Green Claims: Do Your Comms Have the Green Light?

What does it mean to have ‘eco-friendly’ products? Is your service really low-carbon? Or nature-friendly? 

Terms like these are increasingly used across all businesses and sectors when communicating about their positive impact, but may not always be a realistic, or verifiable claim. This is known as greenwashing, where companies misuse terminology to exaggerate claims about their sustainability performance and impact. 

And it’s really common across the world…a review of 500 randomly selected websites globally by the UK Competition and Markets Authority in 2021 found that 40% of green claims made online could be misleading consumers.

In light of ongoing claims of greenwashing, new legislation has been published (with more being developed) that gives clear guidelines on what can, and cannot be said by any organisation when talking about their impact. 

And we know that, as organisations seeking to share their positive impact stories with their customers, clients and staff, it can feel like tricky waters to navigate. But with companies already being held to account for misleading claims, the regulation is not one to disregard. 

In this article, we’ve provided a quick overview of the key legislation and regulation (current and emerging) to help bring you up to speed on this important issue of communicating your impact. 

Legislation Around the World

Over the past year, there has been increasing legislation passed (and more to be passed) to manage what is, and is not, appropriate to claim when talking about your organisation’s impact. 

Key jurisdictions of relevance include:

1. The UK, with the Green Claims Code published by the UK Competition and Markets Authority (CMA) and the updated guidance released by the Advertising Standards Association
2. The EU, with the new ‘‘Empowering Consumers for the Green Transition’ Directive, passed earlier this year and the final version of a wider ‘Green Claims Directive’ set to be published imminently. 
3. The US, the ‘green guides’ by the U.S. Federal Trade Commission (FTC) are currently being updated following public consultation, and are expected to further scrutinise corporate sustainability claims. There’s not yet a confirmed date when these guides will be updated.  
4. The rest of the world. Countries such as Denmark and Norway already have guidelines in place and are actively checking organisations’ compliance. Canada is expected to update its legislation to strengthen how the Competition Bureau handles ‘greenwashing’. 

Green Claims Legislation Deep Dive

Here is a quick overview of two regions where legislation is most advanced, the UK and the EU. 

UK: The Green Claims Code

Who published this? The UK Competition & Markets Authority 

What is it? A set of principles to help businesses comply with consumer protection laws in the UK

Who does it apply to? All businesses that make environmental claims in the UK, including goods, services, and processes, and applies to a product, a brand, or an entire business. 

What does it say? It gives six principles all businesses must follow:

1. Claims must be truthful and accurate
2. Claims must be clear and unambiguous
3. Claims must not omit or hide important relevant information
4. Comparisons must be fair and meaningful
5. Claims must consider the full life cycle of the product or service (creation to disposal)
6. Claims must be substantiated.

It then provides a non-exhaustive checklist to provide guidance when checking if a claim is misleading:

• The claim is accurate and clear for all to understand;
• There’s up-to-date, credible evidence to show that the green claim is true;
• The claim clearly tells the whole story of a product or service, or relates to one part of the product or service without misleading people about the other parts or the overall impact on the environment;
• The claim doesn’t contain partially correct or incorrect aspects or conditions that apply;
• Where general claims (‘eco-friendly’, ‘green’ or ‘sustainable’ for example) are made, the claim reflects the whole life cycle of the brand, product, business or service and is justified by the evidence;
• If conditions (or caveats) apply to the claim, they are clearly set out and can be understood by all;
• The claim won’t mislead customers or other suppliers;
• The claim does not exaggerate its positive environmental impact, or contain anything untrue – whether clearly stated or implied;
• Durability or disposability information is clearly explained and labelled;
• The claim does not miss out or hide information about the environmental impact that people need to make informed choices;
• Information that really cannot fit into the claim itself can be easily accessed by customers in another way (QR code, website, etc.)
• Features or benefits that are necessary standard features or legal requirements of that product or service type aren’t claimed as environmental benefits
• If a comparison is being used, the basis of it is fair and accurate, and is clear for all to understand.

UK: Updated Guidance from the ASA

Who published this? The Advertising Standards Authority, UK

What is it? Guidance on misleading green claims, including factors that make claims more or less likely to comply with the Advertising Codes and Green Claims Code 

Who does it apply to? All advertisers, including media agencies, brand agencies and brands themselves 

What does it say? Reflects the guidance in the CMA’s Green Claims Code, as well as specific guidance on the use of terms such as ‘carbon neutral’ and ‘net zero’:

• The use of unqualified terms such as “carbon neutral”, “net zero” or similar should be avoided
• It must be clear whether advertisers are actively reducing carbon emissions, or merely offsetting, so consumers do not wrongly assume that products generate no or few emissions
• Statements about targets towards net zero or carbon neutrality must be backed up by a verifiable strategy to achieve those targets
• Where claims relate to offsetting, advertisers should comply with the usual standards of evidence for objective claims and mention the offsetting scheme being used

The EU: the Consumer Empowerment on the Green Transition Directive 

Who published this? The European Commission, approved earlier this year (2024). It will be integrated into member states’ regulations over the next two years and is therefore likely to come into force in late 2026. 

What is it? An EU Directive to amend the Unfair Commercial Practices Directive (UCPD) and the Consumer Rights Directive (CRD), aiming to empower consumers for the green transition through better protection against unfair practices and better information

Who does it apply to? It will cover all sustainability claims (environmental and social) in the EU that relate to a product, a brand, a company, or a service made in a business-to-consumer (“B2C”) context

What does it say? Key rules are as follows: 

1. General ‘green’ claims like ‘environmentally friendly’, ‘natural’, ‘biodegradable’ and ‘eco’ are not allowed unless substantiated with adequate proof (e.g. third-party verification or evidence-backed data)
2. No claims that imply that a product/service is carbon-neutral, or has a reduced/positive impact on greenhouse gas emissions. Claims such as ‘climate neutral’ or ‘carbon positive,’ are not allowed to be used when based on emissions offsetting. There are also further clear rules on what climate-related claims are, and are not, acceptable. 
3. Sustainability labels on products must be based on official, third-party, verified, certification schemes (or established by public authorities) in the EU.
4. Banning practices associated with early obsolescence of goods e.g. labelling software updates as essential when they merely improve functional aspects, falsely advertising products as repairable when they are not, and unjustly requiring the purchase of spare parts solely from the original manufacturer. 
5. Introduction of a guaranteed lifespan label, clearly displayed, that informs the consumer of the products covered by a no-cost commercial guarantee of durability (a legal requirement in the EU), as well as an indication of the product’s expected lifespan. 

What This Means For Your Company

Do your communications claim your brand is ‘eco friendly’ or ‘natural’? Have you mentioned your carbon impact without substantiation or external references? 

Now is the time to revisit your green claims and check your compliance with the growing amount of legislation and regulations. Proactivity is strongly recommended, as non-compliance risks severe reputational damage, removal of communication materials, and even financial penalties. 

Make sure you understand what is, and is not, acceptable with regard to green communications so you can maintain and grow your reputation, and demonstrate your commitment to positive environmental and social impact. 

Junxion can help you ensure your current and future communications are compliant with current and upcoming legislation and regulations. Want help to navigate this Green Claims quagmire? Get in touch.