Green claims update: October 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 misleading Mazda ad

The ASA has ruled that a paid-for social media ad that promoted Mazda's electric-hybrid vehicles as "exciting, efficient and sustainable" was misleading and breached the CAP Code. According to the ASA, the term "sustainable" gave a misleading impression about the vehicle's environmental impact and had not been sufficiently substantiated. As a hybrid model, emissions were generated when the petrol engine was used, and also when the vehicle was manufactured and charged. This ruling follows the ASA's guidance on advertising electric vehicles published earlier this year.

ICC updates its advertising and marketing code

The International Chamber of Commerce (ICC) has published the 11th edition of its Advertising and Marketing Communications Code. The Code sets a global standard for responsible marketing and acts as a benchmark for almost 50 self-regulatory codes across the world. The updated Code includes a new section on substantiation of claims emphasising that advertisers must be able to substantiate all express or implied green claims, including "aspirational claims or claims expressing goals or commitments related to achieving certain environmental metrics" in the future. The Code also emphasises the importance of explaining any limitations to the claim (e.g. about the amount of recycled content in a product).

Annual greenwashing report published

In its third annual greenwashing report, the ESG research provider RepRisk has found a 12% decrease in greenwashing globally across all sectors and a 20% decrease in climate-related greenwashing. This is the first decline in such figures in six years - likely due to increased regulatory scrutiny and the prevalence of "greenhushing". Other notable findings include a 30% increase in particularly egregious greenwashing cases (e.g. those that could have a large impact on consumers, or where there is intent to mislead) and also that 30% of companies found to be greenwashing in 2023 were then "repeat offenders" in 2024.

Sector-specific updates

Transport

• In one of the first greenwashing decisions against a cruise operator, the Dutch Advertising Code Committee has ruled that MSC Cruises' green claims, including its "net zero by 2050" target and "#Savethesea" slogan were misleading. The advertising board was particularly concerned about MSC's claim that the Liquefied Natural Gas used by its ships was "one of the cleanest" fuels without properly considering its broader environmental impact. The complaint was made by Fossil Free Netherlands, the group that won a civil case against KLM earlier this year.
  
  
• The environmental advocacy group, Climate Integrity, has submitted a complaint to the Australian Competition and Consumer Commission accusing Quantas of greenwashing. The complaint focuses on Quantas' advertising of its 'fly carbon neutral' product which enables consumers to offset the emissions of their flights, and also claims promoting its use of 'sustainable aviation fuels'.  The ACCC has been now been asked to investigate.

Energy

• Drax, the owner of the UK's largest power station, has been fined £25 million by Ofgem after an investigation showed that Drax had misreported its carbon emissions. Drax had claimed its practice of using wood pellets rather than coal to fuel the power station produced up to 80% less CO2, however Ofgem found an "absence of adequate data governance and controls" had led to inaccurate reporting of data.
  
  
• In one of the first greenwashing claims in the country, the South African Advertising Regulatory Board (ARB) has upheld a complaint against TotalEnergies relating to claims that its partnership with SANParks (South African National Parks) demonstrated its commitment to "sustainable development". The ARB held the claim "committed to sustainable development" was misleading and breached the advertising code because TotalEnergies' core business relied on the ongoing exploitation of fossil fuel which was directly opposed to sustainable development and there was no evidence of a link between its support of SANParks and sustainable development.

Publications

• ASA rules on impact of historic environmental performance on green claims
• ASA continues to scrutinise aviation green claims
• Heating and insulation green claims under CMA review
• Retail Compass - ESG and the reputational microscope: how do you deliver beyond compliance, reporting and risk mitigation?