Preventing Stakeholders From Ruining Your Sustainability Efforts
7 min
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In this article, we’ll review why stakeholders are important, how they could impact your company’s sustainability efforts, and how to prevent them from doing so.
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ESG / CSR
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Complying with the Advertising Standards Authority (ASA) rules
Level
In February 2023, CAP (Committee of Advertising Practice) and BCAP (the broadcasting equivalent) published updates to their advertising guidance called ‘The Environment: misleading claims and social responsibility in advertising'. This consolidates the ASA's (Advertising Standards Authority) position on misleading environmental claims and provides specific direction on the use of net zero and carbon neutral statements in advertising.
👉 In this article we'll look at what the updated ASA advertising guidance means for companies advertising in the UK when it comes to environmental claims.
What is the ASA?
The Advertising Standards Authority (ASA) is the UK's independent regulator. It has been in operation since 1962 and aims to enforce the Advertising Standards Code, also known as the CAP (Committee of Advertising Practice) code, which covers areas such as environmental claims, direct marketing, and sales promotions. The ASA also takes action against ads that risk causing serious or widespread offense.
The advertising codes of practice are called the CAP and BCAP codes - the BCAP code is simply the equivalent of the CAP code but for broadcast adverts. Supporting guidance is also published alongside the codes, which helps advertisers to interpret the regulations.
“ It is the ASA’s responsibility not only to enforce the content of these codes, but also to respond to concerns and complaints from businesses and consumers, and to ensure that misleading, harmful or offensive adverts are banned. ”
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What’s the problem with the old guidance?
Environmental claims and terms such as carbon neutral and net zero are increasingly used by businesses to advertise how their products or services are helping to meet climate targets. Such terms can strongly influence consumers when purchasing a good or service and so they have huge potential to unfairly mislead consumers when used incorrectly (this is known as greenwashing).
👉 Greenwashing is a term used to describe the situation where a company makes environmental claims for marketing purposes without actually having any evidence to substantiate the claim.
“ However, since there are no definitions set in UK law governing the basis of such claims, and since many environmental claims are based on complex issues lying outside the assessment capabilities of the ASA (for example the validity of carbon offsetting schemes), it can be difficult to police. ”
ASA green claims review
Recognizing the issues surrounding environmental claims, in 2021 the UK Advertising Standards Authority (ASA) undertook research into the UK public's understanding of such claims. One of the focuses of this research was to better understand the average UK consumer's understanding of ‘carbon neutral' and ‘net zero' claims in advertising.
Carbon neutral and net zero are terms that are increasingly used in advertising, and attached to these terms is the risk that consumers are misled. The ASA's research identified the following key findings:
- The spectrum is broad when it comes to UK consumer engagement and understanding of environmental issues and claims.
- Carbon neutral and net zero are the most frequently encountered terms in advertising, however, they are also two of the terms with the least consensus when it comes to meaning. Significant reform is needed to simplify and standardize their definitions, and a body to oversee their use is also advised.
- Consumers generally took carbon neutral claims to mean an absolute reduction in carbon emissions. Many consumers were therefore left feeling misled when they learned of carbon offsetting claims relating to the same service or good.
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The meaning of net zero and carbon neutrality
Net zero is considered to be the gold standard when it comes to reducing our environmental footprint. It means that all greenhouse gas emissions are reduced to ensure that the amount of greenhouse gas emissions is equal to the amount being removed from the atmosphere. It requires that any emissions that cannot be reduced are offset somehow.
Carbon neutrality, on the other hand, means that carbon emissions released into the atmosphere by a company's activities are balanced by an equivalent amount of emissions being removed. This balancing practice is known as carbon offsetting and can involve practices such as planting trees, investing in renewable energy etc. It should be noted that carbon neutrality only accounts for carbon emissions, not other greenhouse gases.
CMA guidance - what's this?
The CMA (ie. the UK's Competition and Markets Authority) released guidance on environmental claims on goods and services in September 2021. This was in response to their investigation on the impact of ‘green marketing' on consumers.
Their findings revealed that nearly 40% of online green claims were misleading. This was on account of the use of vague terms such as ‘eco', ‘sustainable', and ‘natural', often used across online media without anything to substantiate the terms.
Other areas of concern that were identified included the use of unofficial logos giving the impression that the brand or the product was officially accredited, and hiding information to appear more environmentally friendly.
In response to these issues, the CMA laid out six principles that businesses should follow when it comes to environmental claims. These are:
- Be truthful and accurate
- Be clear and unambiguous
- Avoid hiding or omitting material information
- Make fair and meaningful comparisons
- Consider the full life cycle of the product
- Substantiate claims
This guidance on environmental claims on goods and services was also considered and reflected in the ASA's updated advertising guidance.
What is the updated ASA guidance?
The Advertising Standards Authority (ASA) published updated guidance in February 2023 in response to its earlier findings regarding the use of environmental, sustainability, carbon neutral, net zero, greenwashing claims, and sales promotions in advertising. The guidance (The environment: misleading claims and social responsibility in advertising) incorporates advice on the use of the terms carbon neutral and net zero and also reflects key principles of the CMS's guidance on environmental claims.
CAP and BCAP ask advertisers to take into account the following principles:
- Avoid the use of unsubstantiated claims such as carbon neutral or net zero. Where they are used, advertisers should include information explaining the basis for these claims so that consumers can easily understand what they mean.
- Marketing material should include accurate information when it comes to claims of carbon offsetting (ie. the degree to which they are reducing carbon emissions). This will help avoid misleading consumers who may wrongly believe that products or services don't produce any emissions.
- Any claims that relate to future ambitions (eg. reaching net zero or reaching carbon neutrality), must be built on a verifiable strategy of delivery.
