The Competition and Market Authority (CMA)-an authority that in the UK corresponds to Italy’sAntitrust Authority -published on 5/21/21 an outline of guidelines on environmental claims, so-called green claims, to curb greenwashing and misleading advertising. (1)
‘Consumers must be able to trust the environmental claims they read, and companies that make them must be able to prove them’ (Andrea Cascelli. CMA, CEO, 5/21/21).
Green-appeal
The boast of ‘sustainability’ of businesses, goods and services meets growing consumer awareness of issues of social justice, environment and climate, and animal welfare. ‘Ethical consumption’ in England has quadrupled in 20 years, from 11.2 to 41.1 million pounds (GBP). With an estimated average growth of 202-1278 GBP/year per household.
The Co-op’sEthical Consumer report (UK, 2019) shows the surge in sales of green goods and services related to the home (renewable energy, energy conservation, home hygiene products), sustainable food and beverages(Fairtrade, organic, plant-based foods, and from non-caged animals), transportation, and ‘green’ travel. (2)
Sustainability and consumer choices, the European survey
In June 2021 BEUC-the confederation of consumer associations in the EU-published a survey regarding the influence of ‘sustainability’ on European consumers’ choices. The survey was conducted in 11 member countries and reveals, among other things, the widespread propensity (2/3 of respondents) to increase vegetable consumption, choose foods in season and reduce food waste.
Sixty percent of consumers surveyed-beyond veg ‘good intentions’-said they were actually influenced by the ‘sustainability factor’ in their daily purchasing decisions. Also stating that he feels limited in his choice of eco-friendly products by the excessive gap in prices and the lack of objective information that can show their significance. (3)
Green or greenwashing?
Green or ‘dyed green’? How can we distinguish objective, truthful information of real value-in terms of its impact on people and workers, the environment, animal welfare-from sly bragging, perhaps even cloaked in unreliable certifications? (4,5)
Moreover, the initiatives proposed by the European Commission-from the Green Consumption Pledge to the EU Code of Conduct, as noted (6,7)-do not shine in terms of consistency with their stated goals.
British pragmatism is expressed in a guideline aimed at operators in the production and distribution supply chains, but also consumers. To provide everyone with an operational tool on how to present environmentally appreciable products and services. And foster, in the medium to long term, the effective ecological transition of the economic system.
Status quo
The work of theCompetition and Market Authority (CMA ) moves from an analysis of the status quo in Great Britain. Examination of environmental claims used in marketing information, methods and objectives, impact of green marketing on consumers. And thus, dissemination and frequency of messages, expectations generated about products and services variously presented as ‘green‘ and/or ‘sustainable,’ influence on purchase choices.
The status quo looks promising and bleak at the same time. On the one hand, as a result of the analysis, it is estimated that more than half of British consumers actually consider ‘environmental credentials’ as a parameter of choice; on the other hand, greenwashing characterizes 40 percent of green marketing, particularly inecommerce. Intervention is therefore necessary, for the protection of consumers and the market itself.
Green claim, definition
I green claims are defined as ‘Any statement that suggests the favorable environmental impact of a product, service, brand, or activity. Including statements that suggest or give the impression that a product or service:
(a) has a positive impact or no impact on the environment,
(b) is less harmful to the environment than the previous version of the same product or service, or
(c) is less harmful to the environment than competitive goods and services.’
Green claims, declinations
Claims subject to the guidelines-whether explicit or implicit, literal or graphic-may be included in trademarks, labels, advertisements, marketing materials, etc. They can be referred to the impact on the environment in general or to the impact on a specific element (e.g., air, water, soil).
Also included are ‘sustainability’ claims, i.e., statements suggesting adherence to sustainable development and/or consumption criteria, i.e., drawing attention to climate change, biodiversity, animal welfare, labor, and corporate social responsibility (
Corporate Social Responsibility
, CSR). In relation to products, services and activities of the operator.
GREEN CLAIM, THE SIX RULES
The following six rules are proposed as a vademecum for using green claims that are fair, to consumers and to the market. As a reflection of activities possibly useful to the environment.
1) TRUTHFULNESS AND ACCURACY
The claim must offer information that is objectively true, that is, consistent with the characteristics and/or properties of actual environmental significance of the product or service. Therefore, untrue or irrelevant news (e.g., boasting of standard features, emphasis on marginal benefits in relation to high environmental impact activities), as well as exaggerated or hyperbolic news, should be excluded.
