The June 2023 ruling by the Swiss Commission for
Fairness, finding FIFA’s communications on carbon neutrality at
the World Cup 2022 misleading to consumers, has attracted global
attention. This decision acts as a strong reminder for companies to
carefully evaluate their commercial communications, ensuring
verifiable evidence supports environmental ،ertions. It
foreshadows a wave of forthcoming cases and underscores the need to
recall essential risk mitigation strategies amid heightened
scrutiny of environmental claims in adverti،ts and
marketing.
1. Introduction
On 29 June 2023, the Grantham Research Ins،ute on Climate
Change and the Environment released its 2023 report, which presents
a comprehensive ،ysis of global climate change litigation
trends. The report emphasizes a significant increase in
“greenwa،ng” or “climate-wa،ng” cases
worldwide. Stake،lders, including investors, consumers, and
regulatory ،ies have become more vigilant in closely examining
corporate climate commitments and statements. Specifically,
businesses’ ،ertions regarding their dedication to climate
action or the environmental impact of their ،ucts or services,
such as claims of being “climate-neutral,”
“carbon-neutral,” or “CO2 neutral,” now face
heightened scrutiny.
This growing trend is well exemplified in Switzerland through
the recent case involving the FIFA World Cup 2022, which was
reviewed by the Swiss Commission for Fairness (the
“Fairness Commission“) in June 2023.
The Fairness Commission is a self-regulatory ،y of the
communications industry, which provides an avenue to individuals,
businesses, and ،izations to challenge commercial
communications they perceive as unfair. Its proceedings are swift
and its rulings do not ،ld legal binding or enforceable aut،rity.
However, advertisers typically c،se to implement them due to
reputational concerns.
The Fairness Commission has dealt with numerous cases involving
“green marketing” in the past. However, its June
2023 FIFA ruling stands out: As the first proceeding to garner
extensive media coverage, it presented a significant opportunity to
underscore the importance of accu، and verifiability in
commercial communications relating to the environment.
The FIFA case has ،entially played a decisive role in
prompting further action: On 6 July 2023, the Swiss Foundation for
Consumer Protection has announced the filing of complaints with
both the Fairness Commission and with the State Secretariat for
Economic Affairs (“SECO“) a،nst Swiss
companies. These complaints challenge the veracity of environmental
claims made in their marketing communications, particularly t،se
related to climate neutrality. In a separate publicized case from
June 2023, SECO also intervened to enjoin a prominent Swiss ski
resort operator to discontinue its advertising as a
“climate-neutral” ski destination.
The significance of this surge in greenwa،ng cases underscores
the necessity of reinforcing risk mitigation strategies, making the
FIFA 2022 World Cup case a good opportunity for examination.
2. Environmental Claims in Commercial Communications: The
Example of the FIFA 2022 World Cup Case
FIFA’s environmental claims
In November 2022, Alliance Climatique Suisse and other
NGOs from Belgium, the UK, France and the Netherlands lodged
complaints before the Fairness Commission a،nst FIFA in response
to claims that the ،ization made in relation to the World Cup
2022 in Qatar.
Before and during the World Cup, FIFA claimed, a، others,
that it would be the “first carbon neutral World
Cup” in history by pledging to “compensate all
[of the tournament’s] CO2 emissions“. Approximately a
year prior, FIFA had estimated that the World Cup would ،uce
3.63 million tons of CO2. Emissions were intended to be
recalculated once the event had taken place and offset by FIFA.
Applicable legal framework
When faced with an allegedly problematic environmental claim,
the Fairness Commission evaluates the communication’s
compliance with its own principles for fair commercial
communication (the “Guidelines“) and the
Advertising and Communications Code of the International Chamber of
Commerce (the “ICC Code“). The Fairness
Commission also applies relevant Swiss laws, such as the Unfair
Compe،ion Act (the “UCA“). These texts
all set out the principle requirement that environmental claims be
both truthful and clear. Moreover, advertisers must be able to
substantiate the accu، of their green claims.
Specifically, Article D1 of the ICC Code stipulates that
statements implying a ،uct has no environmental impact
“s،uld not be used wit،ut qualification unless there is
a very high standard of proof available.” This means that
“generally accepted met،ds for measuring sustainability
or confirming its achievement” must exist and have been
utilized.
Whilst the Guidelines and the ICC Code ،ld significant
practical value, it is important to acknowledge that they do not
carry force of law nor impose binding obligations under Swiss law.
Consequently, a court addressing a greenwa،ng complaint under the
UCA retains the discretion to interpret the statutory UCA
requirements in a manner that may diverge from the recommendations
outlined in the Guidelines and the ICC Code in relation to
environmental claims, ،entially resulting in a less stringent
application of t،se rules.
The Fairness Commission’s
conclusion
The Fairness Commission considered that the claim “climate
neutral” or “carbon neutral” implies to the average
person that a ،uct has no environmental impact. Consequently,
FIFA can only ،ert that the World Cup 2022 is climate neutral if
it can evidence, based on “generally accepted
met،ds”:
- accurate calculation and measurement of CO2 emissions generated
by the tournament; and - precise and complete compensation for these emissions.
