We’re seeing more « eco-friendly » and « all-natural » products on our shelves, as consumers demand more sustainable options.
But with companies under increasing pressure to meet their ESG goals, how do we know if some are changing the truth?
When their sustainable claims are incorrect or exaggerated, they can be accused of « greenwashing ».
Essentially, this means that they mislead consumers into believing that their products or services are – or that the business itself is sustainable, when that is not the case.
Are there laws to protect consumers from green washing?
There are no laws in Ireland that specifically challenge greenwashing.
However, there are more general consumer protections, such as the 2007 Consumer Protection Act (CPA), explained Victor Timon, partner at law firm Louis Silken.
« Under the CPA, a seller must not make false claims about any goods or services it sells, » he said.
The CPA now also incorporates the EU Directive on Unfair Trade Practices as part of this legislation.
« Under the guidance, business practice is considered unfair if it is misleading and likely to distort your purchasing decision, » Timon noted.
The Sale of Goods and Supply of Services Act 1980 also includes the implicit term that the goods will conform to their description.
The Advertising Standards Authority of Ireland (ASAI) also sets the rules and makes decisions regarding false or misleading advertisements.
However, Timon noted that unlike its UK counterpart, it has no authority to implement those decisions.
What are the penalties for companies that engage in environmental washing?
The Competition and Consumer Protection Commission (CCPC) monitors consumer protection law in Ireland.
Mr Timon said the CCPC could issue notices of compliance, apply to court for prohibition orders against merchants to prevent certain practices, or eventually sue a merchant in court and ask a judge to impose a fine or even imprisonment in certain cases.
However, the CCPC does not get involved in individual cases between merchants and consumers, which Mr Timon said should be pursued by the consumer through the courts.
“The penalties stipulated in the CPA for summary sentences (lower courts) are up to 3,000 euros, imprisonment for six months, or both,” said Mr. Timon.
He added that « convictions (higher courts) amount to 60,000 euros, or imprisonment for 18 months, or both. »
What companies have been accused of green washing?
One of the most talked about cases is Volkswagen emissions scandal.
In 2015, the US Environmental Protection Agency found that many Volkswagen cars sold in America had been fitted with a « defeat device ».
Mr. Timon explained that this was essentially part of software in diesel engines that could detect when they were being tested, then alter performance to make the results look better.
“Volkswagen was making a big push to sell diesel cars in the US at the time.
« She later admitted the crime, which extended to car sales in Europe as well – and paid billions of dollars in damages and fines, » he said.
Separately, in 2020, the UK’s Advertising Standards Authority (ASA) upheld a complaint about Ryanair’s ad, which claimed the airline had the lowest carbon emissions in Europe.
The announcement stated that « Ryanair has the lowest carbon emissions of any major airline – 66 grams of CO2 per passenger kilometer. »
However, Mr. Timon explained that the comparison to other « major airlines » included only four others – and there is no industry definition of what counts as a « major airline ».
“Perhaps the nail in the coffin is that the numbers were based on efficiency ratings from 2011 — of little value to a proof claim in 2019,” he said.
In general, at the end of 2020, the European Commission and national consumer authorities conducted a survey campaign for websites across member states specifically targeting green washing.
In more than half of the cases, Timon said, the merchant did not provide enough information for consumers to judge the accuracy of the claim.
“In 37% of the cases, the claim included vague and generic terms such as ‘conscious’, ‘environmentally friendly’ and ‘sustainable,’ which are intended to convey an unfounded impression to consumers that the product has no negative impact on the environment, » explained Mr. Timon.
In 59% of the cases, he said, the merchant did not provide easily accessible evidence to support his claim.
In their overall assessment, they thought that in 42% of cases the allegations could be false or deceptive – and thus could amount to unfair business practice under the Unfair Trade Practices Directive.
Has any Irish company been fined after last year’s EU invasion?
Three merchants in Ireland have been contacted by the Competition and Consumer Protection Agency regarding their green claims after the EU sweep last year.
However, no penalties were issued.
A CCPC spokesperson said that in all three cases, the companies dealt with CCPC and provided the additional information requested.
As a result, the companies took a number of actions.
These included modifications to their websites and removal of errors related to product details.
They also modified their websites to provide clarifications and « additional proof » regarding environmental claims.
A CCPC spokesperson said they were satisfied with the actions taken by the merchants and did not see the need for enforcement action.
CCPC has not provided the name of the companies involved.
« Due to the nature of the CCPC’s enforcement role and ongoing market monitoring in this area, we are unable to provide any further details regarding the merchants involved, at this time, » the spokesperson said.
The spokesperson added that CCPC « regularly » participates in the European Consumer Protection Cooperation Network (CPC Network) campaigns, a set of market monitoring checks implemented by the CPC Network across Europe.
How can I identify companies that do the greenwashing process?
If you’re not sure if a company or brand’s « green claims » are true, a spokesperson for the Competition and Consumer Commission suggests you take a number of steps before you buy.
1 Look for evidence of the allegations
If you’re not sure about a brand’s « green claims, » do some quick research online or through social media to find out more.
Be wary of companies with vague or superficial references to sustainability.
Most original brands will want to share details of their ethical and sustainable approach to doing business, so instead, look for brands that have sections of their websites or social media pages, dedicated to identifying their « green credentials. »
2 Find the parent company
Although a particular brand or product may prove true in terms of its « green claims, » it is important to examine the bigger picture, including which parent company it may be owned or affiliated with.
Research the green parent company’s credentials and look at the overall sustainability lifecycle.
For example, a particular brand might use 90% recycled packaging materials, but what about other operations of the broader business group – such as manufacturing, logistics or material sourcing?
3 Don’t judge a brand by its packaging
Watch out for vague language such as « eco-friendly » or « all natural, » as well as « green » images that can be used to describe the product or brand as sustainable or ethical.
Don’t judge a brand by its packaging alone.
Make sure to read the ingredients list and check labels well before purchasing to make sure you are satisfied with the claims.
4 forged certificates
Look for fake « approved » seals or standards marks by organizations that may not even exist.
If you’re not sure about the certification seal, do some quick research to find out more before you buy.
Instead, look for certified seals such as EU Ecolabel, EU Organic Logo, Fair Trade Certified, and Rainforest Alliance Certified.
What should I do if I suspect a company is laundering the environment?
CCPC monitors consumer protection law compliance on an ongoing basis.
Law enforcement work relies on the information they obtain through a range of channels including; Contact our Consumer Helpline, Research, and Market Watch.
A CCPC spokesperson said: « If a consumer believes they have been misled about ‘green claims’, we ask that they contact us so we can help them address their issue. »
You can call the helpline at 01402 5555 or log on to ccpc.ie for more information.
Are stronger laws on the way to protect consumers?
With the increasing focus on sustainability, it is imperative that specific legislation dealing with green labeling is on the way.
In December 2019, the European Commission published the European Green Deal to address environmental challenges.
Mr Timon said this would lead to a regulation in the European Union requiring manufacturers to be able to prove any statements they make about sustainability, environmental friendliness or other « green » attributes of their products.
« The new regulation was expected this year – and is likely to come into force two years later, » he said.
This is expected to be followed by specific legislation to enable consumers to pursue greenwashing claims.
Meanwhile, on the general rights of consumers, Mr Timon said the ‘New Deal for Consumers’ published by the EU in 2018 contained GDP-type fines for violations of consumer law.
« Regulators such as CCPC will have the right to make trial purchases and evaluate products against the manufacturer or seller’s claims about their performance – including any green credentials, » he said.
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