Green claims update: December 2024
Welcome to our round-up of the key legal and regulatory developments relating to green claims. If you have any questions about this, or about wider ESG and sustainability regulatory developments, please get in touch.
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Key updates
ASA ruling against Wizz Air
The ASA has ruled that Wizz Air's claim to be "one of the greenest choices in air travel" was misleading. According to the regulator, consumers would likely interpret the claim as meaning that Wizz Air had one of the lowest environmental impacts of all airlines operating flights to and from the UK. Although Wizz Air had based the claim on the type of aircraft used and the carbon emissions per passenger (which it said had been independently verified as the lowest in the market) the basis of the comparison was not made clear in the ad, which was a breach of the CAP Code. The ruling is part of the ASA's broader enforcement action on green claims in the airline industry (see our July and September updates for examples).
CMA concludes investigation into Unilever
The CMA has closed its 11-month investigation into Unilever ads, citing changes that Unilever has made to claims on its products and the wider impact of the CMA's programme of work on tackling misleading green claims which, it said, had yielded positive changes in the FMCG sector. The CMA did not specifically comment on Unilever's compliance with consumer law or the changes made to its green claims.
ASA guidance on regenerative agriculture methods
The ASA has published guidance on how regenerative agriculture initiatives can be communicated to the public with confidence. It emphasises that, given the lack of consumer awareness and understanding in this area, the basis for the claims must be clear in the ad (e.g. what farming tools, protocols or practices underly the claim) and any terminology and statistics must be clearly explained. Advertisers are also advised to avoid tokenism, absolute claims, misleading comparisons and exaggerating benefits.
Research finds average of three green claims per product
Research by the British Retail Consortium (BRC) and Provenance into 390,000 green claims made by seven major UK online supermarket retailers has found an average of 2.9 green claims made per product. On top of this, 1 in 7 claims were found to have a 'high risk' of misleading consumers, with the most common high risk claims being "sustainable", "responsibly/sustainably sourced", "100% natural", and "100% recyclable".
Sector-specific updates
Energy
The energy company Santos has been sued by one of its shareholders, the Australasian Centre for Corporate Responsibility (ACCR), for allegedly misleading statements it made about its net zero emissions plan. The ACCR claims that Santos had no proper basis for stating in its annual report that it had a clear pathway to reach net zero by 2040, and that its claims that its natural gas was a "clean fuel" providing "clean energy" were misleading as they failed to disclose that greenhouse gas emissions linked to the extraction, processing and use of natural gas. The case is expected to conclude at the end of this year.
Finance
ClientEarth has submitted a complaint against BlackRock to the French financial regulator (AMF) in relation to 18 actively managed retail investment funds labelled as "sustainable". The campaign group contends that the funds are labelled incorrectly and are at risk of greenwashing, because they collectively hold over US$1 billion of investment in fossil fuel companies. The AMF has also stated its intention to notify the European financial regulator (ESMA).
Publications
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