Regional Court of Karlsruhe: Advertising with the claims "climate-neutral" and "environmentally neutral product"

Co-author: My Anh-Cao

In a decision by the Regional Court of Karlsruhe on 26 July 2023 (Ref.: 13 O 46/22 KfH), the court had to deal with the admissibility of advertising products with the terms "climate neutral" and "environmentally neutral". The judgement is likely to be relevant for all branches of industry and in particular for the pharmaceutical industry and medical device manufacturers, especially as "green advertising" is also a trend in these sectors and an increasingly strict judgement can be observed in case law.

The plaintiff is a consumer protection association. The defendant is a drugstore retailer. The defendant also sells products under its own name and brand. The products in dispute are the defendant's products, which it advertised as "climate neutral". The plaintiff considered this to be a misleading commercial act and was of the opinion that the defendant actually meant the term "CO2-neutral", as "climate-neutral" meant that all harmful greenhouse gases were neutralized, which was not the case. Also in dispute is a product series "Pro Climate" marketed by the defendant, which is advertised as "environmentally neutral". According to the plaintiff, this was also misleading, as the product should not have any negative effects on the environment.

The Regional Court of Karlsruhe considered the advertising of the products with the claims "climate-neutral" and "environmentally neutral" to be a violation of Sec. 5a Para. 1 UWG and Sev. 5 Para. 1, 2 No. 1 UWG. The defendant had breached its duty to provide information pursuant to Sec. 5a UWG by withholding material information from the targeted consumers. This is because in the case of product advertising with a claim consisting of a complex structure of effects, there is a greater need to inform consumers and a correspondingly greater duty to provide such information on the part of companies. Consumers in particular have a heightened awareness of climate change and are critical of a company's advertising with the compensation of greenhouse gas emissions with regard to possible "greenwashing". Claims about sustainability and climate neutrality therefore have a considerable influence on consumer purchasing behavior. If a product is advertised with the claim "climate neutral", it is essential for consumers to make an informed decision as to which steps in the life cycle of a product the claim used refers to, whether certain emissions are excluded from the accounting and whether the climate neutrality of the specific product is only achieved through reduction or compensation. For example, a reference to a website with more detailed information on the test criteria used would also suffice. According to the Regional Court of Karlsruhe, however, the consumer must be able to recognise from the print on the packaging that such a website exists. The claim "climate neutral" was also considered misleading because climate neutrality cannot be achieved through the compensation measure chosen in the present case, namely through compensation using forest conservation projects. This is because the forest binds and stores the CO2 only temporarily and not permanently.

Advertising products with the claim "environmentally neutral" was also considered misleading. The consumer understands products advertised with the neologism "environmentally neutral" to be products with a balanced environmental footprint. It follows from this that after reducing environmental impacts and compensating for the continuing environmental impacts, no (negative) impacts on the environment may remain at all.