25th February 2022
The Advertising Standards Authority (ASA) upheld complaints that challenged whether three similar ads for drinks brand Innocent exaggerated the total environmental benefit of the products being advertised and were therefore misleading.
The ASA, along with other regulators such as the Competition and Markets Authority (CMA) and the Financial Conduct Authority (FCA), continue to crack down on businesses that are seen to be “greenwashing” – the practice of making exaggerated claims about a business’ environmental credentials and the sustainability of its products, services and environmental impact.
The ads in question implied that purchasing Innocent products was a choice which would have a positive environmental impact. The ASA concluded that the ads were misleading and ruled that they must not appear again in their current form.
The Advertising Codes, which contain specific rules about making green claims for products or services, can be found here. They require that the basis of environmental claims must be clear and that absolute claims must be supported by a high level of substantiation. Claims such as “greener” can be justified if the advertised product or service provides a total environmental benefit over that of the advertiser’s previous product or service or competitor products or services and the basis of the comparison is clear. Claims must be based on the full lifecycle of the advertised product, unless the ad states otherwise.
While the ASA acknowledged that Innocent was undertaking various actions aimed at reducing the environmental impact of its products, that did not demonstrate that its products had a net positive environmental impact over their full lifecycles. The ASA also noted that Innocent’s drinks bottles included non-recycled plastic and that the extraction of raw materials and subsequent processing of those materials in order to produce the bottle would have a negative impact on the environment.
Greenwashing is, of course, part of the wider ESG agenda – one of the biggest boardroom issues of the day.
As we reported previously when we highlighted the CMA’s Green Claims Code and various FCA activity, pressure is mounting on businesses in all sectors to clean up their act by virtue of the trend towards ‘green litigation’ – complaints and claims brought for a whole host of environmental/climate-related reasons, including sustainability target failings, insufficient climate-related disclosures, misleading green credentials and inaccuracies in environmental warranties. We have published briefings on recent cases involving all of these types of green claims.
The Government recently published guidance to help companies and limited liability partnerships understand how to meet new mandatory climate-related financial disclosure requirements which apply to reporting for financial years starting on or after 6 April 2022. Just in the last few days, the European Commission announced a proposal for new corporate sustainability due diligence rules that would apply not only to EU companies, but to non-EU companies active in the EU with a certain turnover threshold generated in the EU. We will continue to monitor and report on key legal and regulatory developments in this area.
Walker Morris’ Regulatory and Commercial Dispute Resolution teams can help businesses with the drafting or updating of appropriate policies and procedures to guard against greenwashing; with the provision of staff training on consumer protection, misrepresentation and/or specific greenwashing issues; with an audit of your procedures and products so as to assist in the prevention of greenwashing claims; with the strategic dispute resolution response to any greenwashing or other consumer protection complaints or allegations made against a business; or with wider commercial or dispute resolution advice in the context of the ESG agenda. Together with our specialist colleagues from across the firm, we can work with businesses at every step of their journey to create, implement and deliver an effective ESG strategy.