Sweden - Sustainability claims and greenwashing

• Green claims and the Swedish Consumer Agency 
• Vague green claims and climate labels 
• Substantiating green claims  

What are the top three developments in your territory concerning green claims and the associated risk of greenwashing? 

As consumers are becoming more conscious about their environmental footprint when purchasing goods or services, it is becoming increasingly important for companies to position themselves as environmentally friendly. This is particularly true in Sweden, where there is a strong tradition of being at the forefront in climate-related issues and where consumers are keen to make environmentally friendly purchasing decisions. However, companies that make misleading claims about their environmental impact risk getting a very bad reputation among Swedish Consumers, in addition to the legal sanctions that can follow from such misleading claims.  

Below, we have identified three trends to keep in mind when making environmental claims directed towards Swedish consumers.  

1. Green claims and the Swedish Consumer Agency  

In Sweden, we have seen an increased number of court cases concerning misleading green claims in advertising during 2022-2023, partially as a result of the fact that green claims currently are a focus area for the Swedish Consumer Agency (Sw. “Konsumentverket”). Any entity planning to include green claims in its advertising must carefully evaluate how the claim is perceived by the average consumer, retain evidence and be aware that there is a tangible probability that such claims will be scrutinized by Konsumentverket. 

Konsumentverket has recently concluded a comprehensive review (a so-called “sweep”) of randomly selected companies within the solar panel industry and their use of green claims in the marketing of solar panel installations. The sweep showed, according to Konsumentverket, that there is a tendency among companies within the solar industry to use vague and unqualified claims such as:  

• Clean electricity (Sw. Ren ström) 
• Green electricity (Sw. Grön el)  
• Clean energy (Sw. Ren energi)  
• Sustainable (Sw. Hållbart) 
• Sustainably produced (Sw. Hållbart producerade)  
• Fossil-free society (Sw. Fossilfritt samhälle)  
• Good for the environment (Sw. Bra för miljön) 

As will be elaborated below, it is problematic to use general claims about a product’s environmental benefits without any explanation (qualification). Based on Konsumentverket’s sweep, it seems that the word “renewable energy” (Sw. förnyelsebar energi) is less controversial, as it is easily understandable for the average consumer.  

2. Vague green claims and climate labels   

A vague or ambiguous green claim, e.g. “environmentally friendly”, “green”, “sustainable”, must be explained (qualified). Recent case law from the Swedish Patent and Market Court of Appeal (“PMCA”) suggests that the explanation or disclaimer shall be placed in immediate proximity to the green claim. Hence, it will not suffice to only provide such an explanation through a website or QR-link. However, it is certainly advisable for advertisers (in addition to an immediate explanation) to provide more detailed information on, for example, a website or through a QR-code.  

If an explanation is missing or if the explanation is not sufficient, the advertiser must be able to substantiate all reasonable interpretations of the green claim. Depending on how the claim is perceived by the average consumer, the advertiser must show that all parts of the product’s lifecycle, from raw material extraction and manufacturing to waste management (including transportation and energy consumption in every stage), has no climate impact or less climate impact than competing goods/services. Otherwise, the claim will be deemed misleading. In practice, this is very difficult, as it requires a lot of evidence. 

When it comes to climate labels and other climate certifications, the PMCA has stated that the average Swedish consumer cannot generally be expected to know the meaning or significance of various private climate labels/certifications and that such labels/certifications must be clarified. Such explanation shall be made in immediate connection to the label. It will not suffice to solely directing consumers to a separate website or QR-code for further information. It is somewhat unclear how much detail is required in the qualification. Konsumentverket seems to take the view - based on how Konsumentverket has argued in cases concerning climate labels - that the most relevant criteria for the climate label should be explicitly stated in the advertising material. 

In exceptional cases, where the label/certification comes from a well-established and credible labelling/certification system, no explanations are required. Whether an ecolabel comes from a well-established and credible labelling/certification system is a matter of evidence, and the burden of proof lies with the advertiser. In this context, it should be noted that neither the PMCA or the Patent and Market Court (“PMC”) has specified the criteria that must be met for a labelling/certification system to be considered well-established and credible. The PMCA has however stated that no additional explanations are needed when using the Nordic ecolabel “Svanen” and the EU Ecolabel. 

3. Substantiating green claims  

An advertiser must be able to provide evidence supporting its green claim. The PMCA has established that the average Swedish consumer has difficulties in critically evaluating and assessing the plausibility of green claims and, therefore, sets very high evidentiary standards on the substantiation of such claims. The prospