Commercial | Data, Privacy & Information Security | Intellectual Property
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Over the past few months, there has been an increase in the environmental claims that have been singled out by the Advertising Standards Authority ("ASA") as breaching advertising rules. These rulings form part of the ASA's continued attempts to ensure consumers are not being misled by the claims companies are making about their green credentials. Given the proposals to grant the Competition and Markets Authority ("CMA") enforcement powers (including levying financial sanctions) for breaches of consumer laws, these rulings will be of particular interest to marketing professionals.
With decarbonisation high on everyone's agenda, it is only natural that companies are trying to do what they can to contribute to the net-zero transition, as well as doing their best to read the room in terms of what consumers want when it comes to sustainability. As such, it is important for those signing off on advertising and marketing ("A&M") content to have a sound understanding of the rules surrounding environmental claims and learn from the examples we have seen from the rulings handed down by the ASA so far.
In this article, we look at the following:
The UK Code of Non-broadcast Advertising and Direct & Promotional Marketing ("CAP Code") and the UK Code of Broadcast Advertising ("BCAP Code") set out the rules the ASA will look at when considering advertising complaints and deciding whether or not to uphold such complaints as part of their rulings. Sections 11 and 9 of the CAP Code and BCAP Code, respectively, specifically deal with environmental claims.
Amongst these rules – and a rule we see coming up again and again - is the general requirement that the basis of environmental claims must be clear and that any unqualified claims could end up misleading consumers, where they omit significant information.
Another 'popular' rule, when it comes to the breaches we have seen, is that absolute claims made must be backed up with a high degree of substantiation. The rules state that "comparative claims such as "greener" or "friendlier" can be justified, if the advertised product provides a total environmental benefit over that of the marketer's previous product or competitor products and the basis of the comparison is clear."
Apart from this, further rules require, among other things, that terms used in advertising must be clear, claims must not be portrayed as universally accepted if that is not the case, marketing communications must not mislead consumers about the environmental benefit of the advertised product and claims must generally be based on the entire lifecycle of a product.
One certain thing is that the ASA does not have its eye on one specific sector. The rulings we have seen over the past month, rising to six rulings relating to green claims in December 2023 up from only two rulings on the same topic the two months prior, show that the ASA is determined to crack down on environmental claims where they have been improperly made, no matter the industry in which companies operate.
Some of the more recent rulings have related to the following sectors:
In December 2023, three airlines (Air France, Lufthansa and Etihad) had adverts banned by the ASA on grounds that the environmental claims they were making could not be properly substantiated and the ads were therefore likely to mislead consumers.
The rulings formed part of a wider enforcement initiative being conducted by the regulator, using AI to proactively search online for adverts that had the potential of breaching advertising rules. The ads included wording such as “environmental advocacy”, “fly more sustainably” and “committed to protecting the environment: travel better and sustainably”.
The ASA noted that, on the basis that “air travel produce[s] high levels of both CO2 and non-CO2 emissions, which were making a substantial contribution to climate change”, the regulator was not convinced that such claims held water. There are currently no commercially viable technologies in aviation that would substantiate green claims in the sector.
In relation to the statement that customers would “fly more sustainably”, the ASA considered that this was unqualified without further clarity being offered in the ad. This caused an issue because understanding how the claim worked in practice would be material information for consumers to make an informed decision.
In October 2023, Nissan got caught out when one of their TV adverts was not sufficiently clear on the fuel source of its Qashqai and X-Trail vehicles (with “e-Power”). The ad focused heavily on electricity (despite the vehicles also being powered by a petrol engine) and this would likely have the effect that consumers would think the vehicles are better for the environment. The key points raised by the ASA in their ruling were the requirements that environmental claims must be clear and that all of the terms used in an advertisement must be clear to consumers, which was not the case in this instance, due to the confusion around fuel sources.
