On Friday 23rd June the UK's Advertising Standards Authority issued an updated version of their guidance on misleading environmental claims. The guidance updates the previous version, from December 2021, (although frustratingly, neither are dated) and reflects more recent decisions, such as those against the fossil fuel giants Shell, Petronas and Repsol (which you can read about here); as well as the airlines Lufthansa and Etihad (which you can read about here and here) and the water utility companies, Anglia Water and Severn Trent (which you can read about here). The advice also touches on the decision against HSBC (which we covered here)
Context of the new guidance
The updated guidance should be seen in the context of the work of the Competition and Markets Authority (CMA), as well as government policy and the announcement by the UK's Climate Change that consumer behaviour must change for the UK to meet its net zero targets, particularly in the heating, energy, transport, waste and food sectors. As advertising is a key driver of such consumer behaviour, the ASA believes, not unreasonably, that it has an important role to play in helping the UK to meet these targets.
Greenwashing v. Greenhushing
In the opinion piece published to announce the launch of the guidance, the ASA also gives a nod to the tension between 'greenwashing' and 'greenhushing', which happens when advertisers say nothing about their green credentials or initiatives for fear of being sanctioned by the ASA or other regulators.
The ASA denies that companies have this binary choice. It says they can strike a balance between those extremes, pointing to an unnamed "high carbon emitting business" that achieved this balance by including "straightforward, prominent copy in ads that acknowledges the less-climate-positive aspects of their activities, that indicates how early in their journey they are, or that provides summary details of their future planned activities." We know who they are but it's a shame that the ASA did not go down the route of obtain a decision from Council ('Not Investigated After Council Decision') in response to the well-publicised complaints from AdFree Cities, as that would have provided useful guidance for all advertisers. If this comment in the opinion piece is intended to make up for that deficiency, it's a shame there is no reference to if in the guidance itself, which is presumably because there is no definitive Council decision on the matter and so it cannot be included in the guidance. However, this image may help your understanding of the point.
While the opinion piece argues that greenhushing should not be advertisers' knee-jerk reaction to fears of accusations of greenwashing, the guidance itself says, "the ASA will, in future, apply a stricter interpretation under the CAP and BCAP Codes, where evidence exists of misleading or socially irresponsible advertising that concerns the environment." Gulp. If what we've seen recently represents the ASA taking a light-touch approach, the future for green claims is not looking bright. Its looking distinctly red, as in 'stop', rather than orange as in 'maybe'. We are already seeing some clients make the rational decision to take refuge in 'greenhushing', rather than risk charges of greenwashing. Unfortunately, this guidance may to accelerate that flight to caution.
Claims about initiatives designed to reduce environmental impact.
There are no new rules in the guidance, but it provides a valuable compendium of the rationale for many previous ASA decisions. It will also not be binding on the ASA Council, which is the sole arbiter of whether the CAP or BCAP Codes have been infringed.
The most significant new guidance comes in the section headed "Claims about initiatives designed to reduce environmental impact". The provides the rationale for several of the recent decisions against advertisers such as HSBC and Shell which have been found to be misleading by omission, by talking about their positive environmental initiatives, without touching on their negative impacts as well. Examples of potentially misleading claims include:
- Green claims with a narrow application which are literally true but unrepresentative of the whole business.
- Unqualified green claims about a specific product which could mislead consumers are unlikely to distinguish between name of the specific product and the overall brand. This is probably a reference to the recent Shell decision which found that its advert did not adequately distinguish been its green energy businesses and its traditional oil and gas business.
- Claims about specific environmentally beneficial initiatives which do not include balancing information about the advertiser's significant ongoing contribution to environmental harm. This is clearly a reference to the HSBC decision, where the bank referred to their financing of various green activities, without any mention of their funding of traditional fossil fuel businesses.
- Claims by traditional fossil fuel businesses about their responses to the climate crisis which do not provide sufficient information for consumers to place these claims in the context of their current total activities. See the recent Petronas decision for an illustration.
- Claims by water companies will be assessed by the ASA in the context of their Environmental Performance Assessment (EPA) issued by the Environment Agency. If a water company has a low EPA rating, then failure to mention that when spouting its green claims is likely to be a misleading omission, as Anglia Water found to its cost.
- Imagery can also be misleading, if it creates the impression of
a greater reduction in greenhouse gases than can be substantiated.
The Lufthansa decision is a neat illustration of
this point.
- Absolute claims such as "sustainable" or "environmentally friendly" will need a high level of substantiation.
