Greenwashing in advertising: status quo and expected developments
More and more companies are inclined to promote the sustainability characteristics of their products and services, without always being able to support these claims with evidence. Commonly known as “greenwashing”, this is a form of misinformation that can lead to legal issues. Found in both B2C and B2B contexts, this practice aims at presenting or promoting products, services (or part thereof), implicitly or explicitly, as more sustainable than they actually are. While it becomes a market trend, there is currently no specific legal framework at Belgian or European level that regulates greenwashing in advertising. As a result, the interpretation of what can be prohibited can still vary from one Member State to another, leaving companies in the dark as to what level of communication is permissible. But for how much longer?
In Belgian law, the general rules on misleading advertisements in Book VI of the Belgian Code of Economic Law (the “BCEL”) provide some legal framework to tackle greenwashing in advertising under certain conditions, although these rules do not focus specifically on this phenomenon. In order to curb greenwashing as prohibited misleading advertising, the claimant must demonstrate that the environmental claim may induce the target audience (i.e. the average consumer (Article VI.97, 1° and 2° of the BCEL), or a business (Article VI.105, 1° and 2° of the BCEL)) to take a decision that it would otherwise not have taken. This burden of proof resides with the claimant in accordance with Article 870 of the Belgian Judicial Code and can be a difficult obstacle to overcome in court. To date, few proceedings concerning environmental claims have been brought before Belgian courts (1) .
The Economic Inspection of the Federal Public Service Economy, SMEs, Self-employed and Energy published general guidelines on best practices for environmental claims in 2021, that were updated in 2022 (2) . These guidelines contain examples of best practices for companies in this area, in particular regarding the vocabulary used, the information to be provided, the proportionality, the general presentation, the relevance and the burden of proof. However, Belgian courts are free to deviate from them, so their actual impact has yet to be demonstrated.
In practice, the fight against greenwashing in Belgium is mainly conducted before the “Jury d’Ethique Publicitaire” or the “Jury voor Ethische Praktijken inzake Reclame” (the “JEP”), the independent self-regulatory body of the Belgian advertising industry. This could be explained by the fact that the JEP makes it possible to obtain a (non-binding) decision in a swifter and cheaper way than through regular proceedings on the merits before the Belgian courts (3). The JEP furthermore applies soft law that contains a specific response to greenwashing issues, i.e. (i) the International Chamber of Commerce (“ICC”) Advertising and Marketing Communications Code, which contains specific guidelines on environmental claims in commercial communication (the “ICC Code (4)”) and (ii) the Code of Environmental Advertising, adopted in 1997 by the former Commission on Environmental Labelling and Advertising (5) and which is applied as a self-disciplinary tool by the JEP (6) .
Inspired by the ICC Code, this Code of Environmental Advertising contains 4 basic principles and 14 specific provisions on environmental advertising. Although the decisions of the JEP are non-binding in nature, they can have an important reputational impact due to their public nature on the one hand, and the cooperation between the JEP and the press in case a company decides not to implement the decision on the other hand.
At European level, initiatives have recently been launched to harmonise the rules on greenwashing and environmental claims. The current patchwork of rules in the European Union could therefore be more unified in the future. More specifically, on 30 March 2022, the European Commission presented a proposal for a Directive 2022/0092 amending Directives 2005/29/EC on unfair commercial practices (7) and 2011/83/EU on consumer rights (8) as regards empowering consumers for the green transition through better protection against unfair practices and better information (the “Proposal”) (9) .
First, the proposed amendment to the Directive on unfair commercial practices adds a harmonised definition of the term “environmental claim”. According to this definition, an environmental claim is “any message or representation, which is not mandatory under Union law or national law, including text, pictorial, graphic or symbolic representation, in any form, including labels, brand names, company names or product names, in the context of a commercial communication, which states or implies that a product or trader has a positive or no impact on the environment or is less damaging to the environment than other products or traders, respectively, or has improved their impact over time”.
In addition, the Proposal provides for an amendment to Article 6 of the Directive on unfair commercial practices to explicitly include durability and environmental impact in the list of misleading product characteristics, as well as to qualify the making of an environmental claim related to future environmental performance without clear, objective and verifiable commitments and targets and without an independent monitoring system as a prohibited misleading commercial practice.
More importantly, the amendment to Annex I of the Directive on unfair commercial practices included in the Proposal, qualifies “generic environmental claims used in marketing towards consumers, where the excellent environmental performance of the product or trader cannot be demonstrated” and “an environmental claim about the entire product, when it actually concerns only a certain aspect of the product” as misleading under all circumstances and therefore as prohibited. This change should make it significantly easier for courts to characterise and prohibit misleading environmental claims.
Although at the time of writing the Proposal is still under discussion within the Council of the European Union , we believe it is important to follow closely future developments in this area as this can significantly change the legal framework of greenwashing. To be continued...
(3) Filing a complaint with the JEP is free of charge in the first instance. An appeal against a decision of the JEP requires the payment of a deposit, which varies according to the status of the appealing party. The deposit is refunded if the appeal is well-founded.
(7) Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market and amending Council Directive 84/450/EEC, Directives 97/7/EC, 98/27/EC and 2002/65/EC of the European Parliament and of the Council and Regulation (EC) No 2006/2004 of the European Parliament and of the Council (OJ L 149).
(8) Directive 2011/83/EU of the European Parliament and of the Council of 25 October 2011 on consumer rights, amending Council Directive 93/13/EEC and Directive 1999/44/EC of the European Parliament and of the Council and repealing Council Directive 85/577/EEC and Directive 97/7/EC of the European Parliament and of the Council (OJ L 304).