Similarly in November 2023, Renault came under the ASA’s microscope for telling consumers to “RETHINK HYBRID” and that their Austral model could provide “up to 80% electric driving in the city.” The ASA stated that “there were numerous possible interpretations of the claim, including that it reflected the proportion of an individual journey, regardless of distance, that the vehicle was able to cover without having recourse to using petrol or diesel.” The main issue was the fact that the basis of Renault’s claim was unclear and, in addition, that without further information in the ad, consumers would be unable to make an informed decision when deciding whether or not to purchase the product. The ASA held that material information had been omitted and therefore the ad was misleading.
This sector is a particularly interesting one, given its players’ significance in realising the net-zero transition. In October 2023, Repsol was found to have breached advertising rules by posting a paid-for online display ad seen on the Financial Times website and in the FT’s digital energy newsletter, which featured an image of a water droplet with text stating “Renewable hydrogen, another alternative to reduce emissions.” The ad was complained of because information about the company’s business activities (and their effect on the environment) was omitted. The ASA considered, amongst other things, whether the target audience (which was likely to include investors) would know that renewable hydrogen was in its infancy and not yet commercially available. It also looked at the company’s emissions data and the fact that their renewable hydrogen production had not started yet – this was due to start in 2024. Further, the company was still investing in oil and gas exploration and the oil and gas side of the business was at the time of the ad considerably larger than its net zero activity. Ultimately, this was material information viewers of the ad would require to make an informed decision to invest and therefore the ad was likely to mislead.
In December 2023, Equinor had an ad in the Economist banned, which, in addition to the company’s involvement with oil and gas, set out the company’s efforts in relation to wind and carbon capture, highlighting its role in providing “broad energy for a brighter future.” The ad was found in breach of advertising rules by the ASA, because it omitted significant information about the overall environmental impact of Equinor’s business activities. Similar to the instance above, advertising rules require significant information to be included to support unqualified green claims, otherwise it is likely to mislead. The ASA considered that “further information about the overall proportion of Equinor’s business model that comprised renewable energy and [carbon capture] was material information that should have been included” and therefore, the ad was in breach.
In December 2023, Charles Tyrwhitt was found in breach of marketing rules, because an ad made an unqualified statement in relation to the company’s green credentials without sufficiently backing it up. Specifically, the ad stated that “[It is] proud to be a Carbon Neutral business.” The company had based its claim on a report by a sustainability consultancy, as well as sustainability guidelines published by the British Standards Institution. Despite doing its research and relying on the advice it received on its sustainability efforts, the claim itself had not included the basis upon which the statement had been based. This was information consumers would need to know in order to make their own assessment of whether or not the company was indeed carbon neutral.
The last claim we looked at related to an advert posted on Instagram by Brewdog in December 2023. The ad stated: “BEER FOR YOUR GRANDCHILDREN” and included wording in a childlike, handwritten form saying: “drink it for me” and showed a childlike drawing of an earth on fire. The ad ultimately got banned, but interestingly, Brewdog argued that they had directed customers to a link in their bio for more information on their climate efforts. When responding to the ASA, the company argued that this was standard practice and therefore the ad should not be considered to be in breach of advertising rules. The ASA considered that Instagram’s 2,200-character limit was sufficient for the company to qualify its claim and that referring customers to a link on a separate webpage would not be sufficient.
Some of the rulings handed down by the ASA are clearer than others. Some might even seem a little harsh. It is for this reason that our clients should be particularly careful when they go about making green claims. We set out a few suggestions of what A&M departments might consider doing when dealing with environmental claims going forward:
It is interesting to see the rise in the ASA's rulings on environmental claims. Given its commitment to ensuring that marketing and advertising is as fair for consumers as possible and in light of the importance of climate change to an increasing number of people, we expect to see these types of rulings increase in the months to come. It will be important for companies (and particularly their A&M teams) to stay ahead of the curve to protect their reputation and keep consumers sweet. Further, given the likelihood of the proposed enforcement powers of the CMA coming into force in future, now is a very good time to take note of the significance of the rules and be sure to comply, so heavy fines are not levied for any breaches.
For those interested in the ASA and advertising rules more generally, please take a look at our monthly newsletter, Marketing Matters, which covers monthly rulings and sets out key takeaways for A&M departments. The latest edition can be found here.