- Aspirational claims that stray into claims that an advertiser is already reducing emissions are likely to be misleading in the absence of information about "the balance of current activities, current emissions and the pathway to reducing these." The flightpath for Etihad's claims illustrates this point. The guidance also says that aspirational claims about "reaching net zero or achieving carbon neutrality should be based on a verifiable strategy to deliver them." This means making those plans available to consumers.
- Offsetting schemes as substantiation also receives a special mention in the guidance, consistent with the fact that regulators seem to be taking a greater interest in them. The guidance says that if a claim to reduce carbon emissions relies on offsetting this must be called out, so consumers do not think that the product or service itself generates little or no emissions. Furthermore, information about the offsetting scheme being used must be provided.
The guidance runs to 20 pages, so it is impossible to reflect the whole document here, and we urge you to consult yourself for the full detail.
Social responsibility
Another key aspect of the guidance is that it stresses the application of the CAP and BCAP Rules concerning social responsibility are also relevant in the context of reducing environmental harm. The problem is that the social responsibility rules are vague and nebulous – essentially they say that ads must be prepared with a sense of responsibility to consumers and to society. But what does that mean in this context?
- Are we heading towards the French policy of banning ads which suggest that you take your car for a drive for fun, and not just out of necessity?
- Are we going to ban ads for SUV's? Or for all cars other than EV's?
- Will ads for EV's have to remind people about the environmental impact of lithium batteries?
- Will ads for domestic flights having to carry small print urging people to take the train instead? (Except on strike days, obviously.)
- Can we still show cars being driven off-road? They can't in France.
- The guidance calls out a recent decision NOT to uphold a decision against an ad by Jaguar Land Rover that showed a car being driven on an untarmacked mud track through a forest, but which did not appear causing environmental damage. (You can read more about the decision here). But reading the guidance, its hard to avoid that the ASA is putting down a marker to say that we should not assume that a similar conclusion would be reached again on similar facts.
Unfortunately, this section of the guidance is rather thin, and the examples of behaviour that would break the rules are rather obvious. Given the breadth and uncertainty of the social responsibility rule, it will remain a challenge to advise on its application, particularly when the ASA appear to be signalling that it is going to be given greater significance in future.
Setting the record straight: Just how gullible is the Average Consumer?
For advertising regulations nerds like us, it is interesting to look back at how the ASA has dealt with certain issues in the past, such as environmental advertising, as well as references to race, gender and sexuality. It was therefore interesting to read the ASA saying although it has previously not upheld complaints about an image of an oil refinery producing flowers from its chimney on the basis that the average consumer was unlikely to be misled about the accuracy of the depiction or as implying an environmental benefit, advertisers should be cautious about overstating their environmental credentials. Is this a dumbing down of the regulatory system? Has the mental acuity of the average consumer diminished over time? Or has the ASA become more literal? Or both? Here is the image in question, and we'll let you decide if this would be misleading today.
The elephant in the room
The guidance is a very useful document, providing a summary of the relevant rules and the rationale for ASA decisions. It is striking, however, that there is a major gap in UK advertising regulation that we have written about before. The regulation of political advertising. In Switzerland, there has just been a referendum on whether to adopt a target for Net Zero. We know that the same people who agitated for the Brexit referendum have now turned their sights on a similar referendum in the UK in which their aim would be to persuade the public that the goal of Net Zero is an expensive and unnecessary waste of money. Indeed, the night before the publication of the guidance, the possibility of a referendum was mentioned on the BBC TV programme, Question Time, by a speaker from the Brexit Party.
We know that during the Brexit reference, Boris Johnson, exploited the absence of any regulation of political advertising to make his claim about £350 million per week for the NHS. We knew then and we know now that the claim was misleading, if not downright false. As of last week's endorsement of the Privileges Committee Report by the House of Commons, we also know that Mr Johnson is, shall we say, a stranger to the truth – which as appropriate, because from now on, having been denied the pass usually issued to former MPs, the only way he will be able to witness proceedings in the House of Commons will be from the Strangers' Gallery.
The stated context for the guidance is government policy and is designed to stop advertisers from making misleading environmental claims. The danger is that government policy could be turned upside down by a referendum on net zero won by politicians who will be able to lie with impunity about the dangers of climate change in advertising during the build up to the referendum. So in that context, without the regulation of political advertising, either by the ASA or another body, it may transpire that the regulation of green claims is not based on firm foundations.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
