Is greenhushing the solution to greenwashing? UK advertising regulator says ‘no’

There has been a spate of decisions recently by the UK’s Advertising Standards Authority (ASA) in respect of misleading green claims, including rulings against three oil & gas companies (see here, here and here) and one water company (see here), where the ads in question made positive environmental claims about specific aspects of their businesses (e.g. their investments into renewable/low-carbon energy), but much of the companies’ wider business model is responsible for a significant amount of environmental harm or carbon emissions.

But these rulings are not the only precedent-setting rulings the ASA has issued recently. The ASA also called out advertising by two airlines earlier this year, ruling that they had made misleading claims about the environmental impact of flying with them. And in October last year, the ASA ruled that a prominent bank had omitted material information about their financing of businesses in carbon intensive sectors, in the first case against a financial institution in relation to environmental claims in marketing communications (see our previous blog post).

The Competition and Markets Authority (CMA) is also taking a firm approach to greenwashing, with ongoing investigations into fast fashion companies and the fast-moving consumer goods sector (see our previous blog post).

This prompted the ASA to publish a blog post last week (see Greenspeaking with confidence) explaining why “greenhushing” (i.e. the practice of downplaying your green credentials) is not the answer to “greenwashing” – adding a new buzzword “greenspeaking” to the already-crowded ESG lexicon.

The ASA understands that businesses may be nervous at the moment about making any claims about their climate, environmental or sustainability credentials in light of the ASA’s recent rulings and the CMA’s investigations. However, the regulator does not think that the answer is to simply stop talking about your credentials so as to avoid the risk of falling foul of the rules.

The ASA urges marketers to give a sufficiently balanced account of the reality of where an organisation is on its decarbonisation or sustainability journey:

“Impactful and informative green claims benefit consumers because they enable them to make more responsible choices. Businesses have a right to speak about the environmental credentials of their products, services, actions and ambitions. But in today’s world where there is so much riding on these issues, businesses must be realistic and honest with themselves and their customers about where they are on their own sustainability journey.  They need to ensure that they are communicating in a way that does not get ahead of that journey and in doing so paint a misleading or irresponsible picture. Accuracy and transparency of communications is therefore key.”

The ASA goes on to highlight key lessons from their recent decisions on getting the balance right [the added emphasis is ours]:

“There are usually simple, practical ways to construct claims in ads that won’t fall foul of the Advertising Codes.

Precision, using more limited claims and adding appropriate qualifications to claims can help. Take the recent case of Intrepid Travel who offered “Planet Friendly” holidays. We banned that claim because there is nothing planet friendly about air travel, which obviously forms an unavoidable part of many of their holiday experiences. But a more limited, qualified claim based on the otherwise well-supported sustainability changes Intrepid Travel had made might well have been acceptable.

This next piece of advice is key and topical.  If you’re in a high carbon emitting sector, adding balance when making broad aspirational claims really matters.

HSBC, Shell, Repsol, Petronas, Deutsche Lufthansa and Etihad all tripped up because they made claims about their green credentials and aspirations when at the same time the reality of their high carbon business models was out-of-kilter with the overall impression given in the ads.

On the other hand, we’ve recently seen other high carbon emitting businesses make similar claims but in ways that we think add sufficient balance to green credential messaging so that the ads don’t mislead consumers. They’ve done so through the inclusion of straightforward, prominent copy in ads that acknowledges the less-climate-positive aspects of their activities, that indicates how early in their journey they are, or that provides summary details of their future planned activities. Such copy does not have to dominate ads, but it must not be hidden away.

So, be reassured that if you’re in a business that has a high carbon footprint but are on a credible pathway to net zero or working towards other ambitious plans to shift your balance of activities, we are not going to ban your claims about those ambitions in ads so long as they tell a balanced story.

