Sustainability claims: 'Don't mislead, that will be big trouble'

Better for the planet! A more sustainable choice! If you develop or market a sustainable food product, as an entrepreneur you will naturally want to mention this on the packaging and in advertising. However, there are more and more rules attached to this.

Ebba Hoogenraad and Lisanne Steenbergen of law firm Hoogenraad & Haak know the opportunities and pitfalls when using sustainability claims. Lisanne: "Just shouting something? Those times are over." Ebba: "Sustainability can be anything. For instance, the product or production method can be better for the environment. But it also covers ethical issues, such as animal welfare and working conditions. This is why entrepreneurs should specify in their statement in what respect their product is sustainable. And you must have solid evidence for your claim on the record. It comes from the Unfair Commercial Practices Act: you may not mislead or omit important information. These basic rules have been in place for years, but more and more specific rules are being added for sustainability claims."

Practical advice 

Ebba: "Our law firm deals specifically with trademark law, copyright law, advertising law and food law, among others. We are used to thinking with our clients from the very first concept. In doing so, we not only indicate the legal boundaries, but especially what is possible. We have close contacts with relevant industry associations and are the only Dutch firm that is part of GALA, the Global Advertising Lawyers Alliance. Through that network, we can effectively do international checks." Lisanne: "For example, we ask lawyers in America to sort out a question of US law. Between EU countries, the exact elaboration and application of EU rules around food and advertising can also differ."

Control by ACM and RCC

Ebba: "In the Netherlands, non-compliance with sustainability rules can involve the Consumer & Market Authority (ACM), the Advertising Code Committee (RCC) and the courts. The ACM currently has a focus on sustainability claims. Recently, they intervened in sustainability claims in the clothing sector. So remember: if things go wrong and the ACM is breathing down your neck, it can lead to high fines." Lisanne: "The RCC cannot impose fines, but gives a recommendation to stop advertising in this manner. The RCC was set up by stakeholders from the advertising industry and handles complaints from consumers and businesses. This form of self-regulation works well in the Netherlands. In addition, competitors and NGOs are increasingly taking the matter to court; in the event of deception, a ban with penalty payment follows, and often also a rectification and thus reputational damage."

New Environmental and Sustainability Advertising Code

Lisanne: "The RCC relies on specific codes, such as the one for food and also one for sustainability claims. From February 2023, an updated version of the Environmental and Sustainability Advertising Code is in force. In it, the rules for sustainability claims have been made more concrete. One example is the term 'climate neutral'. This claim is now subject to an extreme burden of proof; it is almost impossible to sufficiently substantiate 'climate neutral'. So difficult even that reference to the eponymous label 'climate neutral' entails all kinds of strict requirements. The Board of Appeal of the Advertising Code Authority has ruled that a large dairy company may not simply use the claim 'climate neutral' on its own, but only in direct and visible connection with the label. For example: 'climate neutral in the sense of the label'."

Lisanne: "Make sure the substantiation of the claim is 100% in order before you communicate it. If you compare with a competitor, this is comparative advertising; even then you have to cross a high (evidence) fence. If you claim or suggest that your carbon footprint is lower than competitors, that has to be legally true against every possible competitor a consumer can think of." Ebba: "Saying that your current product is more sustainable than your previous product is also allowed. Or express an ambition, as companies do with the On the way to PlanetProof label. What you claim must be explained on the packaging; it should not be a vague claim. And what does not fit there, put it on a landing page on your website. Don't mislead, because then you will be in trouble."

Recyclable bottle?

Lisanne: "Complaints about plastic bottles provided interesting examples. A sauce manufacturer claimed that their bottle is 100% recyclable. The advertisement clearly showed that the label did have to be unzipped first. The RCC found this sufficiently clear. A soft drink manufacturer claimed that their bottles are made of '100% recycled plastic'. However, this did not apply to the cap and the label; only to the bottle part of the packaging. The RCC concluded in this case that a clear disclaimer was missing. In both cases, the question is: what does a consumer understand by a bottle? Do the cap and label belong to the bottle or not? Therefore, always put yourself in your consumer's shoes: how does the consumer interpret your expression?"

Sustainability claims as USP

Ebba: "Above all, I hope our tips create awareness among entrepreneurs. Choose which sustainability aspect you want to communicate, collect solid evidence, be honest, think carefully about your wording and have everything checked by legal. Then do you have a clear, catchy, provable claim? Then use it. That manufacturers are sustainable is important for a better world. If a strong claim fits that, it is a great way to stand out."

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