6 of 6

3 April 2023

Greenwashing – 6 of 6 Insights

Checklist for green claims in Austria

Martin Prohaska-Marchried and Martina Stranzinger provide the top 15 points for marketers to consider when making green claims in advertising in Austria.

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Authors
Martin Prohaska-Marchried

Martin Prohaska-Marchried

Partner

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Martina Stranzinger

Martina Stranzinger

Senior Associate

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Environmental claims have become an integral part of advertising. For marketers, it is hard to keep on top of what is and isn't allowed due to recent and ongoing developments in case law and legislation. Green claims that are untrue or unverifiable will quickly labelled as 'greenwashing'.

In Austria, legal proceedings regarding 'greenwashing' are pending and the Association for Consumer Information (“Verein für Konsumenteninformation”) is carrying out a 'Greenwashing Check' on Austrian businesses, publishing the results on its website, naming and shaming those who are non-compliant.

The following 15-point checklist provides initial guidance from an Austrian law perspective when making green claims in advertising.

Can the green claim lead to an accusation of greenwashing?

Check claims making environmental statements, including those about:

  • carbon neutrality
  • the use of recycled materials, or
  • the generation of green energy,

critically before they are used. The legal requirements for meeting this type of claim set a very high bar under Austrian case law.

Is the green claim true?

Think about whether the green pledge is true and consistent with what is actually happening. No benefit from sustainability may be claimed that is not factually accurate. Nor should an advertised benefit be exaggerated.

Example from case law "fine dust - no dust"

A district heating provider advertised with the slogan "No dust" and gave the impression that district heating only caused very low fine dust pollution. This statement is incorrect, though, if the district heating is produced from biomass.

Example from case law "Ocean Bottle"

The Austrian Supreme Court has been particularly strict on advertising about recycling. Bottles had a label showing a bottle floating in the sea and the slogan "Ocean Bottle, made with 50% plastic waste from the sea". The bottles were made of more than 50% recycled plastic collected from beaches, but the plastic was not fished from the sea. The court clarified that consumers understood the advertising to mean that the recycled plastic was plastic waste washed up from the sea. It was a material difference to customers whether the recycled material came from the sea or from beaches.

Does the customer have all the information to understand the green claim correctly?

Environmental topics are often complex and cannot be understood by laypeople unless they are explained. Only if customers know what is behind a green promise can they decide whether they want to support the product by buying it. This means you should avoid vague or general claims about an environmental benefit. Concrete initiatives or plans of a company are more understandable for customers than vague or unclear statements such as "environmentally friendly", "sustainable" or "ecological" so describe the sustainability benefits as precisely as possible. The more specific the claim, the lower the legal risk.

Example “CO2 neutral"

If a product is advertised as "CO2 neutral" or "climate neutral", you must point out whether or not the climate neutrality is achieved solely through offsetting services (Austrian Supreme Court, case 4 Ob 202/12b). In the absence of information, consumers could wrongly assume that the advertised production takes place entirely without greenhouse gas emissions or a de facto reduction.

Is it clear what the green claim refers to?

Is it clear to the customer whether the green claim refers to the entire product or only to individual parts or areas of the product (individual component, packaging, transport)? Also ask yourself whether the customer can distinguish between the sustainability aspects of the product, the company, or the brand.

Example "100% recycled materials"

A manufacturer claims "100% recycled materials" on product packaging. This is ambiguous, because it is unclear whether the claim refers to the packaging or the product itself. A clearer (and less risky) approach would be, for example, saying: "This packaging is made from 100% recycled materials".

What should you consider when using eco-labels?

If an eco-label (such as Fairtrade, FSC, OK compost from TÜV Austria or the "Hundertwasserzeichen") is used, then check the following points:

  • Are the requirements for using the eco-label met?
  • Is it clear what the eco-label stands for and according to which criteria it was certified (the information about the certification criteria should be accessible to the customer)?
  • Can the customer see which organisation has awarded the eco-label?
  • Is the objectivity and independence of the awarding organisation established (only required with private institutions)?
  • Make sure that the size, design, and placement of the label do not create an incorrect impression for your own advertising. For example, an eco-label awarded for a specific product should not be placed next to the brand or company name if it does not refer directly to the brand or company.
  • Avoid self-designed eco-labels and logos. If self-designed eco-labels are used, you must let the customer know that they have not been independently verified.

