The Netherlands Authority for Consumers and Markets (ACM) has named the monitoring of ‘sustainability’ and the ‘sustainable economy’ as one of its spearheads for 2024. It announced that it will (i) take steps against companies that impede sustainability; and (ii) tackle misleading sustainability claims. Six months have now passed, so it is time to take stock of ACM’s monitoring of sustainability claims and greenwashing.
At the end of 2023, in this blog, we addressed the proposal of the European Commission (the Commission) for a Green Claims Directive. The European Parliament has now adopted the bill after its first reading. The EU is therefore preparing for new legislation on sustainability claims. Furthermore, the Green Transition Directive (2024/825) entered into force early this year. It aims to strengthen the position of consumers in the green transition. We will address both directives in this blog.
ACM intensifies supervision of sustainability
ACM has not been idle in recent months when it comes to its supervision of greenwashing (misleading sustainability claims). In this blog, we described the start of this ACM offensive, including the commitments given by H&M and Decathlon at the end of 2022. Since then, ACM has reviewed various sustainability initiatives and investigated the sustainability claims of companies from various sectors.
- In December 2023, supermarket chain Plus pledged to remove its incorrect sustainability claims following an ACM investigation. Plus used claims such as “climate-neutral supermarket”, “conscious ” and “sustainable” without substantiating those claims. This is misleading, according to ACM.
- Following a joint investigation by European consumer authorities – including the Commission and ACM – German online shop Zalando agreed to remove its misleading sustainability claims. Zalando used the “sustainable” claim and icons such as a leaf or a tree to draw consumers’ attention to sustainability benefits. According to the authorities, insufficient information was provided to substantiate the claim, which made the claims misleading.
- Booking.com agreed in March 2024 to take its “Travel Sustainable” programme (formerly “Duurzaam reizen”) offline after an ACM investigation. Based on this programme, accommodations were given a sustainability score of 1 to 3+ (green leaves). According to ACM, it was insufficiently clear to which sustainability aspects this score referred. This made the programme misleading, according to ACM.
- ACM investigated a sustainability initiative by Thuiswinkel.org in April 2024. Thuiswinkel intends to set up a new, sector-wide sustainability standard, aimed at making it easier for online shops to become sustainable in a way that is recognisable to consumers. According to ACM, the initiative does not adversely affect competition. Relevant is that (i) members can voluntarily choose whether to participate; (ii) an independent institution will be appointed to check whether members meet the criteria; and (iii) no sensitive competitive information will be exchanged.
- Supermarket chain Albert Heijn pledged in April 2024 to remove its allegedly false and misleading sustainability claims. An investigation by ACM had shown that Albert Heijn used the claims “most sustainable supermarket” and “we are working towards a more sustainable future together with our growers/our farmers” in several supermarkets. These claims were insufficiently substantiated, according to ACM.
- In April 2024, in cooperation with the Commission and several other national consumer authorities, ACM called on over 20 European airlines to stop making misleading sustainability claims. The joint campaign took place within the Consumer Protection Coordination (CPC) network. The authorities’ investigation revealed that many airlines used misleading sustainability claims, such as “sustainable”, “green” or “responsible”. Many airlines furthermore allegedly claimed that their CO2 emissions had been reduced without providing any further substantiation.
- Following an investigation by ACM, Eneco agreed in May 2024 to stop using misleading sustainability claims. One of the claims used by Eneco in its advertisements aimed at consumers was “sooner climate neutral”. Moreover, according to ACM, it was unclear that this claim referred to an ambition of Eneco for the year 2035.
- In May 2024, ACM investigated a sustainability initiative by Stichting Milieukeur. Stichting Milieukeur intends to impose a sustainability fee on the use of the already existing “On the Way to PlanetProof” label. This label is aimed at food and floriculture products that are produced in a more sustainable manner. ACM believes that competition will not be noticeably restricted by this sustainability initiative. One of the factors it considers relevant is that the label – and thus the sustainability fee – is voluntary.
Advertising Code Committee remains a low-threshold means for interest groups
In addition to the ACM, consumers or interest groups may also apply to the Advertising Code Committee (ACC) to complain about misleading sustainability claims in advertisements. Examples of cases handled by the ACC related to sustainability claims include complaints against Shell, KLM and recently MSC Cruises. The ACC is a low-threshold alternative for complainants, which is widely used every year. See also this blog on the subject.
An interesting development is that the ACC is currently considering a complaint by environmental organisation Reclame Fossielvrij about a TUI TV advertisement for airline holidays to Turkey. Earlier complaints to the ACC always related to specific sustainability claims in advertisements that allegedly amounted to greenwashing. Reclame Fossielvrij is now arguing that advertising for airline holidays as such should be prohibited entirely, because a harmful product is involved. Reclame Fossielvrij bases its position on an amendment (since 1 July 2023) to the Explanatory Note to Article 2 of the Dutch Advertising Code, which states that an advertisement as such may not encourage behaviour that is harmful to health or safety or that is extremely harmful to the environment.
The ruling that the ACC will issue in this case is a potential gamechanger, since it could mean that air travel advertising in a general sense violates the Advertising Code. Moreover, the ruling could also act as a precedent for other products or services that can be said to be ‘extremely’ harmful to the environment.
