So, is it becoming more relevant to avoid greenwashing? The short answer is “YES”!
Last Friday the Danish High Court published its decision on the Danish Crown case. In short, the conclusion was:
- After an overall assessment, the phrase “Danish pigs are more climate-friendly than you think” was deemed not to be misleading in and of itself. This is namely due to its relative nature along with probative evidence found in existing reports on pork’s relative CO2 emissions compared to other protein sources such as beef.
- Contrarily, “climate-controlled pork” was considered a free-standing and general statement, which gave consumers the impression that the pork was subject to an actual qualitative environmental control corresponding to authorised environmental labels. Danish Crown was unable to prove that this was the case. Therefore the claim was misleading.
For further information on the case, you can refer to Greenwashing: A Persistent Challenge to Achieving Sustainability.
WHAT IMPACT COULD THE DANISH CROWN CASE HAVE ON THE EU'S LONG-TERM APPROACH TO GREENWASHING?
This landmark decision is proof that it is now imperative to avoid any possibility of an accusation of greenwashing. There are two reasons for this:
- The Danish Crown decision has more clearly defined what companies can and cannot do when marketing their product; and
- The implementation of the newly adopted EU Directive to empower consumers for the green transition by the end of 2026.
The Danish Crown case proves that companies need to be mindful when using ‘green’ claims to market their products as the Courts can and will enforce relevant legislation. This is also supported by the Consumer Ombudsman’s approach on the subject which has already spawned filings of criminal charges with the police. These reports are very likely to lead to convictions in which case fines will be imposed.
While the Danish Crown case cannot be used to ascertain the size of these fines due to the case being filed by an interest group, it can safely be assumed that future fines will be considerable.
In addition to the legal ramifications, companies also face significant commercial damage as a result of consumer mistrust and skepticism. A report from the Danish Competition and Consumer Authority revealed that consumers have no or little trust in the ‘green’ claims being made by various and the consequences of this mistrust cannot be underestimated.
In short, the implementation of the newly adopted EU Empowering Consumers Directive will trigger much stricter legislation relating to:
- Generic environmental claims and other misleading marketing tricks
- Commercial communications about goods that contain a design feature introduced to limit product durability
- Sustainability labels
In terms of generic green claims, use thereof will only be permitted if the company also can prove a relevant “excellent recognized environmental performance”. Generic terms could include “environmentally friendly”, “natural”, “biodegradable”, “climate neutral” or “eco”.
Claims such as “climate neutral” and “climate-positive” will also be banned when based on emissions that utilise offsetting schemes that have a neutral, reduced, or positive impact on the environment.
Companies will no longer be permitted to withhold commercial communications related to a goods feature which limits its durability, reparability, or recyclability if the information is available to the company.
In addition, the use of sustainability labels that are not based on a third-party certification scheme or established by public authorities will be prohibited. This will pertain to an excess number of labels currently found on the market that blur the line between truth and unsubstantiated claims. The main objection is to provide consumers with trustworthy, transparent, and verifiable information.
WHILE THE DANISH CROWN DECISION AND NEW LEGISLATION ARE IMPORTANT...
Both the Danish Crown decision and the new legislation definitely should not be interpreted as prohibiting companies from being creative in their marketing efforts. However, it does underline that it is inherently important that consumers must be able to trust the labelling of their goods.
What companies really should fear is not the fines or decisions from the Courts (even though these will likely prove damaging), but the fact that both lawsuits and allegations can and will quickly ruin a reputation with the consequence being a noticeable negative impact on sales and revenue.
If you would like to discuss how you can make sure you avoid the threat of an accusation of greenwashing or are concerned a brand may have made false claims, please contact the specialists in our dedicated FMCG and foodtech teams.
If you would like to find out more about the Danish Crown case these links may be useful:
