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.
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 by either by the green claims code, by laws around misleading advertising and/or by the ASA's codes. And the code covers not just content aimed at consumers it also covers content aimed at businesses and again this is an issue we come across in practice. There is an idea that in many cases this is correct that your marketing when it is aimed at businesses is lower risk you can get away with saying more, it needs less clearance, less oversight but we have real live experience of campaigning groups going through those sustainability pages on a company's website which are intended for trade customers and picking out the more problematic claims and making complaints about them. Another point to note here is that the Regulators do not just look at copy, they do not just look at the accuracy of what you are saying, they look at the overall impression that you are giving and that could be a combination of copy, images, small print, qualifying wording, they look at the substantiation and supporting evidence that you could provide and they look at the overall presentation of the advertisement to see what the average consumer will take from it.
What happens if you do not comply? Well the Competition and Markets Authority and Trading Standards have broad enforcement powers in relation to the underlying law and on top of that the government is also consulting on potential additional powers for the Competition and Markets Authority which may include the power to levy fines without pursuing a business through the courts so just have that in your mind. TheASAobviously can take action against misleading advertisements and businesses may face legal action from consumers, either from breach of the Consumer Protection from Unfair Trading Regulations for misrepresentation for breach of contract and you only have to look at the class actions brought against some of the car manufacturers around their claims about diesel fuels to see how burdensome, how badly that can go.
Kate Hawkins: So, what is in the green claims code? The code sets out six principles specifying that claims must be truthful and accurate, they must be clear and unambiguous, they must not omit or hide material information, they must only make fair and meaningful comparisons they must consider the full lifecycle of the product or their service and lastly substantiate it. These are practical principles that should help businesses make more compliant environmental claims. The new code does not prevent businesses from making truthful environmental claims, rather part of this theCMAis pushing this phase is to let brands who can tell substantiated green stories do so without being drowned out by others who make claims without a basis. As many of you will know and as Dan just mentioned these principles are not new and theASAhas been considering advertisements in this context for many years. We will take your through each principle now using examples from the ASA's previous adjudication to illustrate the points.
So the first principle put simply claims must not contain incorrect information and they must be true. When formulating claims you should look at the overall impression that it creates and ask yourself whether it might be mislead a consumer. A misleading claim might be on that describes or implies that a product is recyclable when only part of that product is in fact recyclable. It might be one that claims that a product is organic when it does not consist almost entirely of organic components. It might use broad terms such as green sustainable an eco-friendly without explanation and where the product as a whole does not have a positive environmental impact or does not have no adverse impact. A misleading claim might also be one that is factually true but does not make it clear that the claim only relates to a particular aspect of a product service or business when that product, service or business has an overall negative impact or otherwise comes at a significant environmental cost. A misleading claim might say or it might imply that something is a benefit when it is industry standard or required by law. This might mislead consumers into thinking that the product service or business is better than others when it is in fact it is just meeting the required standards.
If an environmental claim is only true in certain circumstances or if particular conditions apply then that should be clearly stated. For example a claim that an electric vehicle produces zero omission may mislead consumers but claiming that the car produces zero emissions while driving may not. As usual this kind of qualifying information should be close enough to the claim so that it is easily seen by the consumer and does not contradict the claim being made, so turning to our first example.
So theASAhave recently considered Hyundai's claim. A car so beautifully clean it purifies the air as it drives. The complainant had raised concerns because they understood that although the car would not release exhaust fumes like a traditional combustion engine it is still releases matriculates as a result of brake and tyre wear. TheASAheld that this claim could be interpreted as meaning that the car had a negligible environmental impact and would in fact remove impurities from the air as it was driven meaning that no impurities caused by driving remained in the air at all. Hyundai did have an air purification system but ultimate theASAfound that the claim was misleading because it did not take into account the fact that matriculates from the brakes and tyres would be released into the air. These kinds of matriculates are significant sources of pollution and would not be removed by the car unless they happen to pass through the air filtration system. So the key takeaway from this decision is that even when a product has strong environmental credentials you should make sure that your claims do not overreach and do not go further than what you can substantiate. Next example thank you.
