Green claims have become a dominant marketing trend worldwide in recent years. In response to growing concerns about 'greenwashing,' numerous jurisdictions have introduced new advertising regulations, legislation and guidance over the past year. Regulatory enforcement in relation to green claims also continues to increase. 

Whilst there are many ‘themes’ to the approach taken by regulators worldwide, some markets have gone further than others to prevent so-called ‘greenwashing’ in product marketing.  However what is clear is that there is a global emphasis on the need for businesses to: substantiate claims; be transparent and measured about their ‘sustainability’ journey; and avoid overly broad ‘buzzwords’ as well as technical language which is difficult to understand.

This article examines these developments in key jurisdictions, highlighting efforts to ensure genuine environmental responsibility in marketing.

Australia 

In late 2022, Australia’s chief consumer law regulator, the Australian Competition and Consumer Commission (ACCC), conducted an internet sweep of environmental and sustainable marketing claims and found that more than half (57%) of the 247 businesses ‘swept’ were found to be making ‘concerning’ claims about their environmental credentials.   

It has been an offence in Australia for some time to engage in conduct in trade or commerce that is, or is likely to, mislead or deceive (under the Australian Consumer Law (the ACL) - a federal law which is contained within Schedule 2 of the Competition and Consumer Act 2010.   

In December 2023, the ACCC released a “green claims guide” to help businesses comply with the ACL while making environmental claims. The ACCC’s guide includes the following eight (8) principles for making compliant environmental claims: 

1. Make accurate and truthful claims; 
2. Have evidence to back up your claims; 
3. Do not hide or omit important information; 
4. Explain any conditions or qualifications on your claims; 
5. Avoid broad and unqualified claims; 
6. Use clear and easy to understand language; 
7. Visual elements should not give the wrong impression; and 
8. Be direct and open about your environmental sustainability transition. 

Separately, the Australian Association of National Advertisers (AANA), Australia’s industry and chief self-regulatory body for advertisers and marketers, has also released its draft Environmental Claims Code for public comment (which largely mirrors the above 8 ACL principles). 

European Union 

In a harmonising effort, the EU has taken strong steps to tackle greenwashing with a package of measures composed by two different Directives. 

First, the so-called Green Transition Directive – “GTC” - (Directive 2024/825), in force since 26 March 2024, makes several amendments to the list of unfair practices included in the Unfair Commercial Practices Directive (UCPD) and amends the Consumer Rights Directive. It covers all voluntary B2C commercial practices in relation to a product and addresses all types of companies engaging in B2C within the EU, even non-EU-based businesses. 

Among other things, the GTC: 

1. introduces a definition of “environmental claim; 
2. extends the scope of unfair commercial practices to greenwashing, particularly prohibiting unsubstantiated generic environmental claims; 
3. prohibits false claims or concealed information related to durability and obsolescence; 
4. prohibits sustainability labels which are not based on a certification scheme or not established by public authorities; and 
5. requires businesses to provide detailed information about the environmental and social characteristics of their products, particularly, in relation to durability, reparability, and recyclability. 

Second, the EU is about to pass the Green Claims Directive, a proposal presented by the Commission in 2023. It will apply to explicit environmental claims made by traders about products or traders in B2C commercial practices, excluding microenterprises. 

By setting stringent regulations on how businesses can communicate their environmental impact, the Directive seeks to ensure that any claims made are both accurate and verifiable. The main new aspects are: 

• the obligation imposed on traders to carry out a prior assessment to substantiate any explicit environmental claims, including comparative environmental claims; 
• the establishment of the requirements for environmental labelling schemes; 
• the setting out of obligations to the Member States to impose verification mechanism for explicit environmental claims and labelling schemes. Such verification is to be conducted by third-party independent conformity assessment bodies (the “verifiers”).

Denmark 

The Consumer Ombudsman (DCO) has had a strong focus on green and sustainability claims in marketing for some years now.  The newly introduced definitions of green claims and use requirements in the EU legislation have been reflected in the DCO guidelines for some years already. Most recently the DCO has announced an investigation of the textile and fashion business calling attention to the use of unsupported green claims, claims on the use of reused or recycled plastic and the use of various private green labels.

A Danish high court has early in 2024 confirmed and validated the DCO requirements for “stand-alone green claims”, namely that they shall be supported with professional evidence from independent experts in the relevant field including a life cycle assessment. 

The DCO also stated in a recent matter against two Danish online platforms marketing third party fashion products that the platform providers are responsible for sustainability claims made by the advertisers on the platform. The platform providers had actively promoted the goods offered for sale with various discount programs and was therefore responsible for the content uploaded by the advertisers, based on the European Digital Services Act no. 2065/2022. 

United Kingdom 

UK regulators the ASA and CMA have been prioritizing enforcement action against misleading green claims since 2021, when the CMA released its detailed Green Claims Guidance.  Since then, the CMA has launched two large-scale investigations, one of which was into the fashion sector.  This concluded in late March 2024, with the three investigated retailers signing formal undertakings setting out detailed commitments relating to their future use of green claims.  These covered, for example:

• where a retailer has a "green” product range, the criteria for inclusion in the range must be specific and clearly displayed;
• statements re. sustainable characteristics of fabrics: (i) must be specific and clear (“organic” or “recycled”, not “eco” or “sustainable” without further explanation); and (ii) must specify percentage of fabric that is organic/ recycled;
• “natural” imagery must not be used to suggest a product is more sustainable than it really is;
• claims about targets must be supported by a clear and verifiable strategy.

The CMA is conducting a wider compliance sweep in the fashion sector, and will issue guidance to the later in 2024.

The ad industry regulator the ASA has also been busy, issuing 38 rulings on environmental claims in the last three years, and releasing a wealth of guidance on specific aspects of green claims (most recently on green disposal claims, a particular current focus for the ASA, on 5 June 2024). 

Conclusion 

The above is just a snapshot of recent developments in a few key jurisdictions, but the picture is replicated more broadly. For a summary of current and upcoming law on environmental advertising claims across 23 significant global jurisdictions, look out for the forthcoming DLA Piper Guide to Environmental Advertising Claims.