The latest ‘greenwashing’ updates – responsible communication of environmental, sustainability and green claims
17 April 2024 | Ed Allen, Regulatory and Scientific Affairs – Nutrition and Sustainability Lead
Sustainability is an increasingly important issue for all businesses, including those in the food and drink sector. Alongside pressure from regulators, there is driving force from the growing proportion of consumers who are looking for “environmentally responsible” or “sustainably-sourced” options as well as branding that relates to their personal values. Sustainability programmes are a must for food business operators, and often have synergies with efficiency and profitability goals.
But how can you communicate and benefit from the progress that you make regarding your sustainability credentials?
Making environmental claims about your business and product portfolio can help you to receive recognition of your achievements, gain an advantage over your competitors, and assist consumers in making informed choices about what they buy. Proceed with caution, however, as poorly founded or misleading claims can lead to a lack of consumer trust and even enforcement action.
To support you in the responsible communication of environmental / green claims in the EU, UK and other English-speaking markets, this blog outlines the latest developments in the environmental claims regulatory landscape, the legislation and guidance relevant in different regions, the challenges they present and how to navigate them.
EU Greenwashing Directive and Green Claims Directive
The EU Greenwashing Directive aims to ban greenwashing and to improve consumer trust, communication of environmental claims, and the robustness of data used to back them up. As such, the use of words like “eco”, “environmentally friendly”, “natural”, and “biodegradable” (and any other similar sustainability claims) will now require hard evidence, namely farm to fork lifecycle assessment data on the related product(s), which complies with ISO 14024 or the EU Ecolabel Standard.
These terms are considered to be ‘generic environmental claims’ and will be banned alongside other misleading marketing relating to greenwashing, including any claims relating to climate neutrality which are linked to emissions offsetting schemes. The use of any generic environmental claim will need to be based on approved certification schemes or established by public authorities.
The EU Greenwashing Directive is meant to work together with the Green Claims Directive (Substantiation and communication of explicit environmental claims), which will provide more detail on conditions of use for both generic and specific/explicit environmental claims. It’s also thought to limit the proliferation of environmental labelling schemes or brand created environmental logos, by requiring an EU member state to sponsor the labelling scheme or logo before it’s brought to market.
The potential influence of this EU Directive on the UK stance on greenwashing remains to be seen. What is clear, however, is that UK manufacturers will need to comply for goods produced and/or sold in Northern Ireland.
UK CMA Green Claims Code
Guidance from the UK Competition and Markets Authority (CMA) was published back in 2021 to help businesses understand and comply with their existing obligations under consumer protection law when making environmental claims. This includes a Green Claims Checklist as well as key principles upon which the more detailed guidance is based.
These principles are:
- Claims must be truthful and accurate;
- Claims must be clear and unambiguous;
- Claims must not omit or hide important relevant information;
- Comparisons must be fair and meaningful;
- Claims must consider the full life cycle of the product or service;
- Claims must be substantiated.
A set of investigations was also launched by the CMA into how products and services claiming to be 'eco-friendly' are being marketed, and whether consumers could be being misled. Outcomes of investigations are now starting to be published, including for the FMCG sector, ASOS, Boohoo and Asda, with the food sector set to be investigated in due course. If the CMA uncovers evidence suggesting unfounded green claims, it will consider taking enforcement action – for example, opening an investigation into specific companies.
North America
In the US, the Federal Trade Commission (FTC) announced in December 2022 that it was seeking public comments on potential updates and changes to their ‘Green Guides’ for the use of environmental claims. The Green Guides were first issued in 1992 and most recently revised in 2012. The guides include general principles for using environmental marketing claims, and guidance on terms considered misleading to consumers.
After an extension, the public comment period on the latest proposed updates ran until April 2023 and publication is expected in 2024, following the publication the SEC’s Climate Disclosure Guidance for US businesses. The outcome updates to the FTC Green Guides are likely to include tighter guidance around the use and substantiation of ‘green’/ sustainability / environmental claims.
Other changes in the US regulatory landscape include the Securities and Exchange Commission’s adoption of rules to enhance and standardise businesses’ climate disclosures, which suggests a heightened focus on greater transparency of sustainability commitments and achievements for investors and consumers across the US market.
In Canada, environmental claims are governed under the Competition Act for food products, where any company making false or misleading claims to promote a service, product or business interest are prohibited on the market. In general, the Canadian Competition Bureau monitor environmental claims across the market and has been known to investigate companies.
A proposed amendment to the Competition Act under Bill C-56 achieved Royal assent on 15th December 2023 and could potentially be used to enforce environmental claims more rigorously, depending on the final text.
Australia
The Australian Competition & Consumer Commission (ACCC) are Australia’s national competition, consumer, fair trading and product safety regulator, and are responsible for overseeing ‘green’ marketing claims to consumers. In response to the emerging green claim trend, they published green claims guidance in December 2023, to help companies ensure they are making truthful and accurate claims.
The guidance contains principles for trustworthy environmental claims – these principles are:
- Make accurate and truthful claims;
- Have evidence to back up your claims;
- Do not hide or omit important information;
- Explain any conditions or qualifications on your claims;
- Avoid broad and unqualified claims;
- Use clear and easy to understand language;
- Visual elements should not give the wrong impression;
- Be direct and open about your environmental sustainability transition.
Green claims can come in all forms and one that most companies will use is noted by the ACCC as the mobius loop on packaging. This symbol is widely used across food and beverage products to indicate that the packaging is recyclable, but without explanation it could easily cause consumer confusion – they will be left guessing whether the packaging is recyclable or made with recycled materials, potentially leading to incorrect disposal.
Responsible communication of environmental claims
When so many food and drink business operators are making great strides in improving the sustainability of their operations and products, it would be a missed opportunity not to receive recognition for this. Not least because communicating achievements will encourage progress across the sector and enable manufactures to share achievements with business customers, while also helping consumers make informed choices about the products they buy.
The real challenge is to ensure that environmental claims and communications are not misleading, and that they are instead clear, helpful to consumers, substantiated with evidence, and compliant with the relevant legislation and guidance applicable in your market
To successfully address the challenge and communicate claims responsibly and effectively, you need:
- An understanding of the applicable legislation and guidance for your market;
- Knowledge of how to interpret this with respect to your particular product and claim;
- Robust data to support your claim;
- Approval / certification for the claim (where applicable), and;
- To ensure that the ways the claim is communicated (on pack, in adverts, etc) are all compliant to relevant legislation and guidance.
How we can help
Whether you’re unsure if you can make a specific green claim on pack, what the testing standards are for compostable packaging materials, or the due diligence requirements needed from your suppliers to support these claims, our experienced team of regulatory experts can help you stay on top of the dynamic regulatory landscape surrounding sustainability.
As well as reviewing any on pack environmental claims, nutrition claims or health claims, we can also provide a full artwork and label review to help you identify areas of non-compliance or mandatory and voluntary indications.
Across market entry support, label review, product review and training, we offer a valuable, extensive and authoritative information and advisory service to help clients stay compliant with food regulations in more than 80 countries.
How can we help you?
For support with greenwashing and environmental claims legislation for your market, contact our Regulatory Affairs Team.
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