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Greenwashing Policy & Regulation Sustainability

No more greenwashing by omission: UK ad regulator reveals stricter code

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By Ellen Ormesher, Senior Reporter

June 23, 2023 | 8 min read

The highly anticipated update from the ASA on environmental claims singles out the behavior of high-carbon industries and includes fortified mandates on the substantiation of ‘carbon-neutral’ claims.

Deforestation

The ASA has released updated guidance on environmental claims in advertising / Unsplash

Following a number of recent rulings against high-carbon sectors including fossil fuels, aviation and water, the CAP (non-broadcasting advertising code) and BCAP (broadcasting advertising code) has released new guidance on brands making green claims in a bid to protect the public from being misled.

Back in October 2022, the regulator identified that ‘confusing’ environmental claims were damaging brand reputations. Consumers, it said, felt deceived when they discovered the role of carbon offsetting in brands’ net zero strategies and carbon-neutral claims. It triggered a six-month review as to how those claims were being substantiated, with the Advertising Standards Authority (ASA) ruling today (June 23) that offsetting information must be included in claims, with specific reference to the supplier that has been used.

An investigation by The Guardian previously found that more than 90% of credits from the world’s largest carbon credit supplier were worthless.

“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,” the directive spells out.

In a landmark moment, the most polluting industries will also face greater scrutiny on the balance of their communications. Ads that refer to lower-carbon activities without including information about a company’s overall environmental impact would now face review by the regulator.

“Where businesses are responsible for a significant amount of harmful emissions or other environmental harm, ads which reference specific environmentally beneficial initiatives are more likely to mislead if they do not include balancing information about the business’s significant ongoing contribution to emissions or other environmental harm,” the guide explains.

In real-world terms, this might target oil firms that communicate about their lower-carbon solutions disproportionately more than they invest in them – as was revealed to be the case last year in research by the think tank InfluenceMap.

The ASA says it acknowledges that consumers are generally aware that certain industries, such as those involved in fossil fuel extraction, have historically contributed to global emissions and other environmental harm. It also considers that consumers are likely to be aware they are continuing to engage in those activities today and that while many of these industries aim to significantly reduce their emissions in response to the climate crisis and climate goals, consumers are unlikely to be aware of how much progress is being made in reality, “and the significance of their green activities as a proportion of their total activities currently and in the future and their progress relative to any continuing emissions or other environmental harm.”

Just last week, Shell was condemned by climate campaigners for dropping its oil reduction target after newly-appointed CEO Wael Sawan announced $40bn of investment in new oil and gas, contrasted with $10-15bn in ‘low-carbon’ alternatives.

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The ASA went on to ban an ad for the big oil firm, created by agency Wunderman Thompson, for misrepresenting the extent of Shell’s investment in green energy alternatives. This ruling was in line with the ASA's emboldened stance that “Without qualifying information around this knowledge gap, ads making claims about specific environmental initiatives or ads that promote more general positive environmental credentials, are more likely to mislead.”

Overall, the directive puts a much greater emphasis on the substantiation of claims than we've seen previously and brands will no longer be able to use loose language without backing it up. As the regulator outlines, previous cases where substantiation proved inefficient included phrases like “eco-friendly,” a bottle being “100% recycled” and offering 100% renewable energy to consumers “without harming your world.”

So-called relative claims will now require “verifiable evidence” that proves an environmental benefit over other comparable products. “Marketers should set out the relevant information in the ad or signpost how the information used to make that comparison can be checked by the target audience,” the ASA says.

The CAP and BCAP explain that it has sanctioned these stricter guidelines because it acknowledges the importance of advertising in facilitating the transition to more sustainable consumer behavior and business practice. While the guidance does not prevent marketers from making environmental claims about their products or services, it does identify factors that make such claims more likely or less likely to comply with the codes.

This means brands would not face legal or financial penalization as they would in other markets such as the EU, but the social damage to brands found to be non-compliant will likely be a motivator.

The CAP and ASA say they are “committed to supporting industry in its interpretation and application of the guidance and ASA rulings through training opportunities.”

Want to learn more about the most important issue of our time? Senior reporter Ellen Ormesher explores the role of advertising and marketing in the climate crisis. Get the briefing here.

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