Green Claims and Greenwashing in the EU: Strict Approach of the Danish Consumer Ombudsman
The Danish Consumer Ombudsman is setting the bar high in terms of documentation for green claims, and the risk of greenwashing accusations is substantial. Claus Barrett Christiansen, partner at Bech-Bruun and expert in intellectual property and marketing law, comments on the latest developments within green marketing practices.
Launching green marketing claims in Denmark comes with a high risk due to the strict approach embraced by the Danish Consumer Ombudsman (the term Ombudsman being used as it is stipulated in the relevant legislation even though the present Consumer Ombudsman is a woman).
"Launching green marketing claims in Denmark comes with a high risk."
The Danish Marketing Practices Act forms the overall legal framework when the Consumer Ombudsman decides whether green marketing claims are misleading. The sanctions for violations of Danish Marketing Practices such as misleading claims or omissions have a very wide scope ranging from fines and even prison sentences to a request for corrections of the misleading claim. In addition, all decisions handed down by the Consumer Ombudsman will be published in a press release, and most media in the Nordics are very attentive to press releases from the Consumer Ombudsman. Often, very negative exposure is initiated by such press releases, which, in combination with the Consumer Ombudsman’s strong reputation amongst the general public and NGOs, creates a media situation that is difficult to control.
The Danish Consumer Ombudsman has more than 100 greenwashing cases pending annually, which is a surprisingly high number taking into consideration that Denmark is a small jurisdiction. In quite a few cases, multinationals have experienced that the Danish Consumer Ombudsman is the only authority in all 27 EU Member States who will initiate proceedings against EU-wide green claim campaigns. Not because more detriment is being caused on Danish territory but simply because the Danish Consumer Ombudsman has a stricter approach and takes up more cases than most of her European colleagues.
It is therefore often necessary to consider compliance with the Danish Consumer Ombudsman’s green claim standards and guidelines when launching EU-wide green claims campaigns. Complying with such standards would most often provide a high level of assurance and legal certainty that no other EU marketing authorities will object to the campaign. In general, all the decisions on green claims from the Danish Consumer Ombudsman are based on the EU-harmonised prohibition against the use of misleading claims, and thus, the interpretation of the Consumer Ombudsman should often have EU-wide effect.
Generic and general green claims must be accompanied by a lifecycle analysis
Traders who rely on general or generic green claims such as “sustainable”, “environment friendly” or “less carbon emission”, must be able to demonstrate a lifecycle analysis, documenting such claims. A lifecycle analysis must include all phases from cradle to grave, including inter alia disposal, and it must be verified by independent third-party experts. If any environmentally positive attributes are contravened by attributes detrimental to the environment, claims of environmental friendliness are prohibited. Further, the Consumer Ombudsman has de facto issued a general per se prohibition against using terms such as “sustainable”, as the Consumer Ombudsman relies on the sustainability definition in the Brundtland Report 1987. Consequently, the use of terms like “sustainable” in marketing claims will almost certainly lead to fines being imposed.
Also, if a trader uses green imagery or colours, or environmentally friendly footage to promote products or services, the Consumer Ombudsman may perceive such imagery as separate green claims which must be documented and substantiated in order for the marketing to be compliant with the Danish Marketing Practices Act.
Advertising future environmental targets and aspirations
Most corporates have environmental goals for future achievements. Aspiring to achieve great things in the future is often easier than delivering on short-term goals. The Consumer Ombudsman has quite a strict approach to advertising future aspirations or goals, which require a detailed plan for how they will be achieved, and such plans must be verified by independent third-party experts.
Focusing on – and advertising – one or more of the 17 Global Compact Sustainable Development Goals as being a particular corporate focus would require documentation that special efforts are exercised in relation thereto, and a plan for achieving the goals must be readily available at the time of launching the advertising claims.
Even the use of trade marks could constitute greenwashing
In both national trade mark registers and the EU trade mark register at the EUIPO, there are numerous trade marks encompassing what could be considered free-standing unsubstantiated green claims such as “Green”, “Eco” or similar words.
Until now, there has been relatively little attention paid to such trademarks in terms of alleged greenwashing, but this is likely to change. Proposals for the Empowering Consumers for the Green Transition Directive and the Green Claims Directive would affect the use of trademarks consisting in whole or in part of words such as “Green”, “Eco” or similar which could affect the often-substantial investments corporates have made into such trade marks, building up goodwill during years of advertising and building consumer confidence and affiliation in the trade marks.
It is still unclear how the Danish Consumer Ombudsman and consumer authorities in the EU will approach green claim trade marks if, for example, the trade marks have acquired a secondary meaning bringing them beyond any scope of being misleading. Already, many corporates are phasing out trade marks encompassing such word elements as “responsible”, “green” and “cautious” to prepare themselves for an even stricter green claims regime in the EU. Replacing trade marks is no easy task; it takes years of hard work and substantial investments and therefore it is highly recommended to tackle the issues with such green claim trade marks upfront, instead of awaiting reactions from the Danish Consumer Ombudsman or similar authorities in other EU jurisdictions.
How to prepare
There is no doubt that the EU Commission will continue to strengthen ESG regulation as part of achieving the goals set out in the EU Commission’s ambitious Green Deal plan, and ESG regulation will continue to affect and limit commercial freedom of expression and restrict green claims. Meanwhile, the sanctions for greenwashing increasingly intervene.
Although the basic framework for marketing regulation is EU harmonised, securing compliance for green claims can be both expensive and time-consuming for corporates wanting to communicate their marketing claims in all of Europe’s 27 Member States due to the significant differences in implementation and enforcement in Member States. Securing green claim compliance in Denmark as one of the toughest EU regimes in terms of enforcement and interpretation of ESG and green claim regulation is therefore a good starting point for one-stop-shop compliance in the EU.