This example concerns some claims made by cardboard coffins which were being made on its website including we offer the only 100% recycled cardboard coffin on the market. A complaint challenged whether the claim 100% recycled cardboard was misleading. TheASAconsidered that as the outer edges of the cardboard were not recyclable because all cardboard required glue for bonding and it was unlikely that the clue used in the product was also recyclable. This claim cannot be supported by evidence and was misleading. To the key thing is that you should not make a claim or otherwise give the impression that a product is recyclable if it is not or as the case was here, if only parts of it are and other parts are not preventing recycling as a whole. Thank you.
A few years ago now Georgia Pacific ran a prize promotion to win Volkswagen campervans and mountain bikes with the new Nouvelle soft toilet tissue. The online promotion included the claim win genuinely green prizes with Nouvelle Soft. When complaints were made Georgia Pacific defended the claim on the basis that this van was the most fuel efficient model of its line and had a lower emissions that others in its category. TheASAfound that because it was not clear that this ad was intended as a comparison with other kinds of campervans. The claim generally green would be understood to mean that the prize that did not have a negative impact on the environment taking into account its whole lifecycle start from manufacturer, manufacture all the way through to disposal rather than it had a less negative impact because of its lower emissions than others on the market. Ultimately this was found to be misleading. So just a key thing to remember is broad claims like green must be supported by clear evidence that the product or service has a positive environmental impact or not a negative one and without these the kinds of claims that are made so broadly are likely to be misleading. Over to you Dan.
Dan : OK so turning to principle 2 and you will see as we go through this there is a lot of overlap between these principles and many of the examples of we could have slotted in against any of the principles frankly. So here the principle is be sure that claims are clear and unambiguous and the code gives examples again of claims which it considers likely to be problematic and the first of those is again vague or general statements of environmental benefit. The vaguer you are the boarder your wording is, the more possible interpretations there are, the more likely it is that the Advertising Standards Authority or another regulator will require you substantiate the most difficult interpretation to substantiate the broadest interpretation and therefore the harder your job defending that claim if a complaint is made to one of those regulators.
Another example of a problematic claim here, claims about future goals where the business does not have a clear and verifiable strategy to deliver them. Now for years this has been a fall-back position for us when looking at green claims. So a business has wanted to make a clean claim, has decided that it is not yet quite in the position to make that green claim so has instead expressed the claim as an aspiration, a step on the journey we are working towards this. We are not quite there yet but we are on a journey to delivering it. The new code looks at that and seeks to contain it because the regulators do not want businesses exploiting that leeway and putting out claims that they are working towards something when they have got no clear and verifiable strategy to deliver it. So the expectation will be if you say you are on a journey to zero carbon emissions or something along those lines that you are able to produce the strategy, the documentation that you are making progress, that there are clear objectives and you are making progress on the way to that ultimate objective, that you are monitoring progress on the way to that ultimate objective. Claims which use confusing or technical language obviously those can always be ambiguous, difficult for consumers to understand in particular you might have more flexibility with a trade audience. And some of this issues in this space so carbon neutral claims for example can be very technical so there is a bit of a skill there in getting all the information which the consumer needs across to the consumer in a way in which they understand but balancing against the risk of generalising too much and thereby misleading the consumer.
And really the biggest piece of advice here is be specific and there is always attention with marketing teams on this. They want to reach for consumer friendly language, they want to reach for hard hitting headlines, but actually the regulators are pushing in the opposite direction. They are very much encouraging you to look at making much more specific detailed claims.
So looking at a couple of examples here so we have got a bus ad for Alpro from late 2020 the adjudication on this was last month and this is something we are also seeing at the Advertising Standards Authority at the moment that they are taking up to 12 months to consider these more complex environmental claims issues. You can see that that Alpro ad is saying next step your recipe to a healthier plant, good for the plant, good for you. So easy to stop the issue there. Good for the planet so the complainant believed that commercial almond farming for almond milk was environmentally damaging. Now Alpro were able to rebut that specific complaint. They were able to establish that they source their almonds in a different way from regions which did not present the same environmental issues but the complaint was still upheld and that was because even though Alpro had some evidence to support some of their products environmental impacts across their lifecycle it did not have anything which could support good for the plant which theASAinterpreted as meaning that the Alpro products featured has a net positive environmental benefit for the plant across the whole lifecycle. That is a very difficult claim to substantiate and Alpro were not able to achieve that.
