The Austrian Consumer Association (VKI) is taking a tougher line on advertising reviews: "We at the VKI want to drive forward more case law on greenwashing!", underline the consumer advocates (see here).
Following the announcement in the spring of its focus on fighting greenwashing, the VKI is now regularly taking action against breaches of the Unfair Competition Act (UWG) involving green advertising. As part of its greenwashing screening initiative, it examines reported cases, sometimes calls companies publicly to account, and often brings legal action – even without a prior warning – seeking an injunction and the publication of the judgement. The VKI celebrated its first successes in June this year with a ruling against a brewery. At the end of September, a new ruling against an airline was published. This is just the beginning. "Other proceedings are pending or in preparation," says the VKI (see here).
Recent case law
- CO2-neutral brewing process
In the first case, the VKI accused a brewery of greenwashing for using the following slogans (translated from German):
"Brewed carbon-neutral"
"We have been brewing 100% carbon-neutral since 2015"
"100% of the energy required for the brewing process comes from renewable sources"
In his view, consumers would expect the brewing process – from the harvest onwards, and thus including the malting process – to take place entirely without any greenhouse gas emissions. However, as the brewery purchased malt from malting plants that generate significant CO₂ emissions during the malting process, the claims made were misleading within the meaning of Section 2 of the Unfair Competition Act (UWG). The brewery took a different view: the public would understand the brewing process to mean only the processing of water, hops and malt, and not the upstream malting process as well.
The Court of First Instance largely agreed with the VKI. Although, from a purely technical point of view, the malting process is not part of the brewing process, the average informed consumer would not make such a distinction. Nor had the brewery adequately informed the public; on the contrary, it had even presented malting as part of the brewing process. On one point, however, the court of first instance agreed with the advertiser’s arguments: when highlighting individual CO₂-neutral production steps, companies are not strictly required to put these into context with the product’s overall climate impact.
The judgement is final.
- CO2-neutral flying
The most recent final judgement, 29 Cg 62/22z, against an airline concerned the following green advertising statements (translated from German):
"Fly CO₂-neutral to the Biennale? No challenge for us! 100% SAF."
"Together with Vienna Airport and Venezia Airport, we take you to the Biennale Arte in Venice using sustainable aviation fuel (SAF)."
Passengers were able to book a sustainability upgrade for a substantial additional charge. In such cases, according to the airline, each passenger’s individual fuel consumption was calculated and the corresponding amount of SAF was blended into future flights.
The court considers this to be misleading. By highlighting "100 % SAF" in an eye-catching manner, the advert suggests that the flight in question is already being operated using 100 % SAF. SAF is a sustainable aircraft fuel, but it may only be blended with conventional kerosene up to a maximum of 5 %. This also means that it is, by its very nature, impossible to fly in a carbon-neutral manner using 100% SAF. The advertiser has also failed to provide enough information on this point.
Decisions in line with previous case law
The most recent decisions essentially follow previous case law and come as no surprise:
- Environmental claims must be clearly proven and must not mislead the target audience.
- In the case of ambiguous advertising claims, this applies to every reasonable interpretation of the claim.
- When assessing the target audience’s susceptibility to deception, the average consumer – who is environmentally conscious, socially minded and sensitive – should be taken as the benchmark.
- Where references to social and environmental aspects could be misunderstood, the advertiser is obliged to provide further clarification.
Even so, blanket claims such as "carbon neutral" are particularly problematic, regardless of the sector. As the examples above also show, such claims are often used without proper distinction. This leads courts to interpret sustainable product characteristics widely. If they cannot be verified, the claim is objectively incorrect and therefore misleading.
Conclusion and Outlook on Green Claims Regulation
Green advertising messages can cross the line into unfair advertising relatively quickly. Texts and advertising claims should therefore be reviewed proactively. This is the only way to identify and minimise the risk of anti-competitive business practices at an early stage.
Enforcing claims under the UWG in the context of green marketing will become significantly easier for consumer protection organisations and competitors in future. With the rapid implementation of the Green Claims Directive (COM/2023/166) and the Directive on empowering consumers for the green transition through better protection against unfair practices and better information (COM/2022/143) green marketing will be subject to stricter regulation. These are scheduled to come into force as early as 2024. An overview of the key points of the planned changes:
- Stricter documentation requirements for green claims are being introduced;
- Furthermore, there is a proposal that every environmental claim must also be verified by an external body;
- The use of eco-labels will be strongly limited;
- Finally, the provisions of the UWG are to be expanded to include specific green business practices. This includes, for example, adding unsubstantiated, general environmental claims such as "environmentally friendly", "eco-friendly", "eco", "green", "CO₂-neutral" etc., or unverified sustainability labels, such as fictitious labels, to the per se prohibitions in the "blacklist".
With a view to the forthcoming ESG and PR strategy planning for 2024, it therefore makes sense to address current and future advertising limitations at an early stage.