Greenwashing: How to communicate without misleading?
In the face of the climate crisis, the interest in sustainability issues is growing. This increasingly brings the issue of greenwashing to the fore. “Greenwashing” refers to creation of a false impression among the public regarding the supposedly green practices applied by a business or the environmental benefits of its goods and services. Typically greenwashing is used to raise the attractiveness of goods or services in the eyes of prospective buyers, and thus to increase sales and attract customers. But sometimes the spread of misleading ecological messages is simply due to ignorance.
It is clear that the increase in global consumption is increasing pressure on the environment. In turn, more and more often consumers want to make informed, environment-friendly choices, guided by information presented by manufacturers or retailers. On average, half of Poles claim that they are paying increasing attention to environmental and ecological issues when shopping for consumer goods and are willing to pay more for products if they are recyclable or have been manufactured sustainably (ING Think Forward Initiative, “Report: Poles’ choices and sustainability,” September 2021). In this process, consumers have the right to reliable information about the environmental impact of the products they intend to buy.
The EU perspective
On 30 March 2022, to strengthen the position of consumers in this respect, the European Commission published a draft directive amending the Unfair Commercial Practices Directive and the Consumer Rights Directive (currently, the proposal is at the stage of first reading in the Council of the European Union under procedure No. 2022/0092/COD). The proposal is intended to enable consumers to make informed and environment-friendly choices when purchasing products and strengthen consumers’ protection against unreliable or misleading environmental claims by outright banning practices bearing the hallmarks of greenwashing.
Under the Unfair Commercial Practices Directive, the list of product features regarding which the business should not mislead consumers is to be amended. Among other things, the list is to be expanded to include “environmental or social impacts.”
The directive lists commercial practices considered misleading, i.e. those causing or likely to cause the average consumer to make a decision regarding a transaction that he or she would not otherwise have made. Among other things, the practice of formulating statements regarding environmental friendliness, related to future environmental efficiency, without clear, objective or verifiable commitments or targets and without an independent monitoring system, will be added to the list of such practices.
Additionally, the list of trade practices deemed to be prohibited in any case will be expanded to include:
- Displaying a sustainability label not based on a certification system or established by public authorities
- Making an environmental claim for an entire product when the claim applies only to a specific aspect of the product.
Activity of the Polish regulator
In Poland, the president of the Office of Competition and Consumer Protection (UOKiK) has observed that issues related to ecology, including the environmental impact of a product or its packaging, may constitute important information for consumers and thus influence their decision to purchase a particular product (e.g. in decision no. DOZIK-5/2022 of 6 March 2022, which concerned irregularities in the declared composition of raw materials used in clothing).
Currently, the president of UOKiK is conducting oversight activities to verify practices that may bear the hallmarks of greenwashing in connection with businesses offering products for sale and conducting marketing activities more broadly. Over the past three years, the regulator has sent “soft” requests (without initiating proceedings) to over a dozen companies requesting voluntary clarification of doubts surrounding compliance with competition and consumer protection regulations of the companies’ use of slogans alluding to ecology, sustainability, and environmental protection. In recent months, the authority’s activities in this regard have clearly intensified, as it has also initiated investigative proceedings regarding businesses, mainly in the clothing and cosmetics markets, to determine whether the businesses have committed a violation justifying the initiation of proceedings for practices violating the collective interests of consumers.
Among other things, the authority is examining whether, in their marketing practices, the businesses have used commercial information, labelling or claims referring to ecological, sustainability or environmental issues and whether they have verified the veracity of these statements. So far, administrative decisions directly addressing greenwashing have not yet been issued.
Potential sanctions
Greenwashing may constitute a practice violating the collective interests of consumers. For businesses whose “green” claims and labels are untrue or present information in an incomplete or unreliable manner, or otherwise create a risk of misleading consumers, the president of UOKiK may initiate proceedings for violation of the collective interests of consumers. This can carry a potential fine of up to 10% of an undertaking’s turnover in the financial year preceding the year when the fine is imposed.
Practical guidance
To minimise the risk of greenwashing allegations, communications regarding a business’s activities or products should enable consumers to make an informed and reliable choice, and thus should be clear, precise, justified, and grounded in reality.
Claims should not be made regarding the environmental performance of an entire product if, in fact, they apply only to a certain aspect of the product. It must be clear to the consumer that the claim applies to a specific aspect and not to the product as a whole (for example, to say a product is “biodegradable” is a general claim, while indicating that “the packaging is biodegradable through home composting within one month” is a sufficiently specific claim).
Also, information about the socially sustainable nature of products, including the working conditions under which the product is manufactured, or the manufacturer’s charitable activities or attention to animal welfare, should not mislead consumers.
Environmental claims, in particular climate-related claims concerning future effectiveness in the form of transition to carbon neutrality, climate neutrality or a similar target by a certain date, should be supported by clear, objective and verifiable actions, commitments and targets undertaken by the business. Such claims should also be supported by an independent monitoring system to track the business’s progress in meeting commitments and targets.
There is no doubt that businesses should employ environmental messages in their marketing with caution, and ensure that they are precise and well-founded in actual ecological practices or features of the product or packaging. However, the fear of being accused of greenwashing should not deter businesses from seeking to pursue sustainability or promoting such activities.
Weronika Nalbert, adwokat, Competition & Consumer Protection practice, Wardyński & Partners
