Greenwashing: Limitations on The Promotion of Carbon Neutrality Initiatives 

By Pierre Frühling, Alix d’Arjuzon and Enzo Pannozzo, HFW Paris/Brussels

This article was originally published in Issue II of the Green Mobility Magazine.

In recent years, the significant growth of environmental regulatory constraints on the transport industry has encouraged companies within the industry to invest heavily in greener transport and carbon offset schemes, with the aim of reaching carbon neutrality.

To benefit from these costly investments, companies advertise their carbon neutrality strategies to the public. However, while companies promote their green environmental impact, NGOs are campaigning against “greenwashing”, and this has become a ground for reform within the European Union. 

It is, therefore, important to be aware of the regulations applicable to green promotional actions. 

What is greenwashing?

Greenwashing is the practice of marketing misleading or false information about the environmental impact of a company’s service, products or actions.  

At this time, there is no formal definition of greenwashing enforced at a European Union or international level. As such, it is necessary to look for guidance as to how it is defined at a national level, as some countries have started to regulate greenwashing more precisely. 

France, for instance, has recently adopted “Climate and Resilience” legislation which addresses greenwashing within the commercial world. Any advertisement based on false or misleading claims or descriptions of (i) the environmental impact of a product or service, or (ii) the advertiser’s commitments with regards to the environment is specifically penalised [1]. 

The notion of “advertisement” may be understood broadly to cover advertising via correspondence, print, billboard, the press, the cinema, television, or radio, as well as advertising in online communications and product packaging [2].

Practices amounting to greenwashing.

In the transport sector, NGOs have declared several practices to be greenwashing, including [3]:

  • Exaggerating a company’s green image by amplifying its green investments;
  • Minimising an airline’s negative environmental impact by claiming to be “Europe’s lowest emissions airline”;
  • Promoting climate friendly initiatives, such as sponsoring COP25 to appear “green“;
  • Promoting false solutions, such as the possibility for customers to fully compensate for their carbon footprint by paying extra fees; and
  • Environmental claims relating to future environmental performance which do not set out clear commitments.

In France, the Climate and Resilience Act prohibits an advertiser from using any wording equivalent to carbon neutrality, unless certain transparency conditions are met [4]. Should an advertiser claim that a product or a service is “carbon neutral, “zero carbon“, “with a zero-carbon footprint“, “climate neutral“, “fully offset“, or “100% offset“, it must publish a summary report on its website. The report must disclose the carbon footprint of the product or service advertised, and the process by which the greenhouse gas emissions related to these products and services are first avoided, then reduced, and, finally, offset. 

The European Commission’s proposed Directive on green claims, scheduled for March 2023, could see such requirements implemented across the European Union. 

The EU initiative

The European Union is currently working on the following proposals in order to provide comprehensive regulations on greenwashing and setting requirements for green claims:

  • A proposal, issued on 30 March 2022 by the European Commission, for a Directive [5] to amend Directives 2005/29/EC and 2011/83/EU with regards to equipping consumers for the green transition through better protection against unfair practices and better information. This Directive intends to tackle misleading green environmental claims (defined as greenwashing) and ban certain practices such as:
  • Generic environmental claims used in marketing towards consumers, where the excellent environmental performance of the product or trader cannot be demonstrated;
  • Environmental claims about the entire product, when it actually concerns only a certain aspect of the product;
  • A proposal for a Directive on green claims, not yet issued by the European Commission, which aims to: 
  • Define green claims as “any message or representation, including text, pictorial, graphic or symbolic representation (e.g., labels, brand names, company names or product names), which states or implies that a product or trader has a positive or no impact on the environment or is less damaging to the environment than other products or traders, respectively, or has improved their impact over time”; and 
  • Set requirements for using green claims, such as substantiation based on EU approved methodology.

Both of these proposals are likely to be put forward in 2023 and, should these Directives come into force, each EU Member State will need to adopt and publish the laws, regulations and administrative provisions necessary to comply with this new framework.

However, the implementation of these potential EU Directives could still lead to certain discrepancies between Member States regarding the scope of greenwashing and the requirements for green claims.

How is greenwashing penalised

Disciplinary and administrative Action:

Most of the time, greenwashing is subject to disciplinary and administrative action amounting to the withdrawal of the disputed advertisement.

In addition to the withdrawal, some authorities (including competition authorities, advertising control authorities and market authorities) may issue fines, warnings, reprimands, or even a temporary or permanent ban on doing business.

