Should businesses be afraid to market their sustainability efforts?

Heavy penalties are likely to be imposed on companies that fail to comply with current regulations on environmental claims. At the same time, it is important that companies have the confidence to communicate their sustainability efforts, so as to give consumers the opportunity to make informed choices and the power to contribute to the green transition.

Mats Johansson and Michelle Cranmer of Öresund Advokat took part in Almedalen Week 2024 to discuss communication regarding sustainability work and highlight the legal aspects of the issue.

Principles of marketing law

Most – but not all – of what a company communicates in a commercial context constitutes marketing.

Within marketing law in Sweden and the EU, there are, among others, these three fundamental concepts:

• marketing must not be misleading;
• it must comply with good marketing practice; and
• whoever makes a claim must prove that it is true; otherwise, it is misleading.

How is a claim proven?

There is therefore a requirement to prove that a claim is true, and in Sweden the standard of proof is set very high.

As a rule, generally accepted scientific evidence is required to show that the claim is true. A study supporting a claim is therefore unlikely to be sufficient as evidence if there is another study suggesting otherwise.

Environmental claim

An environmental claim is, according to the directive on greater consumer power in the green transition, a message or representation in any form, including representation through text, images, graphics or symbols such as labelling, brand names, company names or product names, in connection with a commercial communication and which states or implies that a product, product category, brand or trader:

• has a positive or no environmental impact;
• is less harmful to the environment than other products, product categories, brands or traders; or
• has improved its impact over time.

The Green Claims Directive

In 2023, the European Commission presented a new legislative proposal in this area: the Green Claims Directive.

The Directive aims to further strengthen and safeguard consumers' right to reliable and verifiable environmental information. This is to be achieved through clear and uniform rules specifically concerning the substantiation of environmental claims. Among other things, it is proposed that requirements for substantiating environmental claims should be established.

Furthermore, according to the proposal, environmental claims will need to be verified by a third party before they can be used for commercial purposes.

Heavy penalties are also likely to be introduced for companies that do not comply with the relevant provisions.

If the directive is adopted, it will be implemented into Swedish law and will affect all companies that use environmental claims in their marketing.

What companies should do

It is our hope that companies will invest in their marketing and actually dare to communicate their sustainability work.

Below is specific advice on what companies should do in connection with such marketing:

• Review all communications. Brand names are not exempt but may also constitute environmental claims.
• Decide what is to be communicated and how.
• Be specific in your claims. General and vague wording is prohibited.
• Start gathering evidence to support what is to be communicated.
• Seek legal advice at an early stage.
• Keep up to date and follow developments in this area.

To watch the panel discussion "Talk the walk – how to avoid greenhush and greenwash" in which Mats Johansson took part during Almedalen Week, follow the link: Talk the walk – how to avoid greenhush and greenwash.

If you would like to know more about greenhushing and greenwashing or have any other questions regarding marketing, please feel free to contact Mats Johansson or Michelle Cranmer.