The Advertising Standards Authority (ASA) and the Committee of Advertising Practice (CAP) have updated their guidance for advertisers to mitigate confusion over sustainability claims, requiring improved evidence to support their green claims. Failure to do so could risk censure and reputational damage.
- The ASA and CAP have updated their guidance on the use of carbon neutral and net zero claims in advertising.
- While consumer protection laws are intended to support buyers, they also create a level playing field for competitors by ensuring that products are genuine and backed by legitimate claims.
- Businesses are required to become more responsible in their claims and improve their communications, both in advertising and with stakeholders.
In October of 2022, the ASA published research on the consumer understanding of environmental claims, driven by two areas of potential confusion for consumers: understanding the terms carbon neutral and net zero, and verifying claims from hybrid and electric vehicle makers.
While many believe that carbon neutral means an absolute reduction in carbon emissions would take place, there was no understanding of what net zero meant, or how offsetting impacted sustainability targets and claims.
Advertising from the air travel, energy and automotive sectors garnered the most attention, with ASA’s research suggesting that the need for transparency is potentially greater in those sectors, resulting in calls for the use of such claims to be policed by a government body.
What does the updated guidance from the ASA recommend?
The new guidance from the CAP (and BCAP, or Broadcast Committee on Advertising Practice) builds on the main principles of the guidance provided by the Competition Market Authority (CMA). Given the confusion around the exact meaning of carbon neutral and net zero, CAP and BCAP advised advertisers to follow the new guidance to reduce the potential for false and misleading claims.
The main thrust of the new guidance is that claims should be substantiated and supported using accurate and qualified information. Explaining the basis of net zero or carbon neutral claims, for example, could enhance consumer understanding of the matter.
A verifiable strategy must back up future claims of achieving carbon neutrality or reaching net zero. If these future claims include the use of offsets, advertisers were told to provide details of the offsetting scheme being used, in addition to adhering to the general guidance on making qualified and accurate claims.
Also, the qualifying information that substantiates the authenticity of a claim should be easily understandable by consumers, and should be closely related to the key aspects of the sustainability claim being made.
As the demand for sustainable products and services continues to rise, so will the number of products and services that claim to fill that need. While consumer protection laws are intended to support buyers of goods and services, they can also help create a level playing field for competitors by ensuring that products are genuine and backed by legitimate claims.
How is the CMA involved in overseeing advertising?
The CMA is the competition regulator in the UK that has oversight over business competition and consumer protection. In its role, it looked at ways in which consumer protection legislation can be used to protect consumers from false or misleading environmental claims.
In the interest of fairness to consumers and businesses, the CMA investigation included claims about sustainable products and services and whether they were supported by sound, qualified and accurate evidence. To determine whether a claim is misleading, especially when information about the sustainability claims is lacking or missing, the CMA examined how the claims affect consumer buying behaviour, and whether the lack of supporting evidence led to disappointment or loss.
Part of the CMA’s commitment in its annual plan is to support the UK’s transition to a low-carbon economy. It prioritised cases to ensure that misleading business practices, enabled by false or unclear advertising, do not affect consumers’ behaviour.
What are the next steps?
The ASA will monitor advertising for up to six months after the publication of its update in February 2023 to assess its impact. Part of this assessment will include determining how these claims are being substantiated.
Upon encountering questionable or low-quality evidence, the ASA will ask CAP to launch a review to work with advertisers and instruct them on acceptable forms of supporting information to back up their sustainability claims. Such a review could involve using expert opinions or consultations, and will incorporate any developments in environmental policy in the UK.
Claims that are completely unqualified will not be subject to monitoring or review, and will be viewed by ASA as in breach of existing advertising communication rules. It said it will be taking “proactive action” to address such claims.
As long as definitions of sustainability terms remain unclear, sustainability claims will continue to invite scrutiny. This will require businesses to become more responsible in their claims and improve their communications, both in advertising and to stakeholders, especially when claims do not meet regulatory best practice guidance.