Environmental regulation is currently undergoing significant change, as the EU Commission issued a directive proposal on March 22, 2023, concerning green claims. According to the proposal, certain green claims should be pre-checked before they can be used in marketing.
According to the proposal, “businesses would incur administrative costs from having to submit a request for a certificate of conformity to a ‘verifier’ before presenting environmental claims.”
The topic is timely and important, as environmental values are a significant factor for consumers in making purchasing decisions. In Finland, the Consumer Ombudsman has addressed this theme in several decisions.
This blog post examines the evaluation of green claims and the influencing factors.
The legal review of green claims is currently based on the EU Marketing Directive adopted in 2005 and nationally implemented in the Consumer Protection Act. Additionally, the evaluation is based on the ICC's marketing rules, as well as legal praxis and authority decisions and guidelines.
The concept of an environmental claim is based on guidance from the European Commission on the interpretation and application of the marketing directive. An ‘environmental claim’ refers (in commercial communications, marketing, or advertising) to a procedure that creates an impression or otherwise suggests that a product or service has either 1) a positive environmental impact, 2) no environmental impact, or 3) is less harmful to the environment than competing goods or services.
This distinction can be achieved by the product's composition, manufacturing method, or the way of disposing of the product, or by lower energy consumption or less environmental pollution resulting from using the product. When environmental claims are not truthful or their truthfulness cannot be verified, the activity is considered ‘greenwashing’.
The crucial factor is the impression created in the average consumer's mind.
In Finland, the Consumer Ombudsman has evaluated the use of environmental claims in decisions on Arla Oy, Atria Oyj, Vattenfall Oy, and Fortum Oyj, as well as Marimekko Oyj and Stockmann Oyj Abp, among others.
In assessing misleadingness, the understandability of the meanings of environmental terms for the average consumer, as well as the location and quality of information clarifying the environmental claims were crucial.
Decision on Arla Oy
In the marketing of Arla's new KESO cottage cheese container, the claim was made that "the climate impact of this cardboard container is 60% lower than that of the previous plastic container". Below the claim was the text "read more: arla.fi/pakkaukset".
The Consumer Ombudsman considered the term ‘climate impact’ misleading. The term is not established and can be understood in many ways. Arla's evidence was based on too narrow a definition of ‘climate impact’. Since the claim was unspecified, information on its more detailed content was necessary for the consumer to understand the term.
The additional information supporting the claim was several clicks away from the claim itself. Therefore, the use of the term was misleading, because the information was located "on a separate website quite a long way from the claim". In the solution, it remained ambiguous whether having the information ‘one click away’ from the claim would have been sufficient.
Decision on Atria Oyj
In Atria's marketing, the following claim was used in a printed advertisement: "30% SMALLER CARBON FOOTPRINT". Next to the claim was a picture of a new minced meat packaging, with the following text in the lower front corner: “TOWARDS A CARBON-NEUTRAL FUTURE. The carbon footprint of this packaging is 30% SMALLER than that of a packaging tray."
The claim was a factual statement, and Atria had to provide evidence of its truthfulness. In support of its claims, Atria presented a properly conducted life cycle analysis verified by a third party.
Regarding the term ‘carbon footprint’, the Consumer Ombudsman considered that carbon footprint can, in practice, be calculated in many different ways, and the meaning of ‘carbon footprint’ may not be entirely unambiguous to average consumers. However, the Consumer Ombudsman deemed this term clear enough, as the calculation of the packaging's greenhouse gases was based on carbon dioxide equivalents representing all greenhouse gases, which is typically referred to by the term ‘carbon footprint’. This was also the broadest definition of the term.
Consequently, the Consumer Ombudsman found these environmental claims to be truthful and sufficiently precise. Therefore, it was not necessary to assess additional information or its location.
Decisions on Vattenfall Oy and Fortum Oyj
In an advertisement of Fortum, expressions like "towards a cleaner world" and "clean energy and recycling" were evaluated. The ad was misleading and violated Chapter 2 Section 6 of the Consumer Protection Act, because it created a hopeful, future-oriented impression for the consumer that by choosing Fortum the consumer could have a positive impact on the environment. However, no concrete evidence was provided to support this claim.