And as ever, as a last piece of advice, always put yourselves in the shoes of the consumer who probably has high interest but low knowledge and understanding of the sometimes complex issues that underpin your green claims. Many consumers don’t understand what “carbon neutral” means or how it’s achieved in practice. Many won’t understand the technical end of use conditions that make a carrier bag “compostable”. You should assume a low level of knowledge when marketing green claims and you will need to work hard to ensure your message is not misunderstood.”

However, the ASA warns that:

“Businesses have a limited window of opportunity to demonstrate that advertising is part of the solution. Otherwise, statutory interventions in advertising may follow, as we’re already seeing happen in France.”

The Committee of Advertising Practice (CAP), which works alongside the ASA, has also published an updated version of its guidance on misleading environmental claims, with a new section entitled “Claims about initiatives designed to reduce environmental impact” in section 3.1 (see press release). The updated guidance draws out the lessons from key recent ASA rulings and also draws on the key principles in the CMA’s Green Claims Code.  

The CAP/ASA guidance had already been updated in February this year on the use of “carbon neutral” and “net zero” claims - urging advertisers to avoid using unqualified carbon neutral, net zero or similar claims, ensuring they include accurate information about the use of carbon offsetting, and advising that claims based on future goals need to be based on a verifiable strategy to deliver them (see ASA press release).

KEY TAKEAWAYS

• “Greenhushing” is not the answer. Businesses are entitled to speak about their green credentials, not least because it enables consumers to make more responsible choices and can be a significant differentiator vis-à-vis competitors. But in order to do so without falling foul of the rules, businesses need to learn how to “greenspeak”.
• It is paramount to give a sufficiently balanced account of where your business is on its decarbonisation and sustainability journey, especially if you are in a high-carbon emitting sector.
• Adverts should not misleadingly exaggerate the significance of a business' lower carbon activities and adverts which focus on specific net zero initiatives should explain where the initiatives fit in the business' wider net zero plan. Also, absolute environmental claims such as "sustainable" or "environmentally friendly" need a high level of substantiation.
• Even if your green claim is factually correct, you could still fall foul of the rules by “misleading by omission”. Businesses need to be more precise and contextual.
• The less prominent any qualifying information is, and the further away it is from any main claim being made, the more likely it is the claim will mislead consumers. The copy does not have to dominate ads, but it must not be hidden away.
• Always put yourselves in the shoes of the consumer and assume a low level of knowledge when marketing green claims.
• If in doubt, go back to the basic principles in the ASA’s guidance and the CMA’s Green Claims Code.
• The ASA’s guidance includes practical examples of claims in ads that may be problematic and references to ASA rulings where complaints were upheld.
• The ASA also has a copy advice service which offers confidential, tailored, 24-hour advice on non-broadcast green claims.
• The ASA and CMA have said they will continue to take robust enforcement action against greenwashing. The UK’s FCA is also focused on greenwashing in the funds space.
• Regulators in other countries (including in the EU, US, Australia and Asia) are also shining a brighter light on greenwashing, with new regulation on the cards in some countries including a proposal for a new Green Claims Directive at the EU level.  
• The risks associated with greenwashing are not limited to enforcement action under advertising and consumer protection regimes. There are a variety of ways in which greenwashing can lead to liability, including litigation – see our “ESG Risk Pathways” graphic on this page.

Linklaters materials on greenwashing 

For more information on the ASA’s and CMA’s enforcement of greenwashing, see the following Linklaters materials:

• UK: Advertising regulators publish new guidance on misleading environmental claims
• UK: Advertising regulator finds that bank’s adverts containing climate claims are misleading in precedent-setting case
• UK CMA publishes Green Claims Code to combat ‘greenwashing’
• Airing the laundry?: CMA targets fashion retailers in the UK over alleged greenwashing claims
• Green advertising claims in the UK: CMA’s new fining powers under the Digital Markets, Competition and Consumer Bill
• Podcast series - Running the greenwashing gauntlet: exploring the litigation and regulatory risks

To stay on top of the latest developments on greenwashing and other key ESG issues, sign up to our Sustainable Futures blog (by clicking on the “Subscribe” button at the top of the page) and the Linklaters ESG newsletters (here).