Regulatory responses to green marketing: some lessons from the past and challenges for the future
The proliferation of unclear or unchecked product sustainability information and the absence of coordinated and harmonized regulation on marketing green claims undermines sustainable choices and contributes to confusion and mistrust. The question is, how can we ensure that consumers are able to make informed decisions where no specific rules apply?
UNEP and the Working Group on Product Sustainability Information of the One Planet network Consumer Information Programme (CI-SCP) have agreed to provide an overview of existing binding and non-binding policy instruments in the field of product sustainability information, in particular policies concerning marketing claims. The objective is to offer a strategic overview of the breadth of policy instruments on product information in different countries, to understand how sustainability is (or is not) currently incorporated into these instruments.
Current consumption and production patterns put us at risk of irreversibly planetary crises related to climate change, biodiversity loss and pollution. In the context of the 2030 Agenda for Sustainable Development and the decade of action to deliver the Sustainable Development Goals, sustainable consumption and production (SCP) need to be prioritized if we are to achieve prosperity, equity and planetary sustainability for people.
The transition to SCP patterns demands that all stakeholders have the information they need to be able to make informed decisions. Access to reliable information is one of the essential conditions for an improved, thorough decision-making process, both for consumers and producers. This is recognized in the SDG 12 Target 6 (i.e. Encourage companies, especially large and transnational companies, to adopt sustainable practices and to integrate sustainability information into their reporting cycle) and Target 12 (i.e. By 2030, ensure that people everywhere have the relevant information and awareness for sustainable development and lifestyles in harmony with nature).
The right information can enable those consumers that seek to change their consumption behaviour to take more sustainable decisions, and can allow producers to manage their production processes more transparently and sustainably. It is also key to fight greenwashing and raising awareness and engaging those who are not yet seeking the more sustainable option.
This UNEP-CI-SCP project is based on the understanding that sustainability information has the potential to support consumers in their decision-making process related to product purchase, use and disposal. It recognizes however that the product sustainability information landscape still presents many challenges. First, the growth of markets for sustainable products is often impaired by the quality of information facing consumers, which can be imprecise, unclear, incomparable, unsubstantiated, misleading or irrelevant when guiding their choices. Second, a lack of a coherent policy framework and harmonized standards and criteria discourage reliable information from being provided and incentivized. This project aims to inform future work of CI-SCP working group in this field, as a priority area requested by the CI-SCP Multi-stakeholder Advisory Committee. A key, long term objective is to generate global consensus by creating a level playing field for developing new, and revising existing, regulation on marketing green claims.
Marketing claims are any assertions placed upon products relating to promotion to consumers. Whereas there are no harmonized global regulations on marketing claims, many countries have their own policy instruments in place to regulate how companies persuade consumers to buy their products or use their services (Kangun & Polonsky, 1995). It is common that these instruments are part of consumer protection laws and regulations. As an increased number of businesses have used green claims to market their products or services as environmentally friendly, it becomes critical to understand how countries have developed policy instruments on the substantiation of environmental claims.
Green claims (or environmental claims) are assertions related to environmental attributes of products. They aim to highlight how a product or service provide a benefit to the environment, or is less damaging to the environment in comparison with other products or services (UNEP & ITC, 2017). Companies can do this through a variety of different methods, such as logos, graphics, statements, symbols, emblems, colours, and product names, and different communication channels can be used (e.g. marketing material, advertisements, packaging, websites, social media).
In order not to be misled, green claims should be clear, reliable, relevant, transparent and accessible as outlined in the Guidelines for Providing Product Sustainability Information (UNEP & ITC, 2017). Misleading environmental claims occur where a business makes false claims about its products or services, or omits or hides information, to convey the message that they are less harmful or more favorable to the environment than they really are (CMA, 2021). There are several methods to measure and assess products’ environmental impacts and a substantive number of labels related to environmental information. According to the Ecolabel Index 2021, there are currently 455 environmental labels in 199 countries, and 25 industry sectors. Despite this, the number of misleading claims remains expressive (EU, 2014).
An analysis of websites hosted by the International Consumer Protection Enforcement Network (ICPEN) in 2020 found that 40% of green claims made online could be misleading. These included, for instance, vague claims including terms such as ‘eco’ or ‘sustainable’ without adequate explanation or evidence, own brand self-made logos that resemble eco motifs, and hiding or omitting critical information to appear more eco-friendly (CMA, 2021).
