Greenwashing: New rules clarify the boundaries for when you can call something green

In this article, DreistStorgaard’s business team reviews the Danish rules on when a company is guilty of greenwashing . Today, many companies make a point of telling what they do in the ESG area, but you have to be careful that you don’t communicate something that actually goes against the rules of proper marketing. The problem is that some companies make themselves out to be greener than they really are, and are thus guilty of greenwashing .

The new “quick guide” from the Consumer Ombudsman

This is the focus area of ​​the new guidelines, a so-called “Quick Guide”, which the Consumer Ombudsman has come up with [1] .

At the same time, the Consumer Ombudsman is given more money; 7 million per year in the period 2022-2025, to combat illegal greenwashing.

When companies communicate to the outside world, it is seen more and more often that they use words such as “environmentally friendly”, “we focus on reducing CO2” and “we are sustainable”. This gives the recipients the impression that they are dealing with a “green” company. But when are you really so “green” that you have to say so?

The rules on misleading marketing

The rules on misleading marketing are set out in §§ 5-6 of the Marketing Act and in § 13 [2] , and generally it follows that climate and environmental statements that are used in a marketing context (i) must be correct; (ii) must be clearly worded and (iii) must not omit material information.

Not only that, you must also be able to document statements about facts, which means that such statements must be able to be investigated and either substantiated by statements from or confirmed by independent experts [3] . The Consumer Ombudsman distinguishes between ” general ” and ” specific ” statements, and the way in which the two types of statements must be handled are different.

General environmental statements

General statements are positive statements such as “green”, “climate friendly”, “environmentally friendly” and “sustainable” – and often give the impression that there is a positive environmental effect. As the Consumer Ombudsman says, ” all production will affect the environment/climate, it is therefore basically misleading to use this type of statement in marketing “. As a company, you may therefore only use these general statements in very special cases.

The following criteria have been set in relation to the use of the general environmental statements:

1. The product referred to must belong to the absolute best on the market . If several products are equally good, none may be mentioned in positive terms in relation to having an environmental profile.
2. In continuation of section 1 it must be able to be documented that the product generally burdens the climate or the environment significantly less than similar products.
3. The requirement for the documentation is that it must be based on a life cycle analysis [4] of the product and can be supported by opinions or studies from independent experts.
4. If your product has obtained an official labeling scheme [5] , this may be called “more environmentally friendly”, “better for the environment” or the like without a life cycle analysis being carried out.

When using general statements, where there is also information about a specific environmental benefit of a product which explains the general part of the statement, a life cycle analysis is not necessary if it is ensured that the general part of the statement is read together with the explanation. However, a number of additional requirements are made in these situations, including that:

1. The environmental benefit must not only have marginal importance for the environment.
2. The environmental benefit must not have resulted from activities that in themselves damage the environment.
3. The climate or environmental benefit of the product must not be significantly reduced by environmentally harmful aspects of the product [6] .
4. It must be a distinct environmental benefit that is not usually found in similar products.

Concrete statements

Strictly specific statements are a little easier to use, as neutral and concrete information about a product or company given in an objective manner, without emphasizing environmental or ethical considerations, will not normally be considered suitable to mislead consumers.

But here, too, there are limits that you must be very aware of. If a product only meets environmental requirements, this must not be communicated as an environmental benefit.

You must also remember to continuously assess the statements that have been circulated, and update these if they are no longer correct. It can, for example, happen due to technological breakthroughs, which mean that a product that was previously very environmentally friendly is no longer so.

Communication on carbon footprint reduction

Many companies are working to reduce their CO2 footprint, and when communicating about this, it requires special attention to stay within the framework that the Consumer Ombudsman has now set out:

1. You can only say that you are trying to reduce your carbon footprint if this is expressed in the adoption of a concrete plan that has been verified by an independent third party.
2. You must produce green accounts that account for achieved and future reductions, and you cannot use historical reductions in this connection.
3. You can only say that you are carbon neutral if your emissions are zero .
4. If compensation mechanisms are used, this must be explained in precise terms and these must be verified by independent third parties.

When can you call yourself sustainable?

One term in particular is often used in communication, the word “sustainable”.

In the Brundtland report from 1987, which bears the title “Our Common Future”, sustainability is defined as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs “.

According to the Consumer Ombudsman’s statement, it will be very difficult – without misleading – to call oneself or a product sustainable.

The rule is that a sustainability claim must be based on a comprehensive life cycle analysis that – when health, social and ethical issues are also taken into account – shows that the company does not impair the ability of future generations to meet their needs.

