"Green", "eco" or "environmental" claims have been high on the Commerce Commission's (Commission) priority list for some time and, as a signal of intent, the Commission has now released its Environmental Claims Guidelines (Guidelines). The Guidelines are intended to assist businesses to better understand their obligations under the Fair Trading Act when making claims about the environmental impact of a good or service – in what can be a grey area for marketing teams.
Environmental claims are representations about the characteristics of a product or service that give consumers the impression that they are beneficial for the environment or have a smaller negative impact on the environment compared to an alternative. Claims can be in the form of words or imagery and include representations like "organic", "recyclable" or "biodegradable", as well as claims about how or what a product is or is not made from.
These types of environmental claims can be challenging for businesses, especially when trying to substantiate them, to ensure they are easily understood by consumers and to ensure they apply to New Zealand conditions. But the challenge is often worth it, as environmental claims offer an effective way to distinguish a product/service, a brand or a business – and they undoubtedly resonate with consumers.
In this context, the Guidelines are welcome, as they replace the Commission's Guidelines for Green Marketing, published in 2008. The new Guidelines can be accessed here. While relatively high level, they cover a range of green claims, including recyclable, "free-of", sustainable, biodegradable, renewable energy, carbon offset/neutral and organic claims. As always, the overall impression is key when assessing whether an advertisement or publication may be misleading. This includes the use of brands and imagery.
In publishing the Guidelines, the Commission has reminded businesses that claims must be accurate, up to date and based on credible evidence at the time they are made, and that consideration should be given to the entire contents of a product and its lifecycle before making an environmental claim. For example, if only one part of a product is made from recycled material, then it must be clearly explained which parts are, and which parts are not.
It is clear from the Guidelines that businesses need to exercise care with environmental claims and green marketing.
If you have any questions relating to compliance with the Fair Trading Act in making environmental claims, please contact us on the details below.