Stop green claims and greenwashing: sustainability comes to court

Tough times for greenwashers thanks to the first case history in law. The first ordinance in Italy to punish misleading communication about green products has arrived. A change of pace that will increase the number of cases and sentences, but also improve the communication of sustainability.

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What is meant by green claims and greewashing?

A definition of green claim and greenwashing can be found in the working paper entitled “Guidelines for the implementation/application of Directive 2005/29/EC on unfair commercial practices” published by the European Commission on 25 May 2016: “The terms ‘environmental claim’ and ‘green statement’ refer to the practice of suggesting or otherwise giving the impression (in commercial communication, marketing or advertising) that a product or service has a positive impact or is environmentally neutral or less harmful to the environment than competing products or services. This may be due to its composition, the way it is manufactured or produced, the way it can be disposed of, or the reduction in energy consumption or pollution expected from its use. When such claims are untrue or cannot be verified, the practice is often referred to as ‘greenwashing’, or misappropriation of environmental virtues in order to create a ‘green’ image. Greenwashing can cover all forms of business practices towards consumers concerning the environmental attributes of products or services. Depending on the circumstances, it may include all types of statements, information, symbols, logos, graphics and trademarks, as well as their interaction with colours, used on packaging, on labels, in advertising, in all media (including websites), by any organisation that qualifies as a “professional” and engages in commercial practices towards consumers”.

The Alcantara-Miko case

A company that has been committed to sustainability for years has sued a competitor for using false claims, winning a historic victory in court by way of a protective order.

The case is Alcantara vs. Dinamica by Miko.

The punishment for this unfair greenwashing behaviour, awarded to Dinamica by Miko, consists in the widespread and direct dissemination to all present and future contacts (by all available digital means, including the press) of the text of the order itself.

What emerges unequivocally from this ordinance concerns in particular the rules for communicating sustainability issues that are typical of and different from those of traditional advertising: green environmental declarations must always be backed up by scientific data, proven by external certifying bodies, and must banish the generic; in other words they must be “clear, true and accurate and not misleading, based on scientific data presented in an understandable way“.

Over the years, such requests from citizens and companies will increase, and judges will play a fundamental role on the basis of this ordinance on issues of environmental protection but also against unfair practices in terms of social sustainability. The ordinance shows the need for companies to scientifically prove what they claim and communicate when describing their social responsibility actions and their social and environmental sustainability virtues.

Greenwashing and consumer protection

On the other hand, it emerges that false environmental claims are damaging to everyone: consumers are being prevented from making an informed choice, companies that are increasingly environmentally aware are being harmed by greenwashing as a form of unfair competition, and the financial system is being misled into investing in companies that are not seriously committed to the ecological transition.

The ordinance is based on the fact that “awareness of environmental issues is very high today and the ecological virtues extolled by a company or a product can influence purchasing decisions”. Consumer protection is referred to in the measure by the principles contained in the Treaty on the Functioning of the European Union (TFEU) and the Charter of Fundamental Rights of the European Union.

Consumer protection instruments in Italy

In Italy, in order to protect consumers and the companies themselves, there is control by the Italian Antitrust Authority, which has the possibility to act ex officio to punish misconduct in the form of misleading advertising and unfair competition; the same control is provided for the protection of benefit corporations, as provided for in Article 1, paragraph 384 of Law 208/2015, its founding legislation.

There is also the possibility of reporting, even anonymously, cases or potential practices of greenwashing through a participatory platform made available by the non-profit association Save the Planet. The association, in fact, as stated on their website, “has set up a commission of experts whose task will be to assess and monitor possible actions of miscommunication towards consumers in terms of sustainability”. It will then be the responsibility of the ‘commission to assess whether there are grounds for proceedings, after requesting any additions to the report, all with the utmost scientific rigour’.

Sustainability, which has become mainstream in recent times, is indeed a business opportunity, but care must be taken to ensure that it does not become merely the ‘object’ of marketing and superficial communication. At the basis of what is communicated, not only with claims but also with the most widespread tools such as the sustainability report, DNFs and impact reports, there must be measurements with objective data and scientifically recognised methods and standards. Because as Elena Stoppioni, president of Save the Planet, said: “Either sustainability is measurable or it is not sustainable“.

Consumer protection against greenwashing at European level

In January, the European Commission and national consumer authorities published the results of a website screening – the annual sweep to identify breaches of EU consumer law in online markets. This year, for the first time, the sweep focused on “greenwashing”.

The sweep analysed online green claims in various economic sectors, such as clothing, cosmetics and household appliances. It was found that

in more than half of the cases, the trader had not provided consumers with sufficient information to assess the truthfulness of the claim;
in 37 % of cases, the claim contained vague and general wording, such as ‘conscious’, ‘environmentally friendly’, ‘sustainable’, designed to give consumers the unsubstantiated impression of a product with no negative impact on the environment;
Furthermore, in 59 % of cases, the trader had not provided easily accessible evidence to support its claims.
Overall, taking into account various factors, in 42 % of the cases the authorities had reason to believe that the claim might be false or misleading and could potentially constitute an unfair commercial practice under the Unfair Commercial Practices Directive. Greenwashing’ has increased as more and more consumers want to buy environmentally friendly products.

Screening websites for ‘greenwashing’ is one of several initiatives undertaken by the Commission to empower consumers to make more sustainable choices. Other initiatives include the Green Consumption Pledge, an initiative launched by Commissioner Raynders on 25 January 2021, and the legislative proposal to strengthen the role of consumers in the green transition, which aims to provide consumers with better information on the sustainability of products and greater protection against certain practices such as “greenwashing” and premature obsolescence. This will be followed by a legislative proposal on demonstrating the veracity of environmental claims based on environmental footprint methods.

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