If you want to communicate that you strive for sustainability, it must be done on the basis of a concrete plan [7] , which must be verified by an independent body. If you write that you have made sustainable initiatives, you must specify which initiatives [8] are involved.

The Consumer Ombudsman has also emphasized that “sustainability” cannot be changed. It is an absolute term, and thus something cannot be e.g. “more sustainable”.

The Consumer Ombudsman has thus clearly set its sights on the companies, and has thus in December 2022 tightened the marketing ban on misleading. This was expressed, among other things, when the Consumer Ombudsman completed five cases and in all the cases came to the conclusion that ” they have marketed their products as sustainable without being able to document the claim ” [9]

Use of “green images”

If you use “green” images in your communication[10] or slogans, one must also tread carefully. You may only use images and the like in your marketing when it portrays a correct image. And you must be able to substantiate the “green” communication[11].

The inclusion of e.g. “green” in a company name also requires that you have a very special profile that is differently good for the environment than other similar companies.

---

Conclusion

In DreistStorgaard’s business team, we experience that more and more of our clients are working with initiatives that should result in more sustainable business operations – and that, as a natural extension of this, you want to communicate about what you do and what results you achieve.

When getting started with this kind of communication, there is good help to be found in the Consumer Ombudsman’s new ” Quick Guide “, which in addition to the general guidance also contains a number of concrete examples of when something is within or outside the ” scope “.

Violation of the rules can not only result in fines, but also significant damage to a company’s reputation, as one of the tools that the Consumer Ombudsman has in his bag is to publish decisions about companies that have been guilty of greenwashing.

The gift stick effect and resulting consumer activism can be costly both in terms of lost revenue and, more and more often, in relation to the recruitment and retention of employees.

We can contribute with the following practical advice when you need to communicate about what you do in relation to sustainability:

• Do what you say and don’t make yourself greener than you actually are .
• Tell us honestly about the measures you take and please about concrete things you do and concrete effects you achieve, when this can be substantiated.
• Remember that you must not mislead and, for example, omit important information and must not quote an expert who supports you, without mentioning others who have a different opinion.
• If your product is not better environmentally than other products, you have to be careful with what you communicate.
• You must not communicate that you are “green”, “climate-friendly” or the like if you only meet environmental requirements .
• There are very special requirements for communication where the word “sustainable” is used
• Be careful where what you do only has a marginal environmental effect – it may then be forbidden to communicate.
• Remember that impact measurements must be based on a life cycle analysis, where environmental effects “from cradle to grave” must be taken into account .
• If you are in a particularly polluting industry , it may be completely out of the question for you to communicate using “environmentally positive statements”.
• Remember that special rules may apply for marketing aimed at special groups (e.g. children) or dealing with special products or services (e.g. gambling and alcohol)

If you need advice, you can contact us on phone 5663 4466 or send an email to kontakt@dslaw.dk.

---

[1] https://www.forbrugerombudsmanden.dk/media/56731/kvikguide-om-miljoemarkedsfoering.pdf

[2] Violation of the rules of the Marketing Act can be punished with a fine.

[3] If there is disagreement between experts, this must also be disclosed.

[4] In a life cycle analysis, the (environmental) conditions are mapped and the significant (environmental) impacts are assessed throughout the product’s life cycle from the acquisition of raw materials and the manufacture, use and disposal of the product as well as transport within and between these phases.

[5] E.g. “Swan label” or “EU flower”

[6] Which effectively excludes particularly polluting industries from using this kind of communication.

[7] The plan must result in the product etc. continuously improved/developed so that the load is gradually reduced, which must be measurable. An implementation of the plan must be initiated or immediately imminent.

[8] And the measures must of course concretely promote sustainability, for example the promotion of biodiversity or the choice of materials that consume less of the Earth’s resources

[9] https://www.forbrugerombudsmanden.dk/nyheder/forbrugerombudsmanden/pressemädelingen/2022/virksomgerer-kaldte-produkter-baeredygdigge-uden-at-kunne-dokumentere-det/

[10] For example, the use of flowers, green fields, clean water, wind turbines, forests, animals, etc.

[11] The Consumer Ombudsman cites an example with a case of a soda bottle that was partly made from plant material and was marketed with the statement “100% reusable bottle”. The statement was objectively correct, but because the statement was supplemented by a picture of the bottle, where plants, farms, windmills, animals etc. appeared. out, the marketing gave consumers the impression that it was a special environmental advantage that the bottle was 100 per cent reusable. Since all bottles – even those that were not partially based on plant material – were 100 per cent. reusable, the statement was misleading.