UK advertisers told to ensure green claims are ‘balanced’

As businesses become increasingly aware of the dangers of climate change and the benefits of adopting carbon neutral models, capitalising on the growing demand for environmentally sound products, regulators have seen an uptick in complaints about greenwashing.

The Advertising Standards Authority (ASA) is one of the regulators showing their willingness to take a firm approach to tackling misleading green claims. It has recently updated its guidance on misleading environmental claims in advertising (20 page PDF/450KB), emphasising the importance of businesses communicating with their customers in a transparent and accurate way about environmental issues

New section 3.1 in the updated guidance emphasises the importance of businesses contextualising green claims. It specifies, for example, that environmental claims in ads that relate narrowly to specific products should make that clear to ensure that consumers do not understand the claims as being representative of the entire business. Similarly, ads referencing positive green initiatives from businesses that are in fact responsible for a significant amount of environmental harm are more likely to mislead if they do not include balancing information about that harm, according to the guidance. This is particularly the case in sectors where consumers are less likely to be aware that advertisers’ activities have any adverse environmental impact. 

The guidance goes on to say that ads that focus on specific initiatives as a way of achieving net zero would most likely be deemed as not compliant with the UK’s advertising codes, unless they clearly contextualise those claims with information about the role that the initiative would play in that net zero plan, and how and when net zero emissions will be achieved. Without this information, consumers are likely to interpret these claims to mean that those activities form a significant element of the business’s current activities and that the business is making meaningful progress towards achieving net zero emissions.

A further significant addition in the updated guidance is the warning to advertisers around using imagery of the natural world. According to the ASA, a ‘green’ image can affect how consumers view the claims made in an ad and can lead them to draw incorrect conclusions. For example, consumers could be led to believe that the products or services advertised are greener than they actually are; or they could be given the impression that the business is green as a whole and that the activities of the whole business have a positive environmental impact.

In light of the new guidance, caution should be exercised when using images in ads, not least when an image can become the focus on the ad and give the impression that the activities of the business as a whole have a positive environmental impact.

Recent decisions by the ASA suggest that the contextualising and balancing information that the new guidance requires must be given in the content of the advert itself. Complying with the advertising codes following this new guidance could be a tricky balancing act for advertisers as they will have to carefully consider what balancing information must be given to ensure compliance, and how it should be given in practical terms without affecting the overall impact of the ad.

Other key factors determining compliance

In a recent opinion piece by the ASA, the regulator said its intention is not to ban claims about net zero or green transition ambitions, but they need to “tell a balanced story”.

The new guidance, according to the ASA, is intended to highlight the factors that make ads, and the green claims within them, more likely or less likely to comply with the UK’s advertising codes to support businesses in avoiding misleading consumers. It draws on the principles established by recent ASA rulings and the principles from the Competition and Markets Authority’s (CMA) own guidance on making environmental claims about products and services, to which marketers should have regard when making claims about initiatives designed to reduce environmental impact. 

The ASA has ruled previously on a number of ads which made positive environmental claims about specific aspects or initiatives of a business while the business remained responsible for a significant amount of emissions or harm. The regulator found that these ads breached the Advertising Codes because they were likely to be understood as making claims about a business’s wider environmental impact and positive initiatives, therefore exaggerating the business’s overall environmental credentials.

Wider implications

Although companies in certain industries are more likely to make the sorts of claims that could fall foul of the guidance, it applies across all industries and sectors. Notably, the financial services sector is specifically referenced.

As an example given by the regulator in the guidance, the financial sector’s contribution to funding high-carbon industries is less known among consumers. So ads which reference specific environmentally beneficial initiatives by financial institutions are more likely to mislead if they do not include balancing information about these firms’ significant ongoing contribution to emissions or other environmental harm.

In addition to the ASA’s strengthened stance against misleading environmental claims on the marketing and advertising front, the CMA is another UK regulator boosting its effort in tackling greenwashing, in a bid to protect consumers and reduce unfair competition.

In January 2023, the CMA announced the launch of a new review into the green claims made about products in the fast moving consumer goods (FMCG) sector. This sector covers a wide range of household essentials such as food and drink, toiletries and personal care items. As part of the review, the CMA will analyse the environmental claims made in relation to such products, to consider whether they comply with UK consumer protection law.

The European Commission has also recently drafted a proposal which would clamp down on companies making green claims without substantiation within the EU. Under the draft Green Claims Directive, environmental claims would have to be proven against a science-backed methodology and across the entire lifecycle of a product.

Businesses are facing an ever-increasing burden in the way they promote, and refer to, their green claims. Overstating green credentials or promoting an environmental initiative without appropriate qualifying information will result in adverts being banned by the ASA. This can attract negative publicity and lead to reputational damage. To manage that risk, advertisers should seek advice on environmental claims before they are made, to ‘clear’ them as compliant with the UK’s advertising regulations.