Greenwashing epidemic: UK’s Competition & Market Authority combats false F&B claims with stricter guidelines

25 Feb 2022 --- The marketing sector for industries like F&B is rife with misleading and often outright false claims, some of them appealing to “green” credentials that convince consumers products are environmentally friendly. A recent international analysis of websites found that 40% of all green claims, across multiple industries, made online could be misleading.

These marketing trends are, however, backfiring on industry in serious ways. In the past years, a tide of complaints and rulings against companies has forced some major corporations to make public retractions and apologies for deceptive publicizing.

Brands like Innocent Drinks, Oatly, Nutricia and Tony’s Chocolonely have all come under fire for using duplicitous marketing tactics that play on public concern for social and environmental sustainability.

The UK’s Competition & Market Authority (CMA) recently introduced the Green Claims Code (GCC) – a set of guidelines designed to aid industry in ensuring marketing campaigns are honest. Speaking to FoodIngredientsFirst, CMA’s director Cecillia Parker Aranha says the GCC is necessary as the issue of greenwashing has become so prevalent.

Harsh economic fines for companies running misleading ads are being proposed.“We’re clear that any business that breaks the law risks damaging its reputation with customers and could face action from the CMA. This could include taking a business to court if they break formal promises made to us (often called ‘undertakings’ or commitments’).”

“We’ve also asked the government to strengthen our powers to allow the CMA to fine businesses who breach consumer law or undertakings, which would create an even bigger deterrent to businesses making misleading green claims.”

Green dilution danger
Besides being misleading, adverts falsely purporting green credentials also damage the reputation and trust in firms that are making genuine efforts to improve the environmental sustainability of their products.

“More than ever before, shoppers are considering the environmental impact of products and services before handing over their hard-earned money. But at the moment, we’re concerned that too many businesses are falsely taking credit for being green, while genuinely eco-friendly firms don’t get the recognition they deserve,” says Aranha.

“That’s why we introduced the GCC, to help businesses understand how to communicate their green credentials while reducing the risk of misleading shoppers.”

Aranha says companies are welcoming the introduction of the codes, with many feeling the need to regain consumer trust amid so much false information.

The GCC codes
The GCC stipulates that all marketing claims must be truthful and accurate. Even a factually correct claim could mislead. The codes require that:

• Claims must be truthful and accurate. Even a factually correct claim could mislead. Businesses should make sure statements are truthful and don’t lead customers astray.
• Claims must be unambiguous. Clear, transparent and straightforward wording is important.
• Claims must not omit or hide important information. The product should communicate the green claim to keep the user fully informed.
• Claims must only make fair and meaningful comparisons. When comparing products with others, the comparison must be based on equal and unbiased measurements.
• Claims must consider the full life cycle of the product. The product's entire lifetime, from the cradle to the grave or cradle to cradle, may be relevant to the green claim.
• Claims on green products must be substantiated. Claims should be backed up with scientific evidence and data.

A website providing checklists and quizzes for companies to ensure their ad campaigns fit these criteria has now been launched, along with a separate site named “Rip-Off Tip-Off” to help consumers recognize and flag false practices. Companies must convey the negative ethical consequences of their production practices, according to the GCC.

PR responsibility
Paul Foulkes-Arellano, the founder of Circuthon Consulting, a management consultancy company that aids businesses in circularizing their production and marketing practices, tells FoodIngredientsFirst radical change is needed to reverse decades of false advertising practices.

“Brands have been able to get away with exaggerated claims for decades, so a huge re-education around what is acceptable by industry is required. The whole area of guidance/legislation/rulings is a minefield for F&B companies. We advocate for active transparency – don’t allow your PR teams to mention purely the benefits while hiding any negatives.”

This is a central part of the new GCC, which encourages companies to convey to consumers the damage their products cause clearly. Tony’s Chocolonely is a clear example of this, which – after being outed for sourcing cacao beans from child labor – has spoken openly about the near impossibility it faces in achieving ethical production practices.

Harsher legislation on the cards
Foulkes-Arellano says harsher punishments for companies and marketing firms need to be implemented. “Fines will start to happen where there have been flagrant breaches of the [GCC] code – whether purposely or through sheer ignorance. Advertisers also need to be fined – and immediately. Reported ads are often taken off the air long before the rulings, so it’s of no deterrent to brands making false claims.”

“Marketers are employed to generate profit growth. That can be generated by anti-competitive activity, which extends to environmental claims. Industry manipulation is happening and will continue to happen,” he asserts.

“Much of the readily available information (on the internet) is actually generated and seeded by fossil-fuel lobbyists, sugar growers and so forth.”

This issue is reflected in The International Consumer Protection Enforcement Network’s recent internet sweep, which analyzed almost 500 websites promoting products and services across a range of sectors, including clothes, cosmetics and food. Members found that four in ten of these websites appeared to be using tactics that could be considered misleading and therefore potentially break consumer law. Misleading adverts often gain exposure for months while under investigation.

Where does responsibility lie?
Circuthon Consulting says it has been led to believe the CMA will only consider a company guilty of greenwashing if it receives multiple complaints from unconnected sources.

“This [strategy] puts the onus on the shoppers and concerned industry watchers to take time to complain and prove greenwashing. This also requires an inordinate amount of work, which is a barrier to action,” says Foulkes-Arellano.

However, companies also need to be aware that marketing firms are largely ignorant of what constitutes sustainable practice – be it environmental, social or financial.

“Marketing and advertising companies are briefed to sell environmental benefits and would rarely be in possession of all the facts. These promotional companies can no longer put their heads in the sand. They need to really understand just what they are doing in respect to the code.”

Ultimately, the CMA says it needs more resources to catch, fine and deter companies from misleading consumers. “It’s now up to the government to put these in place,” concludes Aranha.

By Louis Gore-Langton

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