There has been a growing trend in recent years of companies in various sectors marketing their goods and services as ”sustainable” and ”environmentally friendly”. While the sentiment of products being “good for the environment” may be admirable, such marketing tactics are often employed due to the mere fact that it has significant commercial value to do so. Marketing relating to environmental aspects has become increasingly important as the environmental awareness of consumers increase. However, the requirements for such marketing are oftentimes very high. With this in mind, and before committing to various environmental marketing tactics, it is beneficial to examine the actual requirements in order for such claims to be considered legal. Simply put: Are you “green” or are you simply “greenwashing”?
According to the Swedish Marketing Act, marketing must comply with good marketing practice. This means that marketing must be truthful, accurate and be able to be proven. Furthermore, the person responsible for the marketing ultimately has the burden of proof that the marketing is in fact truthful and accurate. Beyond the Marketing Act, other regulations, such as EU marketing law, guidelines from the Swedish Consumer Agency, case law and norms, as well as the rules and regulations of the International Chamber of Commerce (ICC) must also be followed.
In particular, the rules of the ICC provide further clarity regarding marketing, which may mislead consumers specifically regarding the environmental aspects or benefits of goods and services, or of environmentally beneficial actions taken by the marketing party. In short, environmental marketing must be accurate, not vague and possible to verify. Furthermore, the actual effects of the environmental action must be possible to prove and the overall picture regarding the effects must be accurate. When the marketing regarding environmental aspects does not comply with above mentioned rules, the marketing is labelled as “greenwashing”.
In a couple of fairly recent cases, the Swedish Patent and Market Court (PMD) and the Swedish Patent and Market Court of Appeal (PMÖD) has shed some light on the matter of greenwashing, i.e. where companies have used phrases claiming that goods and services are environmentally friendly. The use of phrases such as ”Ecological!” and ”Good for the environment!” have previously been examined in connection to marketing of goods and services.
Just recently, the Swedish Consumer Agency sued Arla for the use of the phrase “net zero climate footprint”. The court held that, as a starting point, marketing of all kind must be truthful, accurate and clear. In regards to environmental marketing in particular, the court also held that such marketing has a significant commercial value, and at the same time, that it is hard for a consumer to accurately and critically evaluate the truthfulness, accuracy and clarity of such claims. As a part of their defence, Arla put forward various calculations in order to show how their actions would supposedly achieve “net zero climate footprint”. However, according to the court, the calculations were based on assumptions and approximations over a 100-year period. For that reason, the calculations were deemed to not only be uncertain, but the court also held that it was likely that a consumer would not actually perceive the claim to encompass such a long timeframe. Contrary to Arla’s arguments, the court held that it was likely that a consumer would read the claim more literally, i.e. that the actions left a “zero climate footprint” either immediately or at least during a shorter timeframe. According to the court, the marketing had therefore influenced, or might likely have influenced, the consumers’ ability to make informed business decisions, and as such, the marketing did not comply with good marketing practice. Arla was therefore prohibited (under penalty of a fine of SEK 1,000,000) from using the phrase “net zero climate footprint” or similar phrases in marketing.
The above-mentioned case shows that very high demands are placed on marketing claims, which relate to environmental aspects. Because of this, such statements should be used only if one can back up the claim with sufficient evidence. Overall, there is a risk in using environmental marketing, given the strict rules surrounding such claims. Even a fairly nonspecific praise such as ”good for the environment” may be problematic as evidence can hardly be furnished, thus running the risk that such claims would also be considered greenwashing.
In conclusion, while it may be tempting to ride the environmental awareness wave in order to boost sales or gain attention, the strict rules regarding environmental marketing means that one has to navigate the potential pitfalls very carefully.