Environmental claims: Casting a wide 'Net Zero', Geraint Lloyd-Taylor

It is a sign of how quickly the regulation of environmental (green) claims is evolving in the UK.

World leaders have been talking about Net Zero for years, often in abstract ways. In some cases, even they might not always have fully grasped the real meaning. One might argue that 'net zero' is a helpfully vague and malleable term, if you're a politician. It sounds good, but is sometimes hard to pin down - and if you move the goal posts or aren't doing much to achieve it just yet...well... that's pretty hard to track.

During COP26 in late 2021, when the UK took its turn at the helm, the number one priority was stated to be: "Ensuring promises on emissions reductions are kept to keep 1.5 degrees alive: That every country honours the commitment in the Glasgow Climate Pact to strengthen their climate change targets to align with the Paris temperature goal as necessary in 2022, as well as for delivering on their net zero commitments and 2030 emissions reduction targets – particularly through policies to end coal power, halt deforestation and transition to clean vehicles".

So we all got behind it, but did we really understand what it means?

But it isn't just the politicians - even the regulators have been using the phrase, too.

In November 2020, the ASA issued a statement to "welcome [a] milestone with the Advertising Association’s announcement of their Ad Net Zero plan. The ASA used the headline "Supporting Ad Net Zero".

Fast forward to December 2022, and the CMA announced its CMA Annual Plan consultation 2023 to 2024 - GOV.UK (www.gov.uk). In it, the CMA made clear it wants the whole UK economy to "grow productively and sustainably" and suggested it would "help accelerate the UK’s transition to a net zero economy". So, no signs that the CMA is shying away from that phrase.

Even more recently, just ten days ago, in early February 2023, Rishi Sunak created a new government department: The Department for Energy Security and...you guessed it... Net Zero!

The Prime Minister appointed Grant Shapps the UK's very first Secretary of State for Energy Security and Net Zero

But, at the same time, the ASA has been getting cold feet. The (sustainable) winds of change seem to be blowing through the ASA.

Indeed, just three days after the Prime Minister's announcement, the ASA decided to publish its own updated guidance on the term 'net zero', implying that it was mostly just hot air... because consumers just don't seem to understand what it means.

I point out the authorities' own use of these terms not to criticise or embarrass the government, CMA or ASA, but rather to urge the ASA to take a consistent and proportionate approach. If the government can set so much store by this term, and use it to inform its own policy decisions over the next several decades, and if the government expects businesses to do the same, surely the ASA can't follow those same businesses around, whipping them for doing so - provided they do so correctly, of course.

The ASA still seems to be making up its mind about how best to tackle this issue, no doubt acutely aware of the government's insistence on using the very term the ASA considers to be problematic...

But where are we now?

The ASA's latest guidance

Well, the ASA has issued updated guidance on the use of 'net zero' and 'carbon neutral' and similar claims.

The latest guidance isn't a radical departure, but is useful to gauge the ASA's priorities and approach in this area.

The guidance says that, in light of the low understanding and lack of consensus around the meaning of carbon neutral and net zero claims, CAP and BCAP advise advertisers to take into account the following guidance, which draws on key principles of the CMA guidance, and, if followed, means that claims are less likely to mislead:

Avoid using unqualified carbon neutral, net zero or similar claims. Information explaining the basis for these claims helps consumers’ understanding, and such information should therefore not be omitted. [To avoid the double-negative here, such information should be included, usually within the ad].
Marketers should ensure that they include accurate information about whether (and the degree to which) they are actively reducing carbon emissions or are basing claims on offsetting, to ensure that consumers do not wrongly assume that products or their manufacture generate no or few emissions.
Claims based on future goals relating to reaching net zero or achieving carbon neutrality should be based on a verifiable strategy to deliver them.
Where claims are based on offsetting, they should comply with the usual standards of evidence for objective claims set out in this guidance, and marketers should provide information about the offsetting scheme they are using.
Where it is necessary to include qualifying information about a claim, that information should be sufficiently close to the main aspects of the claim for consumers to be able to see it easily and take account of it before they make any decision. The less prominent any qualifying information is, and the further away it is from any main claim being made, the more likely the claim will mislead consumers.

I welcome the ASA's approach of issuing updated guidance ahead of taking regulatory action against those that make these types of claims, particularly when it comes to companies that are genuinely making a difference to reduce their impact on the environment, even when that involves a complex and evolving blend of reduction and off-setting.

Where do we go from here?

Now that the ASA has set out its position: that consumer understanding of these claims is 'patchier' than was originally thought, it is going to step up its efforts.

For the next six months, the ASA will monitor the use of these claims in advertising to assess the impact of the latest guidance on carbon neutral and net zero claims in advertising. They will also gather information to assess how such claims are being substantiated.

If that monitoring shows that carbon neutral/net zero claims are being made based on questionable evidence, the ASA will invite CAP to launch a review, which would seek to provide guidance about what forms of evidence are more or less likely to be acceptable to substantiate such claims in advertising. The ASA says that "that review will take account of expert insights, policy developments in the UK and other jurisdictions and, where appropriate, consultation with interested parties."

In the meantime, the ASA has made clear it is coming after advertisers that make unqualified "net zero" and "carbon neutral" (and similar) claims in ads. The ASA says it is aware that some organisations are making carbon neutral and net zero claims that are entirely unqualified and, and as these breach the existing rules, the ASA will not wait for its wider assessment of the industry before taking action against such claims.

Such unqualified claims have technically been prohibited for a while, and the CMA's Green Claims Code makes clear the CMA is on the same page as the ASA on that front. The ASA has made it a top priority to tackle such claims.

So, 'zero' rest for the wicked... and zero time to be complacent for those trying to do the right thing, it seems!