ASA to take tougher stance over net zero and carbon neutral claims in UK ads

Brand and marketing experts at Pinsent Masons have warned of an increased burden on businesses to be clear about the claims they are making.

Recent research (68-page / 1.64MB PDF) by the Advertising Standards Authority (ASA) into consumer understanding of advertising claims around products and services being ‘net zero’ and ‘carbon neutral’ found a great degree of confusion among consumers about what these terms actually mean. The research, which was a qualitative study consisting of 75 interviews across the UK, found these were the most commonly encountered environmental claims in advertisements.

‘Offset’ was highlighted as being the primary source of confusion and misunderstanding, as some participants assumed that carbon neutral claims referred to an absolute and direct reduction in carbon emissions. But when the role of offsetting in claims were revealed, this led to consumers feeling misled.

The research also found that 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. It recognised the need for more transparency in the treatment of offsetting and target dates, particularly in these sectors.

There were calls by participants for significant reform to simplify and standardise the definitions of ‘net zero’ and ‘carbon neutral’ and for green claims to be policed by an official body, such as the government.

Responding to the research findings, the ASA identified a number of steps it will take to address the issues highlighted by the research, along with broader issues around the use of the terms ‘net zero’ and ‘carbon neutral’ and the evidence on which such claims should be based.

In a statement, the ASA said it would update its guidance on green claims before the end of 2022 to ensure consistency with the guidance issued by the Competition and Markets Authority (CMA). The main goal is to make it clear that organisations making green claims must adequately explain the basis on which they are made, even where such advertising is constrained by space or time.

Following the publication of the updated guidance, the ASA plans to carry out a six-month monitoring period to assess the impact of the guidance on carbon neutral and net zero claims in advertising. It will pay particular attention to how such claims are being substantiated.

“The ASA’s findings highlight the varied consumer understanding of some common green claims. It is clear that the ASA will take a dim view of claims that are misleading and that there will be an expectation that more explanation will be given as to the basis on which these claims are made. Business will need to take more care to ensure that the reputational damage of an adverse ASA finding is avoided,” said brand protection expert George Campbell of Pinsent Masons.

Depending on the outcome of the monitoring period, the ASA indicated that its sister body the Committee of Advertising Practice (CAP) could launch a review in a bid to provide guidance about what forms of evidence are more or less likely to be acceptable to substantiate green claims in advertising. That review will take account of expert insights, policy developments in the UK and other jurisdictions and, where appropriate, consultation with interested parties.

The ASA also vowed to take proactive action to crack down on organisations making unqualified carbon neutral and net zero claims. If organisations fail to explain the basis on which these claims are being made, they are likely to breach existing rules and may face enforcement action by the ASA.

“Businesses must continue to ensure that environmental claims about their products and services are properly substantiated. There is currently a lack of clarity around what is acceptable substantiating evidence, so businesses will welcome any future guidance on that from the advertising regulatory bodies,” added Gill Dennis of Pinsent Masons.

The ASA first published its guidance on misleading environmental claims in December 2021. The research and the proposed update come less than a year after the initial guidance, reflecting the urgency and the regulator’s determination to resolve the issues that have been highlighted.