What are the penalties for misleading claims in the UK?
Greenwashing, or making false or misleading environmental claims, is considered a form of false advertising and is subject to penalties under the consumer protection laws in the UK. The penalties for greenwashing can include fines, legal action, and damage to a company's reputation.
The UK government has issued guidance on environmental claims to help businesses avoid making false or misleading claims. The guidance sets out the types of claims that are likely to be acceptable, such as specific claims that are truthful, accurate, and based on verifiable evidence.
In addition to government guidance, there are also organizations that monitor and enforce environmental claims made by businesses. For example, the Advertising Standards Authority (ASA) in the UK can investigate and take action against businesses that make false or misleading environmental claims in their advertising. The ASA has the power to order the removal of misleading advertising and to impose fines on businesses that do not comply.
Moreover, consumers are becoming increasingly aware of greenwashing and are demanding more transparency and authenticity from businesses. If a business is found to be engaging in greenwashing, it can result in a loss of customer trust and damage to the company's reputation, potentially leading to a loss of business and revenue.
How can companies avoid greenwashing?
The Green Claims Code is a voluntary code of practice developed in the UK to help businesses make environmental claims in their advertising that are truthful, accurate, and substantiated by evidence. The code was first introduced in 2010 and was updated in 2021 to reflect changing standards and consumer expectations.
The Green Claims Code provides guidance for businesses on making environmental claims in their advertising, including what claims are likely to be acceptable and what evidence is required to support those claims. The code covers a wide range of environmental claims, including claims about carbon emissions, energy efficiency, recycling, and sustainable sourcing. The code also sets out specific requirements for certain types of claims. For example, claims about carbon neutrality or zero carbon emissions must be supported by evidence of offsetting or reducing emissions, and claims about the recyclability of a product must be supported by evidence that the product can be easily and effectively recycled.
The Green Claims Code is not a legal requirement, but businesses that choose to follow the code are expected to adhere to its principles and guidelines. The ASA can investigate and take action against businesses that make false or misleading environmental claims in their advertising, even if they are not following the Green Claims Code.
Green claims MUST:
1. Be truthful and accurate: Businesses must live up to the claims they make about their products, services, brands and activities
2. Be clear and unambiguous: The meaning that a consumer is likely to take from a product’s messaging and the credentials of that product should match
3. Not omit or hide important information: Claims must not prevent someone from making an informed choice because of the information they leave out
4. Only make fair and meaningful comparisons: Any products compared should meet the same needs or be intended for the same purpose
5. Consider the full life cycle of the product: When making claims, businesses must consider the total impact of a product or service. Claims can be misleading where they don’t reflect the overall impact or where they focus on one aspect of it but not another
6. Be substantiated: Businesses should be able to back up their claims with robust, credible and up to date evidence
Overall, the Green Claims Code provides a useful framework for businesses to make environmental claims in their advertising that are truthful, accurate, and supported by evidence, helping to prevent greenwashing and promote transparency in advertising. We highly recommend reading it if you’re making environmental claims!
Key takeout: Avoid greenwashing by having contextualised, science-based evidence to back up your claims.
Contact us today if you want to find out how we can help you avoid greenwashing!