Next one was Quorn. So this is a TV ad for Quorn Thai Wonder Grains. Again from last year. So the voiceover here said I care about climate change and I love my food so new Quorn Thai Wonder Grains is a step in the right direction because it helps us reduce our carbon footprint and that has got to be good. If you care about climate change, take a step in the right direction with new Quorn Wonder Grains and then there was on-screen text referring to the fact that Quorn Wonder Grains had been awarded a carbon reduce footprint certification by the Carbon Trust for their full lifecycle. Now the carbon reduction footprint certification did relate to the full lifecycle of the product so that met one of the standards that theASAwas expecting. However, what Quorn is really talking about here was that they had established an initial benchmark with the Carbon Trust and that they were committed to reducing their environmental footprint over time and they had the plan to show that they would do that. The Advertising Standards Authority looked at this and said no. The average consumer would interpret this as a claim that simply by buying the product right now and not by continuing gradually to buy it over time they would reduce their carbon footprint as compared to competitor products. That was not Quorn's intention but the claim was ambiguous and therefore theASAfound it to be misleading and what theASAconsiders the average consumer's interpretation of the wording would be.
Next one from a very different industry, goldmining, so this is Dalradian Gold and they were in the planning process for introducing a new gold mine in Northern Ireland and part of the materials they circulated said 100% carbon neutral from day 1 the mine will not contribute to climate change. Quite a big claim but theASAlooked at the evidence that Dalradian Gold had and they were able to put across detailed plans to assess the emissions impact across the whole lifecycle of the mine from construction through to shutdown applying the greenhouse gas protocol which an emission standard which tends to be accepted by the Advertising Standards Authority. Plans to reduce their direct and indirect emissions and to offset the remainder of those emissions. The Advertising Standards Authority concluded that the ad was not likely to mislead. Dalradian Gold were not simply making ambiguous or vague claims about future goals they had a clear and very viable strategy to deliver those goals.
Two more on this very quickly. Stovax Wood Burning Stove, Burn Clean is the headline. The Advertising Standard Authority considered that in context Burn Clean was not ambiguous because it was clearly linked to the regulatory standards set out in the Clean Air Act so Stovax were OK on that score.
Hybrid vehicles, a big area for complaints. People tend to assume that manufacturers are overstating the electrification of hybrid vehicles. This ad, what is the new Mitsubishi Outlander Plug In it's electric, it's electric, it's electric, it's electric. A repeated phrase caused people to complain to say that Mitsubishi were exaggerating the electrification. The Advertising Standard Authority said no. In this case, this ad is not misleading. It is not ambiguous. It specifically also refers to petrol power and miles per gallon so it is clear to consumers that this car is using not only electric power but also more conventional fuels.
And the last one on this section where the ruling did go against the advertiser so this was a customer testimonial. It was customer content on Social Media and the lady in question was talking about her BMW I3 and the benefits of it and as part of that she said and it helps to give back to the environment. BMW adopted this context. They put it out on their own platforms and frankly the Advertising Standard Authority would have considered them to have adopted it even if they had only retweeted it or engaged with it in some way. Advertising Standard Authority essentially said all cars come at an environmental cost, no cars help to give back to the environment. This would be interpreted as an objective claim even though it is within the context of customer testimonial it is not clearly a comparative claim against petrol or diesel fuelled cars. It is an absolute claim and therefore it is misleading. Kate.
Kate: Alright so principle three, claims must not admit or hide information that consumers need to make an informed transactional choices. Consumers will take into account a range of factors when deciding whether or not to buy a good or a service and you should make sure that you provide all the information that those consumers need to make that informed choice. If a piece of information would change the overall message of your claim that would likely be deceptive to not include that information at the outset. This is increasingly important as consumers become more conscious of the environmental impact of what they consumer. They are demanding that products and services have a positive effect on or minimise harm to the environment. Naturally there is an attraction for businesses to promote their environmental credentials but this must be justified.
