The UK continues to crack down on greenwashing in advertising. In February 2023, the UK’s Committee of Advertising Practices (CAP) along with their broadcasting counterpart (BCAP) updated their environmental guidance on carbon neutral and net zero claims in advertising. This week regulators banned three advertisements because of unsubstantiated or misleading environmental claims. NGO Adfree Cities prevailed in their argument that ads from Shell, Repsol, and Petroliam Nasional Berhad (all energy companies looking to green their image in the transition economy) were improper under UK advertising rules and should be banned by the Advertising Standards Authority (ASA).
Adfree Cities challenged three ads from Shell: a poster, a TV ad, and a YouTube ad. The ASA found all three breached UK advertising regulations and were misleading. Shell’s ads touted clean domestic energy production in the UK and featured language such as “#PoweringProgress.” The ASA found consumers were likely to believe Shell has made major progress in decarbonization, when in reality the company remains a major emitter of CO2.
The ads failed to put Shell’s clean energy production into the context of the business as a whole. The ASA recognized consumers generally know Shell is primarily a fossil fuels company, but because of the public’s expectations for companies to decarbonize, the ASA determined consumers might believe Shell’s energy strategies had shifted further away from fossil fuels than they actually have.
Repsol’s ad came in the form of an online advertisement in the Financial Times. Repsol highlighted their development of new biofuels stating, “At Repsol, we are developing biofuels and synthetic fuels to achieve net zero emissions.” The ASA took issue with this ad for three reasons:
- Repsol’s investments into biofuels and synthetic fuels are not the company’s only investments and the company continues to invest in fossil fuels production.
- Despite Repsol’s investments in biofuels and synthetic fuels, these investments alone cannot get the company to net zero by 2050; and
- Repsol’s net zero date of 2050 did not appear in the ad and was material to their claim.
Petroliam Nasional Berhad
The Berhad ad was a television commercial following a template we’ve all seen in environmental ads. A child voices over a dramatic scene of environmental degradation which transitions to picturesque views of classrooms and solar panels as the company’s initiatives are mentioned. A unique part of the Berhad ad is that the company seems to accept some blame for the environmental crisis with the statement, “as the world produced more energy it became nature’s problem, and we were part of it.” Despite this vague attempt to take responsibility, the rest of the ad promotes Berhad as a “progressive energy and solutions partner” on a mission to “reduce emissions, grow renewable energy, bring education to more, champion social impact and promote a circular economy, as well as achieve net zero carbon emissions by 2050.”
The ASA banned the ad on the grounds that it would lead consumers to believe that Berhad was fully committed to sustainability in all aspects of its business. The regulator believed consumers would get the impression that Berhad’s statements were more than aspirational and constituted a major shift in the company’s practices. In reality, Berhad continues to be a major emitter. The ASA determined Berhad’s current emissions are material to the message of the advertisement and that omitting them made the ad misleading.
European Scrutiny is Increasing
While the UK may no longer be part of the EU, it appears the two governing bodies see eye-to-eye on greenwashing. Five nations (the UK, Switzerland, France, Belgium, and the Netherlands) brought a challenge against soccer organization Fifa to the Swiss Fairness Commission regarding Fifa’s statement that the 2022 World Cup in Qatar was “the first fully carbon-neutral World Cup.” Fifa’s claim relied heavily on the purchase of offsets and included other aspects like electric transportation at and around the event site. However, the Swiss regulator concluded that Fifa could not substantiate these claims and barred the organization from using similar claims in the future. This is interesting because the complaining countries consist of three EU and two non-EU European nations. This indicates that Europe’s greenwashing crackdown is transcending borders as regulators across the continent are putting their foot down.
What this Means
We’ve been covering greenwashing in several forms globally and the trend is clear. Advertising based on environmental claims is getting more difficult – particularly in the EU and the UK. The US may soon join in on the crackdown depending on how the FTC’s review of the Green Guides goes this year. I think the most interesting takeaway from these ad bans is the ASA’s approach and commitment to providing consumers with context.
Each of these ads promoted sustainability initiatives that are real, backed up by investments and data. However, the ASA focused on how these energy company’s overall business strategies meshed with the statements made in the ads. The message is clear, if you want to advertise based on environmental claims in the EU, that advertisement cannot lean solely on siloed sustainability projects and ongoing research into decarbonization. In the US, each of these ads might pass muster as being technically true or “non-actionable puffery,” but if more challenges to corporate net zero messages are brought in the US, that very well could change too. The more expansive analysis taken by the UK examines how a business’s environmental claims align with their overall operations, which will make it more difficult for heavy emitters to pass themselves off as “green” to the public.