Powers of persuasion: Adland guidance to greenwashing brands

Dutch airline KLM has become the latest company to face litigation as a result of accusations relating to “misleading” environmental advertising – also known as greenwashing – in what is believed to be the world’s first such case in the aviation industry.

Greenwashing claims are not limited to any particular sector, with HSBC also reportedly facing accusations from the UKs Advertising Standards Authority (ASA) in relation to advertisements which were thought to be misleading.  

Juice company Innocent, which was ordered by the ASA to remove a misleading advertisement has called for clearer guidance and a common framework to ensure businesses feel confident about communicating their sustainability goals.

Amid an increasing wave of greenwashing claims globally the World Federation of Advertisers (WFA) has published new landmark guidance. This follows other recent regulatory interventions designed to tackle greenwashing, notably the EU Taxonomy, which set standards that corporate activities must meet in order to be legitimately badged as ‘sustainable’.

The new non-binding guidance by the WFA aims to address the potential for consumer harm where a business claims to operate in an environmentally sustainable manner, but in fact may not do so. It sets out six key principles to follow to ensure environmental claims to consumers are credible:

1. Claims must not be likely to mislead, and the basis for them must be clear.

2. Marketers must hold robust evidence for all claims likely to be regarded as objective and capable of substantiation.

3. Marketing communications must not omit material information. Where time or space is limited, marketers must use alternative means to make qualifying information readily accessible to the audience and indicate where it can be accessed.

4. Marketers must base general environmental claims on the full lifecycle of their product or business, unless the marketing communication states otherwise, and must make clear the limits of the lifecycle.

5. Products compared in marketing communications must meet the same needs or be intended for the same purpose. The basis for comparisons must be clear and allow the audience to make an informed decision about the products compared.

6. Marketers must include all information relating to the environmental impact of advertised products that is required by law, regulators or Codes to which they are signatories.

The regulatory, litigation and reputational risks for companies are multiplying as regulators and legislators take a tougher stance. Businesses should carefully consider what statements they make about environmental and social impact in the context of the complex risk environment and the developing conversation about greenwashing.