Accuracy postulates an exact description of the reasons motivating terms such as ‘green,’ ‘sustainable,’ ‘eco-friendly.’ With a requirement to specify when these attributes refer only to a process step or to a part of the good or service. With the burden of clarifying any conditions on which the realization of the promised effect depends (e.g., reuse, recycling).
1) Some examples:
– the claim ‘recyclable‘ on a bamboo item (whose real value pertains to reuse, among other things) may be misleading if it contains a plastic part that hinders, among other things, the separate handling of materials after use,
– the ‘with organic yeast‘ boast on the label of a non-organic bread. Deceptive, as well as contrary to reg. EC 834/07 (according to which references to organic are allowed only when at least 95 percent of the ingredients are certified as such. See Art. 23.2.a.ii).
2) CLARITY AND NON-AMBIGUITY
Information must be clear and transparent, not ambiguous. (8) With regard to individual claims and communication as a whole, to be evaluated from the perspective of the average consumer. The terms and wording used should have as unambiguous a meaning as possible. To be specified, if anything, also through easily accessible insights (e.g., QR-code).
One example out of all, the ambiguity of the words ‘recyclable‘ on the label of an object or product of which only the outer packaging is recyclable, or even worse only a part of it.
3) COMPLETENESS OF INFORMATION
Claims should not omit or conceal important information. Omitted news can affect consumer choices in the same way as incorrect or ambiguous news. Green claims leverage, primarily, elements such as:
– The source and origin (e.g., ‘natural‘) of the materials,
– processes and production methods,
– packaging, transportation, product use and handling.
A statement that emphasizes only some of these elements, neglecting others that are important but not as appreciable, may distort consumer expectations. A couple of examples:
– a soup proposed as ‘Nature Friendly’ that, while made from organic ingredients, is packaged with non-recyclable plastic subject to landfill disposal,
– the claim ‘compostable‘ referring to a container that can only be properly disposed of in an industrial composting facility and not in the household.
4) FAIR AND RELEVANT COMPARISONS
Comparisons must be fair and meaningful so that consumers can make informed choices between competing products. Therefore, generic statements – e.g.’greener/ecological/sustainable’,‘more environmentally friendly‘, ‘lower energy impact‘ – are considered misleading in the absence of:
– Comparison with other products that meet the same (or similar) needs,
– evaluation on the basis of relevant, verifiable, and meaningful (i.e., relevant) characteristics.
In the case of an item of clothing, for example, the mere green (or greener) boast is in itself meaningless and misleading, in the absence of a term of comparison (e.g., the classic version of the same product, or competitors’ products) and clarification on:
– elements placed as the basis for comparison (e.g., water consumption, energy, virgin raw materials, presence of natural rather than synthetic fibers),
– measurement criteria adopted (e.g., +50% cotton compared to a previous line, followed by a list of other materials used).
5) LIFE-CYCLE ASSESSMENT
The green claim must consider the entire life of the product(Life-Cycle Assessment). Measuring environmental impact must therefore also take into account the upstream stages of the supply-chain and the individual components of the product itself (how and where it is extracted and/or processed). But also how it is used and efficient, how it is disposed of and its waste, as well as the size of the claimed environmental benefit and any adverse impacts.
A product designated as ‘low-carbon,’ for example, cannot exclude the environmental impact of transportation from the calculations. Not even where it refers on the label itself, in the margin of the ‘green claim,’ a clause such as ‘excluding transportation.’ This also qualifies as greenwashing, in other words, false advertising.
6) SCIENTIFIC SUBSTANTIATION
The operator must therefore provide truthful, complete and accurate news, as well as corroborated by credible and up-to-date(scientifically sound) scientific evidence. And the scientific substantiation of green claims must be made available to authorities upon request.
The household cleaning product presented as ‘the most sustainable cleaning solution in the UK,’ boasting of using natural, non-toxic and biodegradable substances and the ability to refill bottles, for example, must actually prove to be so. That is to say, the operator must be able to substantiate the claim with scientific, relevant and objective evidence that supports the claimed top position m the green ranking of products in that category.
Legal context
The Antitrust Guidelines in Great Britain express a careful and circumstantial reading of the principles underlying the Unfair Business-to-Consumer Commercial Practices Directive (dir. 2005/29/EC). (9) They can therefore also be usefully considered in Italy, where the Unfair Commercial Practices Directive has been transposed through the Consumer Code, the enforcement of which is entrusted to the Autorità Garante per la Concorrenza e il Mercato (AGCM, so-called Antitrust). (10)
Adherence to the guidelines, however, does not exclude the pattern of malfeasance and possible liability of operators, which are in any case subject to evaluation ‘on a case-by-case basis. Nor, as is obvious, can they be understood as ‘alternatives’ to the applicable standards. In fact, operators using green environmental claims must always ensure their compliance with:
– Sector-, supply chain- and product-specific requirements (e.g. food and drink, organic legislation, etc.),
– General rules to protect the market, consumers, animal health and welfare, and the environment.
