Greenwashing: golden rules for green claims

MARKETING 'OWN GOALS'

In some instances, businesses have suffered unnecessary reputational damage because of inaccurate execution of marketing campaigns. For example, last year Kathmandu settled an ASA claim relating to its biodegradable puffer jacket, which it had promoted in advertisements with the words “Made for out there. Biodegrades in here” – with an image of the jacket lying in an open landfill. In contrast to that image, the small print clarified that the jacket only broke down in specialised anaerobic landfills (rather than conventional landfill, which represent the majority of New Zealand landfills). Following the complaint, which was widely publicised, Kathmandu removed the advertisement – a lost opportunity for positive publicity after devoting extensive resources in developing the product.

JUNE 2023

New Zealand businesses wishing to promote their environmental initiatives should implement these recommendations as part of their ESG strategy, and take care to learn from the increasing flow of enforcement examples and regulatory recommendations emerging here and overseas.

Greenwashing

RECENT ENFORCEMENT EXAMPLES

The UK ASA ruled that advertisements by Shell were misleading as to the overall climate and environmental benefits of their products and services. The UK ASA found that Shell had “omitted material information” by promoting sustainable plans such as renewable energy and net zero goals, without mentioning the pollutant impact of their wider operations.

OCTOBER 2022

NOVEMBER 2022

Goldman Sachs agreed to pay US$4 million to settle a claim by the US SEC alleging that certain funds and accounts were misleadingly marketed as ESG investments.

The UK ASA ruled that HSBC advertisements which promoted various environmental initiatives (e.g. that HSBC had planted 2 million trees) were misleading because, despite their technical accuracy, they misled customers as to HSBC’s overall climate impact (when it still financed fossil fuel companies).

OCTOBER 2022

Tlou Energy paid A$53,280 in infringement notices issued by ASIC (its first greenwashing enforcement action) relating to misleading sustainabilityrelated statements made to the ASX in October 2021.

MAY 2022

Police raided the Frankfurt offices of a bank's asset management arm, following allegedly misleading statements about ESG weightings in its portfolio.