More reliable and trustworthy green claims would favour not only consumers (who would benefit from having access to clearer information), but also companies (by improving brand reputation and by avoiding unfair competition) and governments (for instance, evoking the beneficial relationship between product sustainability information and public and private procurement, and improving the quality of the sustainability information made available).
Consumer rights are central to achieving sustainable development as these rights contribute towards a more equitable and efficient society. Global attention has been focused on how sustainability can be incorporated into consumer protection policies. This suggests that it is relevant that regulations of marketing claims include more provisions around claims that address the environmental and social dimension of products and services.
Regulations and strategies for consumer protection are a result of institutional and historical national characteristics. Consumer policies are “embedded in social institutional arrangements that heavily influence their organization, their goals and strategies, as well as their efficiency and effectiveness” (McGregor, 2017, p.685). However, it can be still valuable to identify similarities and differences in countries’ approaches to consumer policy since consumer policies are rarely developed isolated from the political processes in other countries (Repo and Timonen, 2017).
The foundation for effective consumer protection is national legislation that clearly defines consumer rights and organisational responsibilities. Most countries have consumer protection legislation in their national frameworks, but only a few claim to have a national policy on consumer protection and have a strategic plan in place to build on this foundation and provide the necessary detail for implementation (Consumers International, 2018). There seems to be a correlation between income and prevalence of consumer protection legislation, with high income countries more likely to have national policies and strategic plans in place (Consumers International, 2018).
The diluted market for consumer information tools and their limited global monitoring led to problems such as uncoordinated proliferation of tools, lack of harmonization of criteria, tools not addressing key product’s impacts, information overload, as well as mistrust and confusion in existing tools and sustainable products. This research has found that most countries do have regulation on misleading or false marketing claims. However, when it comes to communicating the sustainability attributes of products, only few countries have detailed rules on the substantiation of environmental claims. This means that most existing regulations do not specifically target misleading or false green marketing claims.
Only few countries passed laws or published specific guidance about sustainability marketing practices. They are mostly developed countries, such as the UK, France and the US. In the European Union, for instance, national competent authorities can only prohibit environmental claims that they find to be misleading towards consumers on the basis of a case-by-case application of the existing EU consumer law. As there are no harmonized regulations for marketing claims made on the sustainability attributes of products, these claims fall into a grey area of law. Also, due to the lack of legislation on green claims across the globe, assessment of the marketing claims usually is done on case-by-case. It also important to notice that most of the existing instruments that attempt to govern marketing green claims are voluntary, non-binding instruments, in the form of guides.
The way forward
Governments play a crucial role in supporting the provision of accurate and reliable product sustainability information. The Guidelines for Providing Product Sustainability Information can be a helpful tool to help countries improve the quality of the sustainability information made available at national level. It can also support governments to move to a more harmonised approach for regulating the provision of environmental information by the private sector. Here we propose some actionable points for consideration by policymakers in view of advancing the issue of marketing green claims.
Enhance harmonised approach for marketing green claims
Explore regional and global collaboration to coordinate regulatory action in the field of green claims, attempting to minimize fragmentation. This coordinated action could be based on the Guidelines for Providing Product Sustainability Information, which offer global guidance on making effective environmental, social and economic claims, to empower and enable consumer choice.
· Strengthen implementation and enforcement of existing regulation on marketing and advertising claims and develop procedures to extend enforcement to environmental claims, relying on best practices experiences of other countries in this area and avoid duplication of efforts.
Promote and support efforts that aim to harmonize methods to assess the environmental impacts of products and services, including life cycle assessments. This would bring cost savings for governments, as well as companies that operate across borders.
Develop coherent policy framework on marketing green claims
· Enact regulation or release guidance on marketing green claims that could reference or be based on the Guidelines and its ten Principles.
Establish a coherent policy framework to help reduce the number of misled marketing green claims in the market, while making sustainable products and services the norm.
Revise existing national consumer laws and include provisions that aim to empower consumers for active participation in the transition to sustainable consumption and production patterns. This could be done by developing communication campaigns and activities to educate consumers on how to better evaluate the credibility of green claims.