Best practices and business strategies
The UKAuthority insists on the preventive purpose of the guidelines, compliance with which can enable operators to reduce the risk of legal challenges and litigation. (11) Business strategies, we would add, should devote attention to legality and good practices also with a view to preventing possible reputational damage and contingent liabilities that may result (e.g., the communication and marketing campaigns to recover the image marred by possible scandals).
The document-now subject to extensive public consultation of relevant social partners(stakeholders)-will be updated as appropriate, with a view to the publication of its final text, which is expected in fall 2021. In the reasonable expectation that this will mark a halt to misleading advertisements that also affect the food sector, especially in high-margin product categories such as plant-based foods. Just in 2020, the ASA(Advertising Standards Authority, UK) sanctioned the giant Quorn, for boasting over the top about the carbon footprint of its products.
Dario Dongo and Giulia Orsi
Notes
(1) CMA, Competition & Markets Authority. Draft guidance on environmental claims on goods and services, CMA139, 5/21/21, https://assets.publishing.service.gov.uk/media/60a66a9cd3bf7f73893a8e1f/Draft_guidance_on_environmental_claims_on_goods_and_services-.pdf
(2) Co-Op (2019). Ethical Consumer. Twenty years of Ethical Consumerism, 2019. For the purposes of the report, ethical consumerism is defined as a decision to allocate resources, including consumption and investment, motivated by a desire to contribute to the protection of human rights, social justice, the environment or animal welfare. https://assets.ctfassets.net/5ywmq66472jr/5hkc6bA1y2eNRGsHJzyvX2/14449115fafac1c02cf4f9fd5a52b13b/Twenty_Years_of_Ethical_Consumerism_2019.pdf
(3) BEUC, The European Consumer Organization (2020). One bite at a time: consumers and the transition to sustainable food. Analysis of a survey of European consumers on attitudes toward sustainable food. https://www.beuc.eu/publications/beuc-x-2020-042_consumers_and_the_transition_to_sustainable_food.pdf
(4) Dario Dongo. Private label and sustainable development, words and deeds. GIFT(Great Italian Food Trade). 23.1.20, https://www.greatitalianfoodtrade.it/mercati/marca-del-consumatore-e-sviluppo-sostenibile-parole-e-fatti
(5) Marta Strinati, Dario Dongo. Palm oil, soybean, wood, coffee, cocoa. What is the purpose of sustainability certification? Greenpeace report. GIFT (Great Italian Food Trade). 5/16/21, https://www.greatitalianfoodtrade.it/certificazioni/olio-di-palma-soia-legno-caffè-cacao-a-che-serve-la-certificazione-di-sostenibilità-rapporto-di-greenpeace
(6) Dario Dongo, Sabrina Bergamini. Green Consumption Pledge Initiative, between sustainability and greenwashing. GIFT(Great Italian Food Trade). 14.2.21, https://www.greatitalianfoodtrade.it/idee/green-consumption-pledge-initiative-tra-sostenibilità-e-greenwashing
(7) Dario Dongo, Giulia Orsi. The EU code of conduct for an (in)sustainable agri-food supply chain. GIFT(Great Italian Food Trade). 3.5.21, https://www.greatitalianfoodtrade.it/idee/il-codice-di-condotta-ue-per-una-filiera-agroalimentare-in-sostenibile
(8) Clarity, transparency and non-ambiguity of consumer information are also specifically prescribed, with regard to food products, by Reg. EU 1169/11 (Articles 7 and 36)
(9) Dir. 2005/29/EC, concerning unfair business-to-consumer commercial practices in the internal market. Consolidated text as of 12.6.05 at https://eur-lex.europa.eu/legal-content/IT/TXT/?uri=CELEX%3A32005L0029&qid=1624639970409
(10) Legislative Decree. 6.9.05 n. 206. Consumer Code. Text updated as of 12/24/20 at https://bit.ly/3qsWz6F
Dario Dongo, lawyer and journalist, PhD in international food law, founder of WIISE (FARE - GIFT - Food Times) and Égalité.
Graduated in Law at the University of Bologna, now enrolled in the master of law of agri-food markets at the University of Turin. She is a practicing lawyer.