So a few examples of what might be problematic claims in this area. It is likely to be problematic for a claim for cherry pick the positive environmental aspects of a product, but other aspects are more negative. This is especially the case when the benefits claimed only relate to a relatively minor aspect of that product or service or only relate to part of a brand's activities. Cherry picking information will likely make consumers think that product, service or brand is greener than it really is which is not supported which seem misleading. It may also be misleading but carbon neutral claims do not clarify whether carbon neutrality is based on a reduction of carbon emissions or the offsetting of those emissions. Carbon neutral claims are highly technical claims based on a lifecycle assessment of the relevant product. Carbon neutrality is typically achieved for a combination of reducing emissions attributable to that product and then offsetting the remaining emissions through a recognised scheme. The ASA's guidance on this is currently being reviewed and reworked so it is something of a grey area at the moment but pending publication of that revised guidance, our recommendation would be to err on the side of including more information rather than less including information about the limitations of any lifecycle assessment.
We should also specifically and explicitly clarify to the consumer that carbon neutrality involves both the reduction and offsetting of emissions. When you include qualifying information it must be prominent, easily assessable, and easily understood. The further away this information appears the more likely the claim it relates to will be seen as misleading and do not forget that space limitation will not be a defence for not providing that important information about environmental impacts. It may be that some mediums are just not as well suited for these kind of claims.
So Shell ran this ad early last year and a number of complaints were submitted to theASAcomplaining that the claim right at the end drive carbon neutral was misleading by emission. TheASAfound that that this ad gave consumers the impression that they could visit a petrol station and fill up with fuel. That was carbon neutral but it wasn't that simple. Shell Go Plus is a loyalty programme. After signing up membership cardholders needed to log their fuel purchases. The carbon associated with that fuel was an offset by Shell though a third party verification process. While theASAdid not think that the radio ad needed to include a full explanation of this gain it did find that the fact that there was nothing at all in the add indicating that Shell was advertising a loyalty scheme was misleading by emission. So always remember that while ads do not need to include all of the information upfront they need to include the information that is most significant and include a signpost to where further details can be found. Back to you Dan.
Dan: OK so principle four is around comparisons, comparative advertising only make fair and meaningful comparisons and this is whether you are comparing with your own earlier versions of the product or a competitor's product. You need to ensure the comparisons are not misleading. As part of that you should avoid hanging comparisons so saying something is greener might be easier to prove and saying its green absolutely but greener than what. If you do not say then again a regulator could adopt an interpretation which you did not intend so if your recyclable packaging is greener meaning that it was greener than the previous non-recyclable version of that packaging or you might be able to evidence that. You might be able to substantiate that but if you simply say it is greener without clarifying that the comparison is with the earlier version of that packaging then the assumption might be that you are saying it is greener than the competitor packaging or competitor recyclable packaging which you may not be able to prove.
Usual rules around comparative advertising apply so you need to avoid misleading to compare products meeting the same needs that are intended for the sale purpose, compare representative features etc. etc. You might choose to compare CO2 emissions. In that case you will need to ensure that the calculation is performed in the same way for each product and relate to the whole lifecycle or are clearly limited to the same part of the lifecycle. You need to ensure that the comparison you are making is representative and verifiable so you could not just cherry pick the part of the lifecycle which is most favourable to your own product and as with all comparative advertising and especially in this particular sensitive area, it is likely to be contentious so you need to be very confident that your advertising will stand up to the scrutiny given to it by your competitors and their legal team.
Of course if you are using a competitor brand there is also the possibility of trademark infringements.
Just one example on this, so Ryan Air claimed to be the lowest emissions major airline. There were various complaints about that and the Advertising Standard Authority upheld those complaints misleading and considered the advert to be misleading on a couple of ground so firstly Ryan Air had not included within the comparison all the airlines which theASAconsider the average consumer would believe fell within the definition major airlines. And secondly the Advertising Standard Authority disagreed with the technical basis for calculation as it did not assess the impact for the seating density within the planes. They went on to say that the basis for the calculation was not made sufficiently clear in the ads.
Kate: Principle number five substantiation. Most environmental claims are likely to be seen as objective claims that can be tested against evidence accordingly they must be supported by robust credible relevant and up to date scientific or other evidence. You should make sure that you hold this evidence before you proceed to make an environmental claim. If a complaint is made to a regulator then they will almost certainly ask that you provide the evidence that supports the relevant claim.
