Hungarian Competition Authority Helps Undertakings to Avoid ‘Greenwashing’

This article is a follow-up to our previous report on ‘greenwashing’.

In recent years, ‘greenwashing’ has become important to environmentally conscious customers and a real challenge to the companies who try to meet consumers’ expectations and the legal requirements at the same time.

To support the green-minded undertakings, the Hungarian Competition Authority (HCA) has published some guidance on the criteria to be kept in mind when designing ‘green’ advertisements.

First, the guidance provides a general checklist which can be a helping hand to the undertakings during the planning and performing of their ‘green’ advertising.

Most importantly, green statements should be easily understandable for consumers and must be true and verifiable based on solid, independent and well-supported evidence, which takes into account the latest scientific findings and methods. It is advisable to provide opportunities for consumers to verify the veracity of the green claims themselves. Undertakings should also aspire to continuously review their green claims to ensure that those statements are always up-to-date.

Companies should also communicate sustainability results already achieved, rather than commitments related to future performance. Furthermore, they must avoid claiming that an environmental benefit is unique if it is in fact available to consumers anyway as a result of legal provisions or typical market practices.

Secondly, the guidance emphasizes the importance of the proper use of certification labels which state that the product, service or operation of an undertaking has a positive effect on the environment. First and foremost, undertakings must ensure that the message conveyed by the advertisement does not extend beyond the scope of what the certification label is intended to certify so that the use of the label is not misleading for consumers.

Thirdly, the guidance classifies the most typical green claims and discusses potential issues that may arise in connection with them: (1) claims related to the makeup of the product, such as “bio” or “refillable”; (2) claims related to the production processes, such as “made with renewable energy” or “carbon neutral”; (3) green claims about the future, such as “degradable” or “compostable”; and (4) comparative claims and claims about the market leading status.

In part 3 of our newsletter, we will give you an overview of these considerations discussed by the HCA’s guidance.