CEP Magazine (March 2024)
Much is made of the need for accurate reporting in accordance with recognized standards. But this month, I’m returning to a topic I briefly touched on in July 2023, when I discussed the potential for misleading images and statements regarding social issues in connection with an organization’s general marketing activities.[1] A similar issue arises in connection with environmental matters where a company’s advertising can easily create significant risk.[2]
In June 2023, the U.K.’s Committee of Advertising Practice (CAP) published updated guidance aimed at assisting organizations in interpreting the U.K. Code of Non-broadcast Advertising and Direct Promotional Marketing (the CAP Code) and the U.K. Code of Broadcast Advertising. CAP is the sister organization to the Advertising Standards Authority (ASA), which serves as the U.K.’s independent advertising regulator. CAP is responsible for writing the U.K.’s advertising codes. The guidance addresses misleading environmental claims and social responsibility in advertising.
In November 2023, the ASA published a research report, Consumer Understanding of Green Disposal Claims in Ads.[3] While the results generally showed a positive attitude toward recognition of climate change as an important issue, it was clear that some commonly used terms were well understood (e.g., recyclable or recycled) while others were not or were confusing (compostable, biodegradable). Participants consistently felt that greater regulation was needed after learning the proper definitions of these terms.
Previous research from ASA in September 2022 found little consensus on the meaning of terms like carbon neutral and net zero. Accordingly, the June CAP guidance advises companies to avoid using those terms.
The ASA website is filled with rulings involving companies deemed to be in violation of U.K. standards for environmental claims.[4] I recommend looking through the cases as a way of identifying risk areas in your own organizations.
Whether your organization is subject to the rules in place in the U.K. or not, the guidance and research discussed here are valuable. They represent clear and practical concepts that any organization can follow to steer clear of confusion or outright assertions of fraudulent advertising in connection with environmental claims.
Like what I indicated in my July column on social issues, the risk of misleading statements regarding environmental issues in connection with product marketing is a significant one that organizations should address.
1 Gerry Zack, “The ‘S’ in marketing,” CEP Magazine, July 2023, https://compliancecosmos.org/s-marketing.
2 Advertising Standards Authority, “Advertising Guidance - misleading environmental claims and social responsibility,” guidance, June 23, 2023, https://www.asa.org.uk/resource/advertising-guidance-misleading-environmental-claims-and-social-responsibility.html.
3 Advertising Standards Authority, Consumer Understanding of Green Disposal Claims in Ads, Qualitative Research Report, November 2023, https://www.asa.org.uk/static/f933c452-fbc9-46fd-9fbf049e9383aa43/ASA-research-on-Green-Disposal-Claims.pdf.
4 Advertising Standards Authority, “Rulings,” accessed January 4, 2023, https://www.asa.org.uk/codes-and-rulings/rulings.html.
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