Have you got supporting evidence for your claims?

Evidence to support any green claim is crucial. This can be provided by expert reports, studies, certificates, or professional articles. However, "field reports" are not usually enough to prove a case in court. Check whether the environmental claims are true for the entire time they are in use. This involves checking the claims regularly to make sure they are up to date and, if necessary, adjusting them.

Example "sustainable palm oil"

A manufacturer advertises the use of "sustainable palm oil" but cannot back up the claim with facts and evidence. Since palm oil has a variety of negative impacts on humans, animals, and the environment (deforestation of rainforests, carcinogenic pollutants during refining, displacement of indigenous peoples), any concrete advantages the "sustainable palm oil" brings must be explicitly set out and capable of being proven.

Think about what the customer will understand from your statement

Consider the green claim from the perspective of a customer who does not have all the background information and who pays only brief attention to the advertising. Consulting an independent third party can be helpful to identify risks of misleading and potential for improvement.

Does the advertisement address a specific clientele - b2b or professionals?

If the green claim addresses a clearly definable group of customers, then the assessment should focus on how this group of customers understands the environmental claim. It is essential to tailor the green claim to the target group.

Is the language clear and easily understandable?

Make sure that the language used to make a green claim is clear and use simple and easy-to-understand terms. Avoid technical jargon. Environmental terms and definitions (chemical recycling, "CO2 eq", offsetting, "Scope 1 to 3") can be unfamiliar to customers, so you need to explain them. Be particularly careful with technical terms in foreign languages.

Visuals - what overall impression does the advertisement convey?

Check not only the actual text, but the entire design of the green claim. The visuals used to present a product can also mislead (icons, images, choice of colours, illustrations, sounds, symbols, labels – for example using lots of green and depicting leaves). Pay attention to where the individual elements are placed.

Does the advertised environmental benefit hide another negative effect?

If a green claim overemphasises an environmental aspect even though its impact is marginal, this could constitute greenwashing. The advertised aspect of the product should be given appropriate weight. If the advertised environmental impact is negative over the entire life cycle, or one positive aspect is 'cherry-picked', the claim is likely to be problematic.

Example "shifting the environmental impact"

A company advertises that a product has low water consumption, but at the same time far more energy is used than is the case with comparable products. In total, the environmental impact is significantly increased, which means the advertised advantage is misleading.

Will the 'green objective' only be achieved in the future?

Describe statements about future objectives as clearly and concretely as possible. The defined strategies and objectives as well as the likelihood of achieving them should be verifiable. Avoid advertising vague and unattainable objectives.

Are you comparing 'apples and oranges'?

When making comparisons with other products or companies, make sure that there is no risk of misunderstanding. Explicitly state what the product or company is being compared to. Also check whether what is being compared is really comparable.  In other words, don't compare apples with oranges.

Example "recycled material"

The claim that a garment is made of "10% more recycled materials" is misleading. It is unclear whether the comparison refers to a previous version or a competitor's garment. You need to be explicit, for example: "The garment contains 10% more recycled materials than model xy".

Is the green claim actually about something inherent or 'matter of course'?

If a product must fulfil a requirement due to a legal provision, this requirement may not be emphasised as a special feature in advertising. Statements about general features which the product usually fulfils anyway are also considered 'matter of course'. Only those advantages which constitute an improvement in comparison to a considerable number of similar products should be advertised.

Example " CFC-free"

A company advertises a spray as "CFC-free" although the use of CFCs is generally prohibited and therefore all sprays must be CFC-free. This legal prohibition must be expressed in the claim: "CFC-free, as required by law".

Think about the legal consequences of making misleading green claims

Greenwashing can have a variety of legal consequences in addition to (considerable) financial penalties, including:

  • action for injunction
  • banning of 'greenwashing' ads (for example, pasting over posters with inadmissible claims)
  • claims for damages
  • reputational damage
  • special laws may provide for administrative penalties

Keeping these at the forefront will help the business avoid taking unnecessary risks.

Making green claims in advertising is a complex area.  Please get in touch if you need further advice.

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