Consumers are becoming increasingly aware of the potential sustainable impact of their purchases. It is not surprising that "sustainable", "green", or “eco-friendly” products have become more popular than ever. Ads promoting "sustainability" often lack substantive information about the global environmental impact of the advertised product - and thus lead to incorrect conclusions. Furthermore, marketers regularly do not have sufficient and substantive evidence that the "eco-friendly", "green" or "sustainable" product will cause no environmental damage across its entire life cycle, from manufacture to disposal. This leads to "greenwashing", a term defined as "the act of misleading consumers regarding the environmental practices of a company or the environmental benefits of a product or service". Why? In large part because the terminology used is too vague and lacks formal definitions. And because the terminology used can convey different meanings to different people. As a consequence, it is difficult to assess from a legal perspective whether the claims are still within what is considered "fair competition" under local unfair competition laws, or whether they go beyond and breach honest business practices.
In recognition of how easily such claims can become misleading, even unintentionally, sustainability claims are coming under increased scrutiny, not only from competitors or consumer protection associations. Advertising and marketing authorities and legislators across the globe are closely monitoring the situation - and as sustainable marketing is not only a trend but a valuable tool to differentiate products and services, sooner or later stricter guidelines will be incorporated into laws and severe penalties will be imposed on breaches, similar to what we have been experiencing in the area of health and nutrition claims or data privacy. Will the "General Sustainability Protection Regulation" soon become the new GDPR?
European Commission revealed that national consumer protection authorities had reason to believe that in 42 percent of cases of companies making “green” claims, the claims were “exaggerated, false or deceptive.”