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In Denmark, the green transition is a highly topical issue that is becoming increasingly important for both large and small companies. Showing consumers that your products and services are sustainable has therefore become an important competitive parameter. However, in recent years there have been situations where companies have claimed that their products are more sustainable than they actually are. This phenomenon is known as ‘greenwashing’ and refers to companies ‘greenwashing’ products that are not environmentally friendly.
It is not straightforward to market your products or services as sustainable, as there are a number of obligations involved, especially under the Danish Marketing Practices Act.
It is an obligation to use terms such as ‘carbon neutral’, ‘sustainable’, ‘climate friendly’ and ‘environmentally friendly’ in your marketing.
Firstly, these claims must be accurate and even clear and precise enough for consumers to understand them immediately.
Secondly, the claims need to be documented. This means that the company must be able to prove that it actually lives up to the claim.
In other words, companies must not give the false impression that they or their products are particularly “green”. If this happens, it is called “greenwashing”.
Greenwashing comes in different forms and at different levels. It can be at product level, in relation to individual products/materials and their origin. It can be the marketing of the whole company as being greener than other companies. Companies may choose a company name or logo that has special climate or environmental considerations attached to it, or if the company uses special “green” symbols.
If a company wants to implement a marketing strategy with a focus on environmental friendliness or sustainability, it must be aware of the Marketing Practices Act’s requirements for good marketing practice, the prohibition on misleading consumers and the requirement to be able to document the features emphasised.
This is set out in sections 3, 5-8 and 13 of the Marketing Practices Act.
All claims used in marketing must be true and accurate. They should also be clearly worded so that the consumer understands them immediately and is not misled. This also applies to the message of the environmental and ethical claims used in the marketing.
Failure to comply with these guidelines constitutes misleading marketing in breach of sections 5-6 of the Marketing Practices Act. Failure to comply may result in a fine.
In addition to the requirement that a particular piece of information be accurate, section 13 of the Marketing Practices Act requires the company to able to document the accuracy of the information. This means that the company must be able to substantiate its claim, which can be done through studies and statements from independent experts.
The documentation requirements differ depending on whether the claim is general or specific.
General claims are broad, positive statements about the company or product. Examples include ‘green’, ‘climate-friendly’, ‘eco-friendly’ and ‘sustainable’.
If such claims are used without further elaboration, the documentation must include a life cycle analysis of the product or company. This should be prepared in collaboration with independent experts and should identify and assess all environmental aspects and significant environmental impacts at each stage of the product or company life cycle. If a general claim is accompanied by an explanation in the actual marketing, a life cycle assessment is not required.
The documentation requirement is less stringent for specific claims, which are more limited claims about a specific climate or environmental benefit of a product. One example is “paraben free”.
If the company uses such specific claims, there is no requirement for documentation in the form of a life cycle analysis, but the company must be able to document the accuracy of the claim and essential information must not be omitted. In addition, it is not allowed to emphasise an environmental feature that is a legal requirement.
It is important for companies to keep up to date with new legislation, new technological knowledge or new products on the market that would mean that a claim is no longer accurate. If companies do not regularly update their marketing, they run the risk of their marketing being misleading and therefore in breach of the Marketing Practices Act.
A product is only sustainable if its production and marketing “do not compromise the ability of future generations to meet their needs”. Since very few products fit this description, companies will rarely be able to claim a product is sustainable without being misleading.
However, companies can market themselves as “striving for greater sustainability”. However, to use such marketing, the company must be able to document that it has a specific plan for how it will achieve sustainability. The plan must also be verified by an expert.
The company can also market itself as having taken specific “sustainable actions”. However, this requires the company to disclose what actions it has taken and that these actually promote sustainable development.
Even if the company does not use climate or environmental claims about the product, the design of the product may be such that it is misleading in itself. Pictures, colours and drawings may give the false impression that the product does not harm the environment or even has environmental benefits.
This could also be considered misleading or a breach of good marketing practice, so companies also need to look at the overall impression that the marketing of products gives to consumers.
At Gorrissen Federspiel, we have extensive experience in advising companies on how to avoid greenwashing in their activities. As experts in marketing law, we have extensive experience in advising both large and small companies that have a special responsibility to the environment and society on how to actively incorporate this into their marketing strategy while complying with marketing law.
Our in-depth knowledge, combined with our insight into the current challenges affecting companies’ choice of marketing strategy, ensures that our advice on marketing and consumer law is of the highest quality.
As the Danish Consumer Ombudsman has stepped up its efforts to combat greenwashing in recent years, we have provided increasingly complex advice in this area. Among other things, we can help you ensure that your company complies with documentation requirements and assess specific marketing campaigns, both on- and offline.
Our marketing law experts are always up to date on the latest developments in green marketing and are ready to advise you if you have any questions about your company’s use of climate and environmental claims in marketing (in Danish).