However, as the legal arsenal against greenwashing practices increases, administrative action tends to be supplemented by the threat of criminal sanctions. 

Criminal Sanctions

Companies and their managers may also be held criminally liable for greenwashing under the Consumer Code in France [6], the Consumer Protection Act in the United Kingdom [7] and the Federal Trade Commission Act [8] in the US. For instance, French Criminal Courts found an advertisement for hybrid vehicles using super ethanol to be a misleading commercial practice, because the advertisement referred to the terms “more ecological” despite there being no scientific basis for this assumption [9].  

With the new provisions introduced by the “Climate and Resilience” Act [10], France has strengthened the penalties faced by companies found to have demonstrated misleading commercial practices amounting to greenwashing. Article L.132-2 of the French Consumer Code now provides that the penalty for such an infringement could be up to two years’ imprisonment and a fine amounting to 300,000 Euros, which can be increased by up to 80% of the expenses incurred in carrying out the advertising or practice constituting the greenwashing.

The current draft of the proposed Directive, issued on 30 March 2022, amending Directives 2005/29/EC and 2011/83/EU, provides that greenwashing should be classified in the blacklist of the misleading practices and, therefore, should be considered unfair in all circumstances and in every Member State.

Conclusion

The strengthening of anti-greenwashing regulations renders advertising in the transport sector rather challenging.

First, companies should be careful not to overstate their carbon neutrality strategy and impact, otherwise it could be regarded as greenwashing and thus subject to criminal action.

Secondly, advertisers should consider the significance of environmental protection in the overall tone and emphasis of advertising campaigns. According to the rules of ethics in advertisement, advertising should not promote any behaviour that is considered excessive and contrary to environmental protection. In a recent French case of May 2022 [11] the advertisement of an airline with the following catchphrase “never spend your weekends in the same place” was deemed unethical and contrary to environmental protection. The jury concluded that the aim of such an advertisement was to invite the passenger to fly to a different European city every weekend and, as such, this encouraged excessive travelling which ran counter to the principles of environmental protection. 

Companies in the transport sector should therefore take great care in deciding what environmental terms are to be used in their advertisements if they hope to avoid penalties.

By Pierre Frühling, Alix d’Arjuzon and Enzo Pannozzo, HFW Paris/Brussels

This article was originally published in Issue II of the Green Mobility Magazine.

References

[1]
Climate and Resilience Act, n° 2021-1104 which entered into force on 24 August 2021 in France.
[2]
” Art. 12 of “Climate and Resilience” Act – Decree No. 2022-539 of 13 April 2022 on carbon offsetting and carbon neutrality claims in advertisement – Article D. 229-106 of the French Environmental Code; These regulations entered into force in France on 1s.
[3]
Greenpeace International, “New Greenpeace report finds Europe’s biggest airlines failing over climate claims,” 1 June 2022. [Online]. Available: https://www.greenpeace.org/international/press-release/54034/new-greenpeace-report-finds-europes-biggest-airlines-failing-over-climate-claims/.
[4]
Art. 12 of France’s new “Climate and Resilience” Act – Art. L. 229-68.-I of the French Environmental Code – Decree No. 2022-539 of 13 April 2022 on carbon offsetting and carbon neutrality claims in advertisement.
[5]
Brussels, 30.3.2022 COM(2022) 143 final – Proposal for a directive amending Directives 2005/29/EC and 2011/83/EU as regards empowering consumers for the green transition through better protection against unfair practices and better information.
[6]
Articles L121-2 and following of the French Consumer Code.
[7]
Consumer Protection from Unfair Trading Regulations 2008 (CPRs) and Business Protection from Misleading Marketing Regulations 2008 (BPRs) – Green Claims Code of the UK Competition and Markets Authority.
[8]
Section 5 of the Federal Trade Commission Act, 15 U.S.C. 45(a) (“Section 5”) – Guides for Use of Environmental Marketing Claims, 16 CFR part 260.
[9]
Paris Court of Appeal, 3 October 2013, n° 2010/08580; French Court of Cassation, 21 October 2014 n°13-86.881.
[10]
Article 11 of French “Climate and Resilience” Act – Article L.132-2 of the French Consumer Code.[11]
France’s Advertising Standards Jury 827/22 – 4 May 2022.

LinkedIn
Twitter
WhatsApp
Facebook
Email
Print