The online version of this article which appeared in Daily Business magazine can be viewed here.
We are all increasingly familiar with the “green”, “environmental”, or “eco-friendly” claims made by businesses about the environmentally beneficial qualities or characteristics of their operations, products or services. They might refer to the way in which a product or service benefits, or is less harmful to the environment, or to a socially responsible or ethical way in which products are made, or services provided.
These claims in advertising can be highly influential on consumer behaviour given the growing number of consumers who consider the environmental impact of their buying choices. While many of these claims are genuine, and can be backed up with evidence, “greenwashing” – or branding something as eco-friendly or sustainable when this is not the case – is an issue if it misleads consumers into thinking they are helping the planet by choosing those products, and businesses can find themselves in hot water if they exaggerate claims, hide or misrepresent crucial information.
The experience of two soft drinks brands which recently fell foul of the UK’s Advertising Standards Authority (ASA) rules when making environmental claims, is a salutary lesson for all.
For Innocent Drinks it was a case of aims versus claims.
A recent Innocent TV advert showed animated characters encouraging people to fix up the planet. Although it did not make a specific environmental claim and was, in Innocent’s view, a call to action aimed to highlight important global environmental issues and inspire customers to make change, the advert implied that buying Innocent drinks would have a positive environmental impact. In fact, Innocent’s drinks bottles included non-recycled plastic, and the Advertising Standards Authority noted that the extraction of raw materials and subsequent processing to produce the bottles would have a negative environmental impact. Consequently the ad was banned for misleading customers about the environmental impact of Innocent’s products.
For Pepsi Lipton and its Lipton Ice Tea brand it was a case of “We said that – in the small print”.
On a poster there was an eye grabbing headline for Lipton Ice Tea which showed two bottles, a recycling logo and a claim that the product was “100% recycled*”. The asterisk linked to small text at the foot of the poster and noted that the bottle was made from recycled plastic, but the label and cap were not. Despite including this qualification in very small print, the ASA found the ad to be misleading as the qualification did not counter the overall impression that all components of the Lipton Ice Tea bottle were made entirely from recycled materials.
In spite of increasing consumer understanding of environmental claims, both these examples highlight the difficulties businesses may face when promoting themselves as green. However, help is at hand and marketers can now look to the new guidance published by the Committee of Advertising Practice on misleading claims and social responsibility to keep themselves right.
The key themes arising from the guidance are:
– the need for clarity; claims are likely to mislead if the basis of the claim is not clear
– the importance of basing claims on the full lifecycle of a product or service
– making sure that a high level of verifiable evidence is available to back up claims
– the need to prepare ads with a sense of responsibility to consumers and society
As expectations grow for businesses to play a more prominent role in encouraging responsible consumer behaviours, the ASA will be shining a brighter regulatory spotlight on environmental matters. The ASA recognises that to achieve the goal set by the UK’s Climate Change Committee to meet net zero targets, consumer behaviour must change, and it is against that wider context that the ASA will apply the rules on social responsibility.
Other regulators are developing an increasing focus on green issues, sustainability and climate change, too. Earlier this year, the Competition and Markets Authority published advice to the government on how the UK’s consumer and competition regime could work better to help the government achieve its net zero target by 2050, and followed hard on the heels of its Green Claims Code in 2021, in which it made clear that it plans to take enforcement action against businesses that mislead consumers with false, vague or unsubstantiated green claims. Also, the government has introduced the Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022, making it mandatory for large companies and financial institutions across the UK to make climate related financial disclosures. The regulations form part of a wider strategy to give investors the information needed to integrate climate change and sustainability into all financial decisions.
And even if a company is not required by law to report on environmental matters, it may still choose to do so on a voluntary basis, for example, to meet ESG commitments, to achieve greater brand recognition as a leader on climate change, to establish a benchmark of its environmental performance or to prepare for future mandatory requirements, like this one. The theme for this year’s World Environment Day is Only One Earth, focusing on living sustainably in harmony with nature by bringing transformative changes – through policies and our choices – towards cleaner, greener lifestyles. As we move closer to 2050, the regulatory focus on climate change, green issues and sustainability will continue to grow – a welcome development that will benefit everyone.