an increase in sustainability marketing. This is a new approach in the industry that uses claims to highlight a product or service’s positive impact on the environment and social aspects around labelling such as ‘organic’ Advertisers are aiming to get behind the new generation of consumers who are more conscious about their impact on the environment and tend to engage with them via these marketing campaigns.

The change in consumer behaviour was documented in McKinsey & Company’s recent report on UK consumer sentiment during the coronavirus crisis. McKinsey & Company report highlights:

  • 17% will switch to support local business
  • 15% say sustainability is a key factor
  • 9% will look for organic options
  • 6% want to support a company that treats its employees well

Consumers are aware of the environmental impact of their choices more than ever and they tend to seek more sustainable options to reduce their carbon foot print. Since brands are becoming more aware of this trend, we see an increase in greenwashing as well. 

Various household names have responded to consumer demand for greener products. As brands struggle to engage with customers, they tend to promote their products using claims of sustainability or start new sustainable lines or even sub-brands to keep up with the changing trajectory. Clothing giants such as H&M started their new sustainable sub-brands to appeal to this new group of conscious consumers.

We are noticing similar marketing techniques being promoted in other industries too. When booking flights for your next holiday, you will see that some providers such as Skyscanner are now comparing the Co2 footprint of each flight which makes it possible for the customers to choose the greener option. As you can imagine, if two flights have the same price, the customer might want to go for the greener option. Having their green claims highlighted on this platform will give a clear advantage to the company who claims to be more sustainable.

The CMA have proposed six principles for businesses to follow when making environmental claims.

These must be:

(1) Truthful and accurate: Businesses must live up to the claims they make about their products, services, brands and activities

(2) Clear and unambiguous: The meaning that a consumer is likely to take from a product’s messaging and the credentials of that product should match

(3) Substantiated: Businesses should be able to back up their claims with robust, credible and up to date evidence

Environmental claims in advertising should NOT

(4) Omit or hide important information: Claims must not prevent someone from making an informed choice because of the information they leave out

(5) Make unfair or meaningless comparisons: Any products compared should meet the same needs or be intended for the same purpose

Manufacturing processes, sourcing of materials and supply chains all count when working with marketing copy:

(6) Environmental claims must consider the full life cycle of the product: When making claims, businesses must consider the total impact of a product or service. Claims can be misleading where they don’t reflect the overall impact or where they focus on one aspect of it but not another

What is Greenwashing?

Sustainability is currently the trendiest topic in the marketing realm but do consumers ‘buy’ these claims?

During the COVID-19 pandemic, consumers moved towards online shopping for convenience and safety reasons. They also became more aware of the impact of their purchases. Consumers want to know more about how the product was made or sourced. Brands are aware of this trend and as a result they prefer to engage in sustainability marketing campaigns to stay ‘relevant’.

Recently, the ASA has responded to number of complaints from the consumers who were concerned about greenwashing claims which resulted in in ads having to be withdrawn.

A consumer complaint was made to the ASA following Hyundai’s claim ‘A car so beautifully clean, it purifies the air as it goes” on the basis that this was misleading. The ASA concluded that the claim was indeed misleading as the particulates from brake and tyre wear were a significant contributor to air pollution from vehicle use. ‘It purifies the air as it goes’ as it would be understood by the consumers had not been substantiated under these circumstances therefore the ad was removed.

How are consumers making sustainable choices?

A simple search online will show  consumers some evidence for the base of these claims. A great example in the field of fashion is “Good on You” a platform where thousands of clothing and accessories brands are ranked according to their sustainability rating. These platforms allow consumers to compare the impact of their purchase amongst the leading brands. Due to be published at the same time as CMA’s final Green Claims code, is a short CMA guide aimed at consumers to help the public assess if and when to trust environmental claims being made by businesses.

Brands should comply with the advertising rules to avoid being caught by regulators but there is also a great value in being transparent with your target audience. While brands should absolutely ensure they give customers great value and sustainable options, they will also need to be clear about their supply chain policies and suppliers. Some brands might be environmentally friendly but at the same time lacking in labour standards which ensure worker health and safety, living wages and so on. In the last year, some concerns were raised about the lack of policies to protect suppliers and workers in the supply chain from the impacts of COVID-19.

How can brands ensure they don’t greenwash over environmental claims? 

Brands who trade with an eco-friendly edge need to keep up to date with regulatory changes and regulators’ rulings to ensure campaigns and copy can sustain any environmental claims. The current ASA rules summarise what brands should keep in mind when making claims about the environment:

  • Check the claim is relevant and reflects a genuine benefit to the environment
  • Have a clear idea of the main environmental impacts of your product, service or organisation
  • Present claims clearly and accurately. Use plain language that is not vague or ambiguous, or jargon that may be misunderstood
  • Check the claim can be readily substantiated. Evidence to substantiate a claim must be clear and robust and have been tested using the most appropriate standard methods. 

Why does it matter?

Consumers especially the new generation will not take the greenwashing light-heartedly. When big brands engage in green campaigns the consumers tend to find this cynical and they will dig deeper to check the basis of these claims. It is also important to stop greenwashing and actually invest in more sustainable solutions to tackle the underlying contributory causes to climate change.

How Can Irwin Mitchell Help? 

We have a specialist consumer team with vast experience in advertising regulations. With offices across the UK, we can help wherever you’re based.