Making sure the right colour paint is on the brush

10 July 2023 | Business & Workplace | Author: Emma Allen

Businesses must make sure they do not paint themselves in artificial shades when it comes to pushing their environmental credentials.

It follows the news that Shell has been found guilty of ‘greenwashing’ with an advertising campaign themed ‘ready for cleaner’ that breached advertising guidelines.

The Advertising Standards Authority (ASA) ruled the petrochemical giant’s campaign was misleading as it left out information on Shell's more polluting work with fossil fuels. The adverts are banned from appearing in future.

It's the latest such breach to be confirmed by the ASA, following bans for Tesco for a plant-based burger ad, a Persil advert, and two HSBC adverts, all of which were found to be misleading in their claims of environmental benefits.

The ASA is the UK’s independent advertising regulator and is responsible for making sure that ads across UK media stick to the advertising codes.

“Action like this to tackle inflated environmental sustainability claims is only likely to increase in future, as we see rising consumer and investor demands for products and services that really fulfil sustainable objectives,” said Emma Allen, Fishers Director and Dispute Resolution Solicitor.

“Companies who may have selectively highlighted some actions over others, or perhaps slapped a green label and a recycle logo on a product, need to be aware that their customers are going to look below the surface to be sure they are not being offered empty promises by brands.”

The practice of corporate greenwashing has been in the spotlight in the financial services sector too. The Financial Conduct Authority has anti-greenwashing rules on its schedule for later this year, for inclusion in its Sustainability Disclosure Requirements (SDR).

Added Emma: “Certainly, larger organisations need to be clearly focused on Environmental, Social, and Governance (ESG) ratings, as this increasingly drives investment decisions in financial markets. This type of attention will inevitably filter down to smaller enterprises in terms of consumer demands.”

The term ‘greenwashing’ was first coined by an environmentalist in the USA during the 1980s but did not enter common use until recently. Some of the examples highlighted as corporate greenwashing tactics include:

• claiming positive ESG processes while they are being implemented, when actual progress or results are yet to be achieved
• cherry picking product attributes or data and ignoring others which would be negative in environmental terms
• misuse of labelling schemes

ASA and sister organisation CAP have published guidance to help businesses comply with their codes for broadcast and non-broadcast advertising, sales promotions and direct marketing communications, including postings on social media.

Please note: This is not legal advice; it is intended to provide information of general interest about current legal issues.