The Committee of Advertising Practice (“CAP”) and the Code of Broadcasting Advertising (“BCAP”) have published an update to their guidance around the use of carbon neutral and net zero claims in advertising. This comes after a statement by the ASA last year that this area (along with hybrid claims in the electric vehicle market) would be a priority given the prevalence of such claims and the risk of misleading consumers.

A research report published by the ASA in October 2022 found that when it comes to carbon neutral and net zero claims, consumer understanding is low and there is generally a lack of consensus about what these claims mean. In light of these findings, the ASA have issued this update, which sets out the following advice for advertisers in the guidance:

• unqualified carbon neutral, net zero or similar claims should be avoided, as they are likely to mislead consumers. Information explaining the basis for these claims helps consumers’ understanding and should not be omitted from advertising. Examples of such information include clarifications on whether cited environmental benefits are dependent on specific consumer action or behavioural change, inclusion of sufficient information regarding any standards which are referenced and explanations of any limitations on claims;
• marketers should ensure that they include accurate information about whether (and the degree to which) they are actively reducing carbon emissions or are basing claims on offsetting to ensure that consumers do not wrongly assume that products or their manufacture generate no or few emissions;
• claims based on future goals relating to reaching net zero or achieving carbon neutrality should be based on a verifiable strategy to deliver them, for example stating “estimated output” or by making the output claim conditional;
• where claims are based on offsetting, they should comply with the usual standards of evidence for objective claims set out in the guidance and marketers should provide information on their offsetting schemes;
• where it is necessary to include qualifying information about a claim, that information should be sufficiently close to the main aspects of the claim for consumers to be able to see it easily and consider it before they make any decision; the less prominent any qualifying information is and the further away it is from any main claim being made, the more likely the claim will mislead further information on qualifications can be found in the CAP guidance).

The updated guidance also incorporates the CMA’s guidance on environmental claims for goods and services, which was published in September 2021.

The ASA has said it will monitor the impact of the updated guidance on advertising for up to six months, during which it will gather information to assess how claims are being verified by advertisers. If it turns out to be the case that carbon neutral and net zero claims are largely being made without sufficient evidence to back them up, the ASA will proceed to launch a further review.  

In the meantime, any advertisers who are found to be making ‘unqualified claims’ (the ASA has already identified those who are currently doing so) will face action by the ASA, which includes the right to publish the non-compliant companies’ details on its website until they comply, placing advertisements to highlight non-compliance, working with social media and search engines to remove content and asking other ASA members to “revoke, withdraw or temporarily withhold recognition and trading privileges”.

Impact on businesses

With the regulatory spotlight on carbon neutral and net zero claims, it is likely that there will be a surge in enforcement action against non-compliant companies to prevent greenwashing. Businesses should therefore be very careful when using environmental claims as part of their advertising and should be taking a proactive approach to avoid any potential negative consequences of non-compliance (e.g. damage to reputation and credibility, loss of trust from existing and potential customers and threat of legal claims).

The updated guidance emphasises the importance of ensuring accuracy and transparency in environmental claims, particularly in the context of advertising. As a result, businesses should review their existing advertising material containing claims of carbon neutrality and net zero and assess whether these need to be amended in light of the guidance. They should also evaluate their advertising strategy going forward. This means having a clear understanding of what the terms ‘carbon neutral’ and ‘net zero’ mean, making sure that any claims are backed up by concrete evidence and ensuring that any information provided is clear and sufficient for consumers to understand (alternatively, including clearly accessible resources for consumers to consult).  

If you would like to discuss how the updated guidance affects your business please contact Amanda Leiu or another member of our Commercial team.