The ASA conveyed a sense of urgency, as it believes influencing consumer behaviour will be an important part of meeting UK net zero targets.

On 23 June 2023, the UK’s Advertising Standards Authority (ASA) published an update to its advertising guidance on misleading environmental claims and social responsibility (the Advertising Guidance) and stated its intention to continue to take a firm, but proportionate, approach against greenwashing claims. This latest update to the Advertising Guidance aims to identify factors that make environmental claims in ads more likely or less likely to comply with the UK Code of Non-broadcast Advertising (CAP) and UK Code of Broadcast Advertising (BCAP).

This blog post provides context for the latest update and summarises the new section of the Advertising Guidance that draws on principles established by recent ASA rulings as well as principles found in the Competition and Markets Authority’s (CMA’s) Green Claims Code.

Background

In December 2021, the ASA published its initial Advertising Guidance, which covered rules under the CAP Code and the BCAP Code that concern environment-related advertising issues.[1] The ASA updated the document in February 2023 to address issues stemming from low understanding and lack of consensus around the meaning of “carbon neutral” and “net zero” claims.[2] Businesses were advised to avoid using unqualified terms and to be diligent about providing verifiable strategies and detailed bases for their statements, such as information about offsetting schemes.

The last couple of months saw a number of important ASA rulings in sectors identified as high priority by the UK Climate Change Committee (including finance, aviation, and oil and gas) where the ASA found breaches of the CAP and/or BCAP Codes on the grounds that the various ads were exaggerating the business’s overall environmental credentials compared to their overall environmental impact. The ASA believes that this exposed the need to provide businesses with further practical guidance, illustrated by real case scenarios.

Latest Updated Guidance

The latest updated Advertising Guidance contains a new section that draws on principles established by recent ASA rulings, as well as principles found in the CMA’s Green Claims Code,[3] thus reinforcing the close collaboration between the two bodies. The Advertising Guidance aims to identify factors that make environmental claims in ads more likely or less likely to comply with the CAP and BCAP Codes. Below is a summary of the key advice:

1. Marketers must consider consumers’ likely interpretation of a claim, bearing in mind how knowledgeable the audience is likely to be.
2. Ads must make clear if any advertised environmental benefit will only result from specific consumer action or behavioural change.
3. If an advertiser references its compliance with a particular standard, the ad should provide consumers with sufficient information to understand the meaning of that standard.
4. Claims that a product can be recycled must be substantiated and must make clear any limitations to this.
5. Claims which relate narrowly to specific products should make this scope clear, to ensure that they are not understood as being representative of the entire business.
6. Marketers should include balancing information about the business’s significant ongoing contribution to emissions or other environmental harm — particularly in sectors in which consumers are less likely to be aware of the business’s overall contribution to emissions or other environmental harm.
7. Businesses should be careful about using imagery of the natural world, which may, depending on the context, contribute to the impression that the business is making a significant contribution towards reducing greenhouse gas emissions.
8. Absolute claims (such as “sustainable” or “environmentally friendly”) must be supported by a high level of substantiation.
9. Ads which present a business’s negative environmental impact as being in the past are likely to mislead if the business is still creating a significant negative impact.
10. Ads which focus on specific initiatives as a way of achieving net zero should clearly contextualise those claims with information about the role that the initiative would play in that net zero plan, and how and when net zero emissions will be achieved. When making such claims, the timeframe to achieve a net zero goal is likely to be considered material information and should be stated in the ad.

The Advertising Guidance acknowledges the importance of advertising in facilitating the transition to more sustainable consumer behaviour and business practice but at the same time expressly states that the ASA will apply a stricter interpretation under the CAP and BCAP Codes if evidence exists of misleading or socially irresponsible advertising that concerns the environment.

High Stakes

In the press release published alongside the Advertising Guidance, the ASA emphasised the ambitious programmes of work it has in place, which aim to tighten compliance with the CAP and BCAP Codes, as well as the CMA’s Green Claims Code. The ASA also conveyed a sense of urgency, as it believes that influencing consumer behaviour in key high-carbon-emitting sectors will be important for meeting the legally binding net zero targets in the UK.[4]

The ASA is aware that business unease around the risk of engaging in greenwashing has been growing in recent months. It criticised the concept of “greenhushing”[5] and instead cited accuracy and transparency of communications as a way forward — most importantly, the ASA insisted that businesses must be realistic and honest with themselves and their customers about where they are on their sustainability journey. According to the ASA, there is a limited window of opportunity to demonstrate that responsible advertising is part of the solution for reaching net zero targets. Otherwise, statutory interventions in advertising may follow, as is already being seen in other European jurisdictions and is being proposed by the EU.[6]

Parallel developments can also be observed across the pond, where the US Federal Trade Commission (FTC) has initiated a review of its 2012 Green Guides and will likely have to address environmental marketing claims including provisions on climate change, sustainability, recycling, “carbon neutral”, “net zero”, “environmentally preferable”, “eco-friendly”, and “free” of hazardous chemicals claims.[7]

Latham & Watkins will continue to monitor developments in this area.

Endnotes

[1] https://www.asa.org.uk/news/new-advertising-guidance-on-misleading-environmental-claims-and-social-responsibility.html.

[2] https://www.asa.org.uk/news/updated-environment-guidance-carbon-neutral-and-net-zero-claims-in-advertising.html.

[3] https://www.gov.uk/government/publications/green-claims-code-making-environmental-claims/environmental-claims-on-goods-and-services.

[4] https://www.asa.org.uk/news/greenspeaking-with-confidence.html.

[5] The practice of going silent on sustainability efforts to avoid any possible backlash.

[6] For more information see this Latham Client Alert: https://www.lw.com/admin/upload/SiteAttachments/Focus-on-Greenwashing-The-Latest-Regulatory-Proposals-in-the-EU-and-the-UK.pdf .

[7] For more information see this Latham Client Alert: https://www.lw.com/admin/upload/SiteAttachments/The-Future-of-Green-Marketing-Anticipated-Changes-to-the-FTCs-Green-Guides.pdf. The FTC closed its request for public comments on revisions to the Green Guides on 24 April 2023.