Consumers are increasingly conscious of the impact their purchases have on the environment and are paying more attention to what a brand says it does to mitigate environmental impact. With brands keen to respond to that consumer demand by advertising their eco-credentials there is a risk that, through certain advertising practices, consumers are encouraged to make their purchasing choices based on unclear, incomplete or exaggerated information.
Recent ASA research has examined the way in which consumers understand brands' environmental claims.
While the ASA has regulated environmental claims for some time, bolder government climate targets prompted the ASA to re-examine its approach to advertising practices. The "Climate Change and Environment" project was launched by the ASA in September 2021 and sought to measure, among other things, consumers' perception of "carbon neutral" and "net zero" claims. The ASA has now published its key findings.
"Carbon Neutral" and "Net Zero" claims
The ASA found that, because of differing levels of consumer engagement with environmental issues, there are also differing levels of understanding of green terminology, which can lead to confusion.
While "carbon neutral" and "net zero" were the most familiar terms to consumers, the ASA identified a lack of consensus as to what these terms mean, or how they could be substantiated, with those surveyed perceiving the terms as being used interchangeably. In addition, the ASA identified a false perception that both these claims relate to a direct reduction in carbon emissions whereas, typically, these terms relate to a brand's reliance on offsetting (either wholly or partially). As a result, the ASA has concluded that these terms need to be defined and standardised.
This tracks the view of the Competition and Markets Authority which provided the government with environmental sustainability advice in March 2022 that included a recommendation to create statutory definitions of commonly used environmental terms – including "carbon neutral".
The ASA has stated that it will be updating its existing Advertising Guidance to reinforce the need for brands to be clear about, and adequately explain, the basis on which their green claims are made, even where the advertising might be constrained by space or time.
In the meantime, we are likely to see a further crack-down on ads which make unqualified or unsubstantiated "carbon neutral" or "net zero" claims.
Notable for brands is the effect these claims have on consumer trust and brand reputation.
The ASA's research found that consumers are increasingly sceptical about environmental claims, particularly those which present no substantiating evidence, creating a negative perception of "virtue-signalling" or "greenwashing". Consumers want greater transparency on eco-credentials.
As issues surrounding climate change grow further in the public consciousness, brands will face the emerging reality that the green language they use in their ads and other marketing communications is subject to increased scrutiny and regulation.