The UK Advertising Standards Authority (ASA) has published research into consumer understanding of environmental claims. It warns that there is little understanding of net zero or carbon neutral.
- ASA warns that consumers are confused by ad terms such as carbon neutral and net zero.
- The ways in which offsetting contributes to targets is a further source of confusion.
- Companies will need to be more careful about communicating their strategies if they are to avoid accusations of greenwash.
The research was driving by the identification of two potential areas of consumer confusion by the the ASA’s Climate Change and the Environment project. The first was the understanding of “carbon neutral” and “net zero” claims in advertising, while the second was the understanding of common advertising claims for hybrid and electric vehicles.
As there is an increase in the use of terms like carbon neutral, and as consumers switch from internal combustion engines, there has been a proliferation of claims made in advertising for newer technologies, and it’s important to understand the potential for consumers to be misled.
ASA research into misleading communications around environmental terms
The October 2022 report, Climate change and the environment – consumer understanding of environmental claims, found that there was an urgent need for more transparency about offsetting and target dates in ads – consumers are very confused.
This is unsurprising given the complexity of information about sustainability and net zero actions, the plethora of standards and certications, and confusion around reporting frameworks, baselines and target dates. Even more complex than the communication process itself is interpreting the implications of the information provided.
Overall the research found that there is a wide spectrum of consumer engagement on environmental issues, influencing their understanding of, and reaction to, environmental claims.
Carbon neutral and net zero are contentious terms, and offsetting confusing
While carbon neutral and net zero were the most commonly encountered claims, there was little consensus as to their meaning. There were calls for significant reform to simplify and standardise the definitions of such terms and for claims to be policed by an official body, such as government.
Participants tended to believe that carbon neutral claims implied that an absolute reduction in carbon emissions had taken place or would take place. When the potential role of offsetting in claims was revealed, this could result in consumers feeling that they had been misled
Claims in air travel, energy and automotive advertising tended to attract more attention, and the potential role of offsetting, when revealed, could result in greater disappointment. Participant reactions suggested the need for transparency is potentially greater in those sectors
Next steps in the process
The ASA is increasingly taking a stand on consumer confusion – as evinced by its recent ruling on HSBC adverts which promoted its green credentials. The ASA ruled that failure to communicate HSBC’s role in funding fossil fuels risked mispresenting its climate position to consumers.
The ASA said that due to legal constraints it could not mandate definitions for carbon neutral or net zero, only assess claims on a case by case basis. In March 2022 however, the Competition and Markets Authority (CMA) provided the Government with environmental sustainability advice that includes a recommendation to: “Create statutory definitions of commonly used environmental terms, such as biodegradable, compostable and carbon neutral.”
The Authority said that it would be sharing its own research findings with the Government as it continues to consider the CMA’s advice.
Updated guidance on green claims
The ASA and CMA have both produced Guidance on green claims, including on how carbon neutral and net zero claims can be made by businesses.
In the light of this recent research we will be updating our Guidance before the end of 2022, ensuring consistency with the CMA’s Guidance. Such Guidance is likely to make clear that organisations making these claims must ensure that they adequately explain the basis on which they are made, even where such advertising is constrained by space or time.
Following publication of updated Guidance, it then plans to carry out a six-month monitoring period in which the ASA will assess the impact of the Guidance on carbon neutral and net zero claims in advertising – as well as gathering information to assess how such claims are being substantiated.