The Advertising Standards Association (ASA) has released a report calling for stricter regulation on green claims made by brands after its research revealed consumers find current terminology ‘challenging and difficult to understand.‘
The report by the UK’s advertising watchdog, researched consumer attitudes and understanding in two key areas: ‘carbon neutral’ and ‘net zero’ ad claims, including advertising for hybrid and electric vehicles.
Although the ASA recognises there are currently no official definitions for the terms carbon neutral or net zero and no fixed rules for how businesses should achieve these goals, there is concern that current methods of achieving carbon neutrality/net zero are not as robust as they could be. Therefore, the research aimed to gauge how consumers interpreted these terms when presented in advertising.
Miles Lockwood, director of complaints and investigations at the ASA, commented: “Our research shows that there is consumer confusion about the meanings and the evidence behind carbon neutral, net zero and ad claims for hybrid and electric vehicles. It also suggests there is a need for them to be simplified and standardised. All of this signals that while the UK public buy-in to companies doing the right thing on the environment, they remain wary of ‘greenwashing’.
“We’ll act on these findings – updating guidance, sharing with government and partners, reviewing the evidence and taking enforcement action where necessary – to ensure environmental claims aren’t just hot air.
What were the report findings?
The primary source of misunderstanding found in adverts were related to offsetting claims, made in the context of carbon neutral and net zero. Some people think carbon neutrality implies total carbon reductions and feel misled when the role of offsetting in achieving carbon neutrality is explained to them.
Carbon neutral is defined as the equilibrium between the amount of carbon emitted, and the amount removed, or ‘sequestered’ from the atmosphere. Commonly, companies achieve carbon neutrality through purchasing carbon credits, which fund removal projects around the world.
Net zero refers to a reduction in overall emissions as much as possible, but can still rely on a small amount of offsetting if necessary. The former allows businesses to pay away their emissions, whereas the latter encourages organisations to inspect their footprint and implement emission reduction strategies throughout their business.
Claims in air travel, energy, and automotive advertising tended to attract more attention, while the potential role of offsetting, when revealed, could result in greater disappointment. Participants suggested the need for transparency is greater in those sectors.
With hybrid and electric vehicles, the findings indicate that consumers are struggling to navigate the complex terminology and technical specifications of these vehicles, and there is therefore the potential for them to be misled.
What are the next steps?
The ASA is to share its findings with the UK government, so it can consider the call for clearer and standardised definitions of carbon neutral and net zero claims, as well as claims around performance measures on hybrid and electric vehicles.
Guidance is to be updated before the end of 2022, ensuring consistency with the Competition and Market Authority.
The ASA is to revisit past rulings on hybrid and electric vehicles, identifying which areas of precedent (and any guidance based on this precedent) require further consideration. The claim ’self-charging hybrid’ is an example.
It is to carry out a six-month monitoring period in which it will assess the impact of the updated guidance on carbon neutral and net zero claims in advertising.
If that monitoring concludes that carbon neutral/net zero claims are being made but the types of evidence that underpins them is questionable, it will launch a review that will seek to provide guidance about what forms of evidence are more or less likely to be acceptable to substantiate such claims in advertising
Such a review will take account of expert insights, policy developments in the UK and other jurisdictions and, where appropriate, consultation with interested parties.
The ASA has already been in the headlines this week after banning two HSBC advertising campaigns that it has used since 2020. The ASA ruled that adverts highlighting HSBC’s support for tree planting and cleantech would mislead consumers into thinking that its financing activities had a net benefit to the environment.
It marked the ASA’s first action against a bank for so-called “greenwashing”.
