Laying down the law on green claims - Grant Strachan and Martin Sloan

As the UK looks to transition to a low carbon economy and consumers become more environmentally conscious, there is a growing incentive for businesses to accentuate the purported green credentials of their products.
Martin Sloan is a Partner, Brodies LLP.Martin Sloan is a Partner, Brodies LLP.
Martin Sloan is a Partner, Brodies LLP.

With a recent Competition and Markets Authority (CMA) study showing 40 per cent of websites deploy potentially misleading environmental marketing tactics, regulators are determined to ensure the accuracy and fairness of environmental or 'green' claims made in advertising, so consumers can make informed choices.

Last year, the CMA launched an investigation and consultation into how consumer protection legislation can be better harnessed to prevent false or misleading green claims. New guidance is now available, to help businesses better understand and comply with existing consumer protection legislation as it relates to green claims.

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So what exactly is a 'green claim'? It's the suggestion that a product, service, brand or business is good for the environment or less environmentally damaging than competing goods or services. These claims are regulated by the overlapping regimes of the CMA and Advertising Standards Authority (ASA). The CMA is responsible for enforcement of UK consumer protection legislation like the Consumer Protection from Unfair Trading Regulations 2008 and the Consumer Rights Act 2015, and the ASA for regulating advertising in the UK through the non-binding Code of Non-Broadcast Advertising, Sales Promotion and Direct Marketing and Code of Broadcast Advertising (collectively known as 'the codes').

Grant Strachan is Senior Associate, Brodies LLP.Grant Strachan is Senior Associate, Brodies LLP.
Grant Strachan is Senior Associate, Brodies LLP.

In addition to compliance with those regimes, businesses may also have to follow sector or product-specific requirements relating to particular goods or services; for example, energy labelling requirements for certain household appliances.

There are six guiding principles for business to be aware of:

Claims must be truthful and accurate: Even factually correct claims must not give an inaccurate overall impression. Absolute claims (that make a definitive statement in relation to a product's composition, method of production or ingredients used) must be supported by a high level of substantiation. The rationale is that such claims are more likely to be inaccurate and misleading, and claims must not suggest environmental characteristics which are, in fact, standard features.

Claims must be clear and unambiguous - worded in a transparent, easy-to-understand manner not likely to confuse consumers.

There is a growing incentive for businesses to accentuate the purported green credentials of their products.There is a growing incentive for businesses to accentuate the purported green credentials of their products.
There is a growing incentive for businesses to accentuate the purported green credentials of their products.

Claims must not omit or hide important relevant information: Claims should not 'cherry-pick' information by focusing on one feature of a product or service and leaving out other relevant features. This overlaps with the next principle:

Comparisons must be fair and meaningful: This is linked to the first principle of truthfulness and accuracy and requires comparisons with other products or services to be based on clear, objective criteria.

Claims must consider the full life cycle of the product: The environmental impact of the product or service across its lifecycle should be considered, including supply chain and disposal.

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Claims must be substantiated: Businesses should have scientific or other factual evidence to support claims and prove they are true. Broad and absolute claims require clearer evidence to back them up.

The guidance goes on to detail each principle and provide illustrative examples and case studies - particularly helpful for businesses to use as a compliance reference guide.

The CMA's guidelines are not new substantive rules but rather flesh out principles that were already articulated in the ASA codes and underlying consumer protection law.

For example, the ASA codes' general rules on substantiation, which require advertisers to provide documentary evidence to back up their claims, are mirrored in the sixth principle, and the general obligation not to omit material information also aligns directly with the third principle.

Similarly, the codes' specific rules on environmental claims have also clearly influenced the CMA's draft guidelines in terms of:

the importance placed on the environmental impact of the full life cycle of an advertised product, rather than just one part; absolute claims requiring a higher degree of substantiation; and highlighting any environmental impact of features that are, in fact, industry standard, is misleading.

Being authentic in claims about services or products is part and parcel of what it means to be a responsible and sustainable business – something we'll discuss with businesses at our online food and drink conference next month. As sustainability and environmentally friendly products and services become more important to consumers, it is to be expected that marketing around green claims will become more closely regulated.

Grant Strachan is Senior Associate and Martin Sloan Partner, Brodies LLP.