Broader and more ambitious claims may be more difficult to substantiate. For example that a product is environmentally friendly may refer to a number of environmental aspects such as its impact on the air, the soil and water. Its packaging, its components and the production processes used. How it is used by consumers and how it is disposed of. Describing a product is environmental friendly. It is likely to suggest that the product has an overall positive impact on the environment or no negative one. If you make this kind of broad claim then you will need a very high level of strong evidence that supports it. Similarly with carbon neutral claims you may well need independent certification covering the reduction of emissions through the supply chain, its manufacturing processes if there are any indirect emissions, distribution, use and disposal. You would also need evidence of the offsetting schemes you are using based on recognised standards which must be capable and objective verification.
Where a claim is not based on accepted science other evidence, so it will be very difficult to substantiate and it is more likely to be misleading to do so. Similarly, if you are not using evidence as based on the real world experience but rather the results of lab testing or results that can only be replicated in very specific circumstances then the claim could be misleading unless those intentions are explained. So turning to our example.
Here we go it was foreshadowed at the outset. Ancol's web page included text that stated "refill poop bag rolls. These thick waste bags are biodegradable to lessen your dog's impact on the environment." TheASAthought that consumers would assume that they could dispose of these bags in the usual way so for example in bins that are specifically provided for the purpose of dog waste disposal in parks and by swapping conventional plastic bags for these bags, consumers could in turn reduce their impact on the environment. TheASAconsulted with the Department for Environment, Food and Rural Affairs as well as other experts and concluded that in order to be described as biodegradable plastic needed to be biodegrade significantly faster than its equivalent, the conventional plastic equivalent. TheASAfound evidence that did not support, that the biodegradable process would be quicker for these Ancol bags and so concluded that this claim was misleading. Back to you Dan.
Dan: OK so the last principle which we have hinted at elsewhere in the talk already consider the full lifecycle of the product. So it is clear that the code is encouraging businesses to look at the impact of their products or services end to end on a cradle to grave basis. However the code does give some comfort that it will still be possible in some circumstances to focus in on parts of the lifecycle where that is clearly explained. So for example the code talks about electric cars making zero emissions claims. Now an electric car is not zero emissions. There are emissions associated with its manufacture. There are emissions associated with electricity generation to power the vehicle. However, the code indicates and this is the accepted wisdom for the Advertising Standards Authority that if you quality those claims with while driving i.e. you focus on a particular part of the lifecycle they are likely to be OK. It is also very clear from the complaints we have with theASAon our desks right now that theASAis continuing to accept that you can make claims in relation to parts of the product lifecycle so long as you make it clear that that is what you are doing. Other things which might be problematic here very specific claims which mislead consumers about the total environmental impact so I have already encouraged you to be very specific in your formulation of these claims but if you are focusing in on something very minor then there is the potential to give a misleading overall impression about the product as a whole. I have seen some ads recently which have talked about sustainable touches in the context of a much bigger product. That rings alarm bells. If you are focusing in on something tiny when your products as a whole is likely to be polluting then you may still be misleading.
Let us look at just one example of this. So again it falls into the category of claims which really were too general or were more general than the advertiser intended so here Arla said that their organic milk was good for the land. They intended by that to refer or organic farming methods and the use of renewable sources and the protection of non-renewable sources on the relevant farmland but they did not qualify the claim in that way and therefore the Advertising Standards Authority looked at the whole lifecycle and said well we would consider good for the land to mean an overall beneficial impact on the environment across the whole product lifecycle and you Arla have not provided the evidence to support that interpretation of the claim.
Kate: Now turning to theASAjut very briefly. It is not surprising that they are also considering some updates and some next steps so as kind of their ad net zero campaign, theASAare encouraging the ad industry to promote more sustainable messages in their advertising and have made it clear that they will take a tough line on misleading environmental ads. They are also going to taking stock of how effective the advertising rules are in governing environmental claims. They have also announced that they are looking to update their guidance so they are finalising guidance which will set out the key principles to ensure that ads do not do not mislead consumers about the environment and ensure that these ads are socially responsible and tackle current issues. There will also be some new guidance which is due next spring. They have also said that they will conduct enquiries into specific issues where urgent carbon reduction is required. The priority areas will include aviation, cars, waste, animal based foods and heating. The ASA's focus will be on making sure they make the right decisions, listen to consumer industry concerns and offer helpful guidance to advertisers. They are also commissioning research into consumer understanding of carbon neutral and net zero claims as well as research into consumer perceptions of hybrid claims in the electric vehicle market.