ACM and the ACC are in constant contact regarding complaints about misleading sustainability claims. In principle, complaints that come before the ACC are not dealt with by ACM at the same time, but signals from the ACC that a company is non-compliant – i.e. not complying with an ACC ruling – are treated with priority by ACM.
UK also paying attention to greenwashing
In late 2023, the CMA (Competition and Markets Authority, ACM’s UK counterpart) announced that it was launching an investigation into Unilever’s sustainability claims. According to the CMA, Unilever was allegedly using unclear and vague sustainability claims in relation to household products (of the Cif, Dove, Comfort and Lynx brands). Among other things, Unilever allegedly exaggerates how natural its products are and labels an entire product as ‘sustainable’ if, for instance, only one aspect of the product is actually sustainable. If the CMA finds that a violation has occurred, it may impose a fine of up to 10% of Unilever's annual global turnover. Cyriel Ruers explained the case in an interview with BNR Nieuwsradio.
The UK equivalent of the Dutch ACC – the Advertising Standards Authority (ASA) – recently ruled against oat milk producer Oatly. The ASA found that an Oatly advert about which a complaint had been made should no longer be broadcast. The Oatly television advert in question claimed, among other things, that its product “generates 73 percent less CO2 compared to milk”. This statement was based on a comparison with regular British full-fat milk. According to the ASA, this made the claim insufficiently substantiated and misleading, because consumers expect such a claim to compare all Oatly products with all types of cow’s milk, according to the ASA.
EU prepares for new legislation on sustainability claims
To date, ACM’s enforcement of misleading sustainability claims has been based solely on the Unfair Commercial Practices Directive (2005/29/EC). As part of the ‘European Green Deal’, the Commission has now launched two legislative proposals specifically aimed at countering unfair trade practices in the field of sustainability. These legislative proposals provide new guidance for ACM and other national authorities.
Green Transition Directive
The Commission submitted a proposal in 2022 for a new directive to strengthen consumers’ access to information within the green transition. This Green Transition Directive (2024/8245) entered into force on 17 March 2024, after being approved by the European Parliament and the Council. The aim of the directive is to better inform, protect and equip consumers to be ‘the real actors’ in the green transition. A key part of that process is countering misleading information on products, the trader’s business activities, and sustainability labels. The directive applies to all companies that operate in the European consumer market.
As a result of the entry into force of the Green Transition Directive, the Unfair Commercial Practices Directive, among other things, has been amended. The ‘black list’ (unfair commercial practices that are prohibited in all cases), for instance, has been supplemented to include commercial practices relating to sustainability claims (e.g. a ban on generic claims such as ‘environmentally friendly’ or ‘ecological’). Other changes include the expansion of the list of product characteristics about which a trader may not mislead consumers (such as recyclability).
A tightening of the rules that is relevant in practice is the ban on advertising CO2 offsets. The Green Claims Directive prohibits claims that a product has a neutral, reduced or positive environmental impact due to the offset of greenhouse gas emissions. This could include claims such as ‘climate neutral’, ‘reduced climate impact’ or ‘reduced carbon footprint’. Such claims may be used only if CO2 emission has actually been reduced in the production of the product or service in question. CO2 offsetting – i.e. outside the chain of the product or service in question – does not meet this requirement.
Member States have until 27 March 2026 at the latest to implement these changes in their national legislation. The changes must take effect in the Member States from 7 September 2026 at the latest.
Green Claims Directive
Another recent legislative proposal of the Commission concerns the Green Claims Directive. This proposal sets out new rules to prevent companies from making misleading claims about the environmental and sustainability impact of their products. The Green Claims Directive introduces specific regulations (lex specialis) and complements the Green Transition Directive (lex generalis). We answered the five main questions about this bill in our earlier blog.
The European Parliament gave its final consent on 10 May 2024 for a first reading of the bill, while proposing a number of changes:
- The Green Claims Directive obligates companies to provide evidence to substantiate their sustainability claims. Member States must appoint verifiers for that purpose. The European Parliament wants claims to be assessed by verifiers within 30 days. Simpler claims and products should thereby benefit from faster or easier verification.
- In line with the Green Transition Directive, the European Parliament wants claims based solely on CO2 offsetting (as opposed to CO2 reduction) to be prohibited at all times.
- Sustainability claims about products containing hazardous substances (such as ‘non-toxic’ or ‘harmless’) should remain possible for the time being, according to the European Parliament. The Commission will have to assess in the near future whether a complete ban on such claims should be introduced.
In cooperation with the Council, the new European Parliament will address the legislative proposal in more detail after the European elections in June 2024.
More information on ACM’s supervision of sustainability claims is provided in this video briefing. See consumentenrecht.info for more blogs on consumer rules in general. Information on dawn raids by ACM and the European Commission can be found at invalacm.nl.
Want to know more about supervision on the increasing use of (misleading) green claims and sustainability claims by companies? Read the artikel 'Inzet van duurzaamheidsclaims en keurmerken: waar ligt de grens?' by Diederik Schrijvershof and Mats Reijman in Tijdschrift voor Levensmiddelenrecht.
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