In an advertisement of Vattenfall, in turn, the claim "fossil-free life within one generation" was evaluated. Vattenfall's claim was also misleading, because the factual claim could not be proven true at the time of marketing, and no evidence was presented in the ad about concrete facts on which the overall impression of the company's environmental friendliness was based.
In this case, too, the consumer got an impression that Vattenfall's operations have particularly positive environmental impacts.
The Consumer Ombudsman considered that the advertisement violated both Sections 6 and 7 of Chapter 2 of the Consumer Protection Act. The Consumer Ombudsman found that "unspecified and general responsibility statements" on the company's website alone were not sufficient to substantiate the factual claim used in Vattenfall's advertising. Additionally, the location of the supporting information was assessed in such a way that it is not sufficient if the additional information is located "several clicks away from the claim itself".
Midsona
in the case of Midsona, the Swedish Patent and Market Court evaluated that when vague terms like ‘ecological’ or ‘organic’ are used in marketing, the entrepreneur must explain to the consumer what these terms mean, and provide necessary evidence to support the terms. The court found that the environmental claims were too vague and required clarifying information so that they could be used in marketing. According to the court, it was not certain that the information clarifying the environmental claims would be read together with the claims if the information was located on a website behind a link. In such cases, the information is not in the ‘immediate vicinity’ (‘omedelbar närhet’) of the marketing claim as required in Article D1 of the ICC.
Latest decisions by the Consumer Ombudsman on Marimekko Oyj and Stockmann Oyj Abp
The Consumer Ombudsman has evaluated the location of additional information supporting environmental claims in the latest decisions on November 10, 2023, and December 1, 2023. In both decisions, the term ‘responsible’ or ‘more responsible’ used in environmental marketing was evaluated.
According to the Consumer Ombudsman, this is a vague and ambiguous term with no precise definition. The consumer cannot know whether the term refers to social, economic, or environmental responsibility and which are the aspects in light of which the product's responsibility is assessed. For the term to be used in marketing, the product should be more responsible in all aspects compared to competing products. Therefore, in the context of the term, it must be immediately and precisely clarified what the term concretely means, to avoid misleadingness.
With regard to additional information supplementing an environmental claim, the Consumer Ombudsman declared that in the case of claims of general nature which refer to sustainability of a product, the additional information “shall be in immediate context of the claim” so that the consumer cannot inadvertently bypass it. Moreover, the consumer cannot be expected to search for the information. In this case, it was not sufficient that “the claim was only elaborated at the end of the product-specific page and in a separate page under the title More sustainable choices”.
This policy is stricter than earlier decisions by the Consumer Ombudsman.
It seems that the additional information should be located in the same place as the environmental claim used, in accordance with the policy in Sweden.
Legal rules derived from recent decisions by the authorities
According to instructions by the Consumer Ombudsman, environmental claims should be as unambiguous as possible and, if necessary, specified to relate to e.g. the package only. Ambiguous environmental claims are not recommended to be used at all. However, environmental claims of general nature can be used if they are supported by substantial information according to Chapter 2, Section 7 of the Consumer Protection Act, to avoid misleadingness. If the claim can be considered too general in nature, the additional information shall be located “in connection” with the environmental claim, according to the ICC marketing code.
In the light of recent decisions, it seems that this refers to the information being located physically in the same place and in immediate context of the claim. Based on recent decisions by the authorities, it seems that factors affecting the rigorousness of the assessment include the medium of communication used, as well as the nature of marketing, i.e. whether the marketing relates to a single consumer product (more rigorous assessment) or is image marketing of a more general nature.
Environmental safety and sustainable development are issues of prime importance. Responsible marketing planning enables communication of a company’s sustainability choices to consumers within a legal framework. At Berggren, we are pleased to help you with issues relating to environmental marketing.
The blog was written in collaboration with Katariina Kokkonen, Legal Trainee.