It is fair to say that theASAis in some flux at the moment and we will likely know some more once the new guidance has been published in the coming months. It is clear that environmental claims will be heavily scrutinised by both theCMAand theASAmoving forward which makes it all the more encouraging that businesses keep a c lose eye on regulatory developments and take additional care when making claims. Dan
Dan: Before we finish I just wanted to briefly touch on this, which is arisen from today on Jaguar Land Rover. We have already seen from many of the examples that in many cases the issue here is not the business simply confecting green claims where it has no green or environmental story to tell. In most cases it is case of their being an environmental story to tell but the claim being too general the business overreaching.
Here we see that even advertising which does not attempt to make any green claims can still be caught up in complaints so this is a Land Rover in a forest. We have seen similar advertising many, many times before and in this case however a campaigning group decide to make complaints about this particular ad presumably because they objected to the idea that high emission vehicles depicted as having higher emissions should not really be advertised at all these days. That is presumably their objection and they put in some complaints which were not really based on the codes in any real sense. They argued that life is so much better without restrictions which was intended as a nod to the end of Covid restrictions, the end of lockdown was about being free to ignore good practice and rules around environmental climate issues and they say that it is irresponsible to show people using a Land Rover in a forest. It might encourage them to go out to ecologically sensitive areas.
Now the Advertising Standards Authority did not uphold these complaints. However it is worth noting that the complaints were made so particularly if you are operating in this kind of space and your responsible products or services which are typically thought to be environmentally damaging or thought to be environmentally damaging by particular campaigners you may well be on the receiving end of any advertising you put out on the grounds that it is irresponsible.
Secondly, the Advertising Standards Authority in time gone by would have dismissed these complaints as not being sufficiently well thought out whereas it has gone through to a formal ruling so the AA is feeling under pressure and we are likely to see more rulings of this nature around responsibility and green issues in advertising.
So just to finish with some tips. Really all I want to say here the overriding points are be specific in your claims and be mindful of the overriding environmental impacts of your products and services. It might make your claim wording awkward, it might be resisted by your marketing teams but it could save you an enormous amount of hassle along with brand and reputational damage as the regulators crack down.
John: Thanks Dan and Kate. We have some time for questions and I have to say if you want to add to the questions already coming please do so because we all like to hear from the people who are participating wherever you are today so please do put them in on the Q&A which should be on your screen and while I have got your attention I should also just say that there will be a feedback form that will come to you as you log out of this webinar. We would be really grateful if you could fill that in partly if you have got any other follow up questions but also if you got any other comments either about how we did today but also about future webinars that we will be doing in future. For those of you who participated last year, we did have a series of webinars and we try to do that again next year so if there are any topics that are particularly of interest to you, then let us know because we would love to keep it relevant to you.
Now question number one everybody. What process should be adopted when seeking to make a complaint to theCMAor ASA? Actually I have had another observation from somebody else that I will weave in here which is also that if you are in the financial services industry then the FCA also looks at this sort of issue so there is a lot of different organisations looking at these issues so it is very relevant probably whatever sector you are in.
Now so the question was what process should you adopt? I will just read the rest of the question because it is all relevant. Is it necessary for the complaint to be made direct to the alleged offender first before submitting this to the relevant authority and are complaints anonymous? So Dan do you want to go first on that one?
Dan: So firstly with the different regulator so the Competition and Markets Authority as you will get from its name tends to look at issues on a market level so it will go after individual businesses but it tends to look at sectors more generally, consider issues which are endemic in the marketplace and that is the approach that I would expect it to adopt sector by sector next year. There is a bit of a grace period essentially so the Competition Markets Authority have said that that crackdown, that enforcement process will begin next year. In the meantime you might have difficulties with the Advertising Standards Authority or another regulator but if you are putting in a complaint then it is really I guess seeking to ensure that the Competition and Markets Authority have those particular issues on their radar when they come to look at that particular sector. If you are complaining to the Advertising Standards Authority let's say about a competitor or a business, so you are not complaining as an individual then you are obliged to put a letter into the advertiser of the other party first and to give them a working week to respond and if they do not respond satisfactorily then you can put your complaint into the Advertising Standards Authority. You are not supposed to put a complaint into the Advertising Standards Authority anonymously where you represent a business in the space of a competitor or you are part of the campaigning group or something like that. If you are a genuine consumer if you are an individual then you are essentially anonymous through the complaint process and that can be abused so certainly there have been cases of businesses asking their employees to put in complaints as if they were individual consumers. That is a sharp practice. If the Advertising Standards Authority has any doubts on that score may well ask the individual to sign something to confirm that they are not employed by a competing business.
