ASA guidance on “Carbon Neutral” and “Net Zero” as part of a greenwashing crackdown

What does CAP’s updated advertising guidance mean for businesses who wish to use green claims in marketing materials?

The question

What does CAP’s updated advertising guidance mean for businesses who wish to use green claims in marketing materials? 

The key takeaway

Advertisers must be mindful of using the claims “carbon neutral” and “net zero” as well as consider their social responsibility when it comes to using green claims as part of their marketing materials. Transparency and clarity for consumers is key. 

The background

In 2021, the ASA’s Climate Change and the Environment project identified that the general understanding of certain advertising claims, including “carbon neutral” and “net zero” by consumers was an area requiring further understanding. This was against the backdrop of increased use by businesses of these claims as part of their marketing materials. The research found that:

• there is significant consumer engagement on environmental issues, affecting their understanding of, and reaction to, environmental claims
• “carbon neutral” and “net zero” were the most commonly encountered claims, but there was little consensus as to their meaning. There were calls for significant reform to simplify and standardise the definitions of such terms and for claims to be policed by an official body, such as government
• participants tended to believe that carbon neutral claims implied that an absolute reduction in carbon emissions had taken place or would take place. When the potential role of offsetting in claims was revealed, this could result in consumers feeling that they had been misled
• claims in air travel, energy and automotive advertising tended to attract more attention, and the potential role of offsetting, when revealed, could result in greater disappointment. Participant reactions suggested the need for transparency is potentially greater in those sectors, and 
• participants called for more transparency about offsetting and target dates in ads.

The development

Based on the outcome of the research which identified a generally low understanding around the meaning of “carbon neutral” and “net zero” amongst consumers, the ASA released updated guidance for marketers on 10 February 2023. The guidance takes into account the core principles of the relevant Competition and Markets Authority (CMA) guidance. The updated guidance can be summarised as follows: 

• marketers must avoid using unqualified carbon neutral, net zero or similar claims and information explaining the basis for these claims must be included
• marketers should ensure that they include accurate information about whether they are actively reducing carbon emissions or are basing claims on offsetting, to ensure that consumers do not wrongly assume that products or their production generate no or little 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 and details of this strategy should be easily accessible
• where claims are based on offsetting, they should comply with the usual standards of substantiation for objective claims and marketers should provide information about the offsetting scheme they are using, and
• 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 take it into account 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 consumers. 

The ASA will conduct monitoring for up to six months and also gather information to assess how claims are being substantiated. 

Why is this important?

This new guidance forms the basis of the regulatory crackdown on greenwashing. Under the plans, the ASA will take a strict enforcement approach against any businesses that mislead consumers regarding the effectiveness of their products in helping stop climate change - unless they can actually demonstrate that they really are effective. Recent ASA rulings against Shell, Petronas and Repsol SA highlight the ASA’s zero tolerance approach to greenwashing, particularly with regard to the use of “net zero”. In each of these cases, the ASA challenged whether the ads exaggerated the total environmental benefit of the products which therefore rendered the ads misleading. 

Any practical tips?

The ASA guidance shows that transparency and clarity is key when making these types of green claims. Consider sharing the guidance with the marketing team if your business is looking at making green or sustainability claims based on carbon offsetting.

Summer 2023