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Article · 26.08.2021

Greenwashing – when are climate and environmental product claims misleading?

We put the spotlight on three of the largest greenwashing traps and identify special areas of attention.

Having good intentions is not enough for companies wanting to market claims of climate and environmental friendliness to consumers. These days, there are very strict rules on communication, documentation and statements of fact to prevent any climate and environmental claims from being misleading – so-called greenwashing.

What is greenwashing?

As ‘climate’, ‘sustainability’ and ‘organic’ are terms featuring increasingly in both global and national agendas, such values are ever more popular with consumers.

Accordingly, the climate crisis not only places demands on businesses’ CSR policies, but also commercial requirements about accommodating consumer demand for sustainable production, organic products, environmentally-friendly waste management and more.

As a result, marketing communication making green claims, using terms like climate-friendly or sustainable, carries valuable goodwill, and for that reason, the Danish Consumer Ombudsman has begun to crack down on incorrect, exaggerated or undocumented climate and environmental claims. Misleading marketing of that kind is what is known as greenwashing.

It is important to be aware that greenwashing has given rise to a mishmash of rules, general practices and strict documentation requirements, and it is not unusual that even companies with the best of intentions are hit with severe penalties.

In the following, we put the spotlight on three of the largest greenwashing traps and identify special areas of attention.

1. General claims, such as ‘climate-friendly’

General claims include vague claims such as ‘climate-friendly’, ‘better for the environment’, ‘green’, and similar.

According to the Consumer Ombudsman, consumers will perceive such claims as an indication that a product or service has generally less of an impact on the climate or environment than other products or services available on the market.

For that reason, such claims will be deemed misleading unless the product or service is in fact among the very best in the market in terms of climate or environmental impact. If all products on the market are of equally good quality, such general claims may not be used.

A company marketing a product must be able to document that a claim meets these requirements, and it must cover the product’s entire life cycle. In other words, every aspect of environmental impact must be considered, all the way from procurement of input materials to consumption and final disposal, if relevant, including any transport during the intervening period.

Real-life example:

The documentation requirement became a problem for a battery dealer who had marketed his batteries as “the most sustainable batteries on the market” and “the world’s greenest battery”. The dealer was unable to provide adequate documentation for the correctness of his environmental claims. The Consumer Ombudsman therefore determined the claims to be misleading.

2. Climate neutrality and compensation schemes

Claims like ‘carbon neutral’ or ‘climate neutral’ to a product give consumers a legitimate reason to believe that there are exactly zero greenhouse gas emissions from the product during its entire life cycle. Unlike general claims, this type of marketing is quite specific and therefore subject to strict documentation requirements.

First of all, calculations based on scientifically recognised methods must be made showing that there are in fact zero total emissions.

Secondly, the company must draw up an emissions reduction plan that must be verified by an independent body as well as climate accounts showing current emissions and expected future emissions.

If it turns out that the actual emissions are not zero, an alternative may be to buy EU quotas or carbon credits from internationally recognised carbon reduction projects to compensate for the emissions. Such quotas or credits must be in place at the time the product is marketed or at least in connection with regular deliveries of the products.

Buying credits from projects that have not been pre-approved may be acceptable if an independent body is able to provide equally reassuring documentation for compensation of the emissions.

Moreover, information about the compensation scheme must always be provided and described in the marketing material in a clear and precise manner.

Real-life example:

The Consumer Ombudsman became aware that some makers of electric vehicles stated their cars produced “zero emissions while moving” and similar claims, but without mentioning that carbon emissions do in fact result from the generation of the electricity consumed by the vehicle. This was deemed misleading, because a moving car does in fact result in emissions overall.

3. Use of certification and labelling scheme

One of the most effective ways of marketing climate and environmentally-friendly messages is by obtaining official certifications and labelling, because this will generally signify compliance with the documentation requirement. However, a company must always be able to document compliance with the requirement on request.

Such official certifications include the Swan label, the Ø label, the OEKO-TEX label, the Fairtrade label, the GOTS label and others.

In other words, using certifications may have huge marketing value. Many businesses also use unofficial environmental labels or certifications issued by private or quasi-public organisations, such as NGOs, because in many cases they have less stringent requirements while still sending a clear message to consumers about climate and environmental friendliness.

For that reason, the Consumer Ombudsman makes the following stipulations to the marketing of unofficial labelling schemes:

  • The issuer of the labelling scheme must be clearly identified.
  • Relevant stakeholders must be involved in the process of drawing up clear criteria for the scheme.
  • The criteria must be determined and maintained on the basis of an assessment of the entire life cycle of the product or service, involving scientifically well-founded calculation methods.
  • The scheme must include independent verification by a third party of the life cycle assessment, the criteria and the use of the label.

A common requirement for all labels and certifications is that their meaning must be stated clearly and concisely on the packaging or in other marketing material. This information may in some cases consist of a reference to the company’s website or other places where the meaning of the label and the standards that the product or service conform to are explained in greater detail.

Marketing communications review – free of charge

Have you already had a go at developing green messages?

We offer you a free review of your marketing: we will check that your material complies with the Consumer Ombudsman’s guidelines on how to avoid misleading information and that it generally conforms to current legislation, so your company will not be accused of – or incur a fine for – greenwashing.

If you haven’t launched your activities yet, but are planning a campaign, labelling a product or other marketing activity, we offer expert advice to help you ensure that your messages are worded correctly – that is, comply with current legislation. For example, we can make sure that you meet the documentation requirements and references to relevant recognised bodies, criteria and labelling schemes.

Contact attorney Simon Gjern Pedersen for advice based on your company’s specific circumstances and a no-obligation offer.

 

Avoid greenwashing - contact Simon