Regulation tightens for brands making ‘carbon neutral’ and ‘net zero’ claims in ads

It follows on from a report released by the regulatory body last year, which recognized that there were no official definitions for terms such as carbon neutral or net zero and no fixed rules for how businesses should achieve these goals.

It also highlighted the fact that claims around carbon offsetting were a primary cause of confusion, as people are unaware of what offsetting entails, think carbon neutrality implies absolute carbon reductions and feel misled when the role of offsetting in achieving carbon neutrality is explained to them.

Updated guidance

In light of the low understanding and lack of consensus around the meaning of carbon neutral and net zero claims, CAP and BCAP advise advertisers to take into account the following guidance, which draws on key principles of the CMA guidance, and, if followed, means that claims are less likely to mislead:

• Avoid using unqualified carbon neutral, net zero or similar claims. Information explaining the basis for these claims helps consumers’ understanding, and such information should therefore not be omitted.

• Marketers should ensure that they include accurate information about whether (and the degree to which) they are actively reducing carbon emissions or are basing claims on offsetting, to ensure that consumers do not wrongly assume that products or their manufacture generate no or few emissions.

• Claims based on future goals relating to reaching net zero or achieving carbon neutrality should be based on a verifiable strategy to deliver them.

• Where claims are based on offsetting, they should comply with the usual standards of evidence for objective claims set out in this guidance, and marketers should provide information about the offsetting scheme they are using.

• Where it is necessary to include qualifying information about a claim, that information should be sufficiently close to the main aspects of the claim for consumers to be able to see it easily and take account of it before they make any decision. The less prominent any qualifying information is, and the further away it is from any main claim being made, the more likely the claim will mislead consumers.

What are the next steps?

Following the publication of the guidance, the ASA has launched a six-month-long review through which it will assess its impact on carbon neutral and net-zero statements in ads.

If that monitoring concludes that carbon neutral/net zero claims are being made but the types of evidence that underpins them are questionable, the ASA will invite CAP to launch a review which would seek to provide guidance about what forms of evidence are more or less likely to be acceptable to substantiate such claims in advertising. That review will take account of expert insights, policy developments in the UK and other jurisdictions and, where appropriate, consultation with interested parties.

For many, the latest crackdown is welcome. Abbie Morris, chief exec of Compare Ethics, an ESG compliance platform, says she expects the ASA will find the data it collects “questionable, due to the lack of standardization for these claims up until now.”

She says the ASA’s move will help ensure “everyone is speaking the same language on carbon.

“Brands that fail to take action to understand their carbon neutral and net zero data gaps face huge new regulatory, financial and reputational risks. From legal action and fines to spikes in operational costs from having to take down non-compliant claims – there are direct cost implications from day one. When you add this to the reputational damage with consumers and investors, businesses simply cannot afford to get this wrong in this environment. Businesses must take the first step in understanding their data gaps for compliance so they are confident that they will not fall foul of rules in the UK or other markets.”

The ASA itself says it is aware that some organizations are making carbon neutral and net zero claims that are “entirely unqualified and do not explain the basis on which they are being achieved.” It adds that unqualified claims are likely to breach existing rules and that it will be taking proactive action immediately to address such claims.

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