- Any carbon offsetting claims must comply with standards of evidence and advertisers must also provide details on the carbon offsetting scheme they are using.
- Where claims include qualifying information, this must be relevant and easy for consumers to see and understand before they make any purchasing decision.
In terms of the level of substantiation required, where there are differing scientific opinions or inconclusive evidence, this should be made clear to consumers. What ‘significant substantiation' means according to the guidance is that ‘marketers must be convinced that the relevant informed opinion is not divided'.
Other points that advertisers must consider when it comes to ‘green advertising' include that comparator environmental claims (ie. greener, friendlier) will require evidence proving that the product or service results in an environmental benefit over comparable products or services. This information should be included in the advert, otherwise, it must be clearly signposted where consumers can find this information.
Marketers must also ensure that any general claims apply to the entire lifecycle of the product (unless expressly qualified), from manufacture through to disposal. Examples of full lifecycle claims include ‘good for the planet', ‘helping to support a more sustainable future', ‘100% eco-friendly', ‘good for the land', ‘environmentally friendly', ‘zero emissions', ‘gives back to the environment', ‘less plastic'.
Marketers may make an environmental claim relating to only part of a service or product's lifecycle, however, this should be expressed clearly. For example, in the case of an electric car, a zero-emissions claim may be permitted where the advert makes it clear that this relates to driving only. What's crucial is that advertisements must not mislead consumers about the environmental benefits of a product or service.
Key principles of ASA guidance:
The table below provides a quick overview of the key requirements for environmental claims in advertising:
| Requirement | Explanation | Example |
|---|---|---|
| Substantiation of claims | Claims must be backed by evidence to avoid misleading consumers. | Providing data to support 'carbon neutral' or 'net zero.' |
| Clear qualifying information | Any conditions or limitations must be clearly stated. | Indicating that 'zero emissions' applies only to driving. |
| Transparency on offsetting | Details on carbon offset schemes must be provided, including standards used. | Naming the scheme and explaining how offsets are achieved. |
| Full lifecycle considerations | Claims about sustainability should cover the entire lifecycle unless stated otherwise. | '100% eco-friendly' should include production and disposal. |
| Comparisons with competitors | Comparative claims must be fair and based on clear, factual evidence. | Stating a product is 'greener' based on lifecycle analysis. |
ASA updates
Since the publication of the updated ASA guidance in February 2023, there have been significant developments in the regulation of environmental claims in advertising:
June 2023 update
The Committees of Advertising Practice (CAP) and Broadcast Committee of Advertising Practice (BCAP) released an updated version of their guidance, introducing a new section titled "Claims about initiatives designed to reduce environmental impact". This addition emphasizes that environmental claims about specific products should clearly indicate they are not representative of the company's overall environmental impact. It also advises that companies known for significant environmental harm should provide contextual information about their broader environmental impact when promoting positive environmental initiatives.
November 2023 update
CAP and BCAP further updated their guidance to address "green disposal" claims, such as "recyclable", "biodegradable", and "compostable". The revised guidance underscores the necessity for advertisers to substantiate these claims and to provide clear information regarding:
- The specific parts of a product the claim pertains to.
- The disposal process, especially if it deviates from typical consumer expectations.
- The time required for a product to fully biodegrade or compost.
- Any harmful by-products produced during the disposal process.
The ASA announced that starting January 2024, it would intensify monitoring and enforcement actions against misleading "green disposal" claims, with a focus on unqualified claims and insufficient substantiation.
April 2024 insights
The ASA published findings from its research into environmental claims in food advertising, particularly concerning meat, dairy, and plant-based alternatives. The research revealed that broad claims like "good for the planet" are often accepted at face value by consumers but can be misleading without proper substantiation. The ASA plans to continue monitoring and engaging with stakeholders to ensure compliance, especially regarding unqualified sustainability and comparative environmental impact claims.
The use of AI
In 2024, the ASA, under the leadership of Chief Executive Guy Parker, began leveraging artificial intelligence (AI) to enhance its ability to monitor and regulate misleading environmental claims in advertising. By using AI tools, the ASA can efficiently scan millions of ads to identify unsubstantiated claims like ‘carbon neutral’ or ‘recyclable’. Parker has emphasized that this proactive approach ensures companies remain accountable for the accuracy of their environmental messaging while tackling greenwashing at scale.
Looking forward
The ASA remains committed to scrutinizing environmental claims across various sectors to prevent greenwashing. Advertisers are urged to ensure their claims are transparent, substantiated, and provide a comprehensive view of their products' environmental impacts. The ASA's proactive approach includes ongoing monitoring, stakeholder engagement, and the development of further guidance to assist advertisers in aligning with regulatory expectations.
Since the initial guidance in February 2023, the ASA, CAP, and BCAP have continued to refine and enforce standards related to environmental claims in advertising, emphasizing the importance of clarity, substantiation, and transparency to protect consumers from misleading information.
“ Concerns around greenwashing and misleading environmental claims are gaining traction, causing regulators to tighten up when it comes to the rules surrounding green marketing. Advertisers and marketers need to make sure that they're aware of the updated guidance to ensure that they don't fall foul of the rules. ”
What about Greenly?
At Greenly, we specialize in helping businesses reduce their environmental impact through actionable carbon management solutions. Our services are designed to provide you with the tools and insights needed to make meaningful progress toward your sustainability goals.
Our services include:
Comprehensive carbon footprint assessments:
Understand your Scope 1, 2, and 3 emissions with detailed insights.
Tailored decarbonization strategies:
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Lifecycle assessments (LCA):
Analyze the environmental impact of your products or services from start to finish.
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Ready to learn more? Get in touch with one of our experts today and start your journey toward a more sustainable future.
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