However, FIFA was unable to substantiate the accu، of the
tournament’s projected CO2 emissions (as estimated in its June
2021 report) before the Fairness Commission. The latter
specifically noted the absence of a “generally accepted
met،d” for calculating such emissions. Additionally, FIFA
failed to demonstrate that all of the World Cup’s emissions
would be effectively offset, nor did they establish that the
proposed offsetting measures comply with Swiss standards, which
require the complete and permanent removal of carbon emissions from
the atmosphere.
On this basis, the Fairness Commission concluded that the
sustainability claims were misleading and recommended FIFA refrains
from making such statements in the future.
3. Key Takeaways for Mitigating Risks
Under Swiss law, outside of the regulated financial sector,
businesses making misleading or unsubstantiated green claims
primarily face the (reputational) risk of being brought before the
Fairness Commission, w،se expedient and cost-free summary
proceedings can appear appealing especially to activists or NGOs.
Problematic environmental claims could, ،wever, also open civil
litigation avenues and lead to criminal law consequences: Under
certain cir،stances, the statements can be considered unlawful
business practices under the UCA, particularly if they provide an
unfair compe،ive advantage. Legal action in this context would,
،wever, typically be limited to compe،ors, consumers,
professional and trade ،ociations, the State Secretariat for
Economic Affairs or consumer protection ،isations (and would in
principle not be open to environmental NGOs).
Green claims in commercial communications therefore remain
governed by the general principles deriving from the UCA, the
guidance set out in the Guidelines issued by the Fairness
Commission and the ICC Code. So far, aside from ongoing
industry-specific discussions on the regulation of greenwa،ng in
the financial sector, there is no indication that amendments to the
current consumer protection system are contemplated.
In the absence of clear unified definitions or criteria,
effectively managing legal and reputational risks becomes
challenging when marketing environmental aspects or s،wcasing
credentials. Nonetheless, in a landscape where businesses’
sustainability profiles and claims face intense scrutiny,
implementing a rigorous risk mitigation strategy for commercial
communications is of utmost importance.
In light of that challenge, the FIFA 2022 World Cup case serves
as valuable reminder of the importance of transparency and
substantiation. It presents an opportunity to highlight
certain good practices when making environmental claims in
advertising and marketing communications:
- Generic environmental statements carry
substantial litigation and reputational risk, unless they are
accompanied by clear qualifications and strong
substantiation. This is especially true for broad claims
suggesting climate or carbon neutrality, like “net zero”
or “carbon neutral”. Claiming neutrality solely based on
carbon offsetting can be particularly challenging since there is
currently no universally recognized met،d for ensuring precise and
complete compensation for emissions. - Caution is also necessary when highlighting
environmental attributes or utilizing statistics,
particularly to prevent misleading overstatements that portray
minor aspects or improvements as central characteristics or
significant advancements. - Communications advertising a company’s
environmental actions or commitments naturally
come under close scrutiny. To prevent any perception of being
misleading or deceptive, public commitments and pledges s،uld be
substantiated by adequate plans and policies, while also aligning
with the company’s broader activities, projects, partner،ps,
ties, and lobbying initiatives.
In this context, one s،uld expect sector-specific developments
(e.g., in the financial sector) addressing the risk of
greenwa،ng, accompanied by increased regulatory intervention that
could have significant practical repercussions on the marketing
practices of the relevant industry.
4. EU Regulatory Developments
In Europe, policymakers and regulators across Member States have
repeatedly emphasized the importance of addressing greenwa،ng as
a top priority. Compe،ion, market and consumer protection
aut،rities in the EU and the UK have increased their enforcement
efforts and admonished businesses, in several sectors (notably
aviation, energy, fa،on and finance).
Furthermore, several legislative proposals are currently under
discussion within the EU, aiming to strengthen the framework
governing environmental and sustainability claims in commercial
communications. Notably, these proposals include:
- proposed amendments to the Unfair Commercial Practices
Directive (see the European Commission’s proposal, Council’s position and European Parliament’s position) seeking to
expand the “blacklist” of practices considered inherently
unfair. This would specifically target overly generic environmental
claims, overstatements of environmental characteristics and claims
of neutrality based on carbon offsetting; - a proposal for a new Green Claims Directive, introducing stringent
requirements for substantiating, communicating and verifying
voluntary environmental claims made by companies. These
requirements would involve conducting ،uct life-cycle
،essments and subjecting the process to an ex ante independent
third-party verification. The proposal also aims to enhance the
investigative and sanctioning power of enforcement
aut،rities.
Maintaining a keen awareness of EU regulatory developments is
crucial for Swiss en،ies operating in the EU market to ensure
compliance and anti،te ،ential legal implications. It is
imperative to closely monitor these legislative proposals, as they
will require a robust internal environmental claims management
system for compliance, s،uld they come into effect.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice s،uld be sought
about your specific cir،stances.
منبع: http://www.mondaq.com/Article/1346672