John: We have got a question which is what sort of consequences are we likely to see for companies from, it says successful court claims brought by theCMAor Trading Standards. I do not know if you want to go to that or whether you want to talk more generally about consequences of doing stuff wrong.
Kate: Sure so consequences of the court proceedings or from theCMAgenerally. They can issue fines. There could be costs orders levied against you. We have not seen it yet but what they are likely to do in breaches of the Green Clean Code but generally speaking they do try and treat fines and penalties as a deterrent so that others as well making the Green Clean that will be in this case do not go off and continue to flout the rules.
Dan: I guess we should say that technically under the Consumer Protection from Unfair Trading Regulations there are offences by body corporate but they are also misleading advertising under those regulations, there are potential offences by officers of the company who can deny or consent to that activity or to whose neglect it is attributable. Now that kind of action is likely to be reserved for the most severe circumstances but nevertheless that power exists. You have also go the issue of course that even if it is just to theASAwho have lesser powers and essentially rely on the negative publicity associated with publishing an upheld ruling. Do you really want the brand and reputational damage which goes with being painted as greenwashing at this time in this environment in the context of this consumer and media concern?
John: Thanks Dan. I was going to wrap up there but we keep getting more questions in and this one is great. They are all great by the way everybody. The next question is if products or services have green in the product or service name and those products do not have a beneficial impact or the required level of impact to be in accordance with the code on the environment should businesses consider changing the actual products or service name?
Dan: That is interesting and that would depend on we would need to see more detail on that so I am jut plucking one of the air if you take something like Green Flag, well the colour green in their name is because their brand colours are green and they have a green flag so unlikely to be an issue, there but if you have a brand name which is clearly directed at a claim to be environmentally friendly or when placed in the context of the copy which would surround it amounts to an environmental claim then yes there is the possibility of action from the regulators there and we have seen that, I have not seen an example in this context yet but it is certainly a possibility but we have certainly seen it in the context of health and beauty claims for example where products make a claim about a particular health benefit within the name of the product. Certainly those kinds of products have been cracked down on in the past so absolutely I could see the potential for issues with brand or product names.
John: Thanks Dan. We are coming up to the hour but there is one final question if you can answer it in a couple of sentences please. We mentioned that it is business to business as well as business to consumer. Most examples we showed were ads so does it apply to business to business claims in terms of things like bids for projects, supply chain presentations, sort of almost a one on business to business stuff.
Dan: Yes and I take your point. The examples were taken from the Advertising Standards Authority and the Advertising Standards Authority does consider business to business claims and complaints but the majority of its work is in the consumer space. Nevertheless a lot of the issues would also apply in a business to business context. The Advertising Standards Authority would not necessarily have remit although it would in a website context so that is where we see it come up most often. You also have potential issues around misrepresentation, breach of contract those kind of issues which might come up when you are making green claims in a more sort of director customer, director or a particular business customer sales context which might fall outside the ASA's remit. You also have scenarios where you are putting out material press releases etc. that would fall outside of the ASA's remit but would still fall within Trading Standards remit. Now the likelihood of Trading Standards prioritising action in a business to business context that may be more limited but nevertheless the possibility exists. You also have the possibility of simply a backlash so brand and reputational issues someone a campaigning organisation simply pointing out that the claims you are making are misleading.
John: Thanks Dan and we will have to leave it there as we have just slightly run over by one minute but thank you everybody for joining us. Please another plea to fill in that feedback please and let us know what you thought both in relation to this and in relation to anything you would like us to do in future and thank you again for joining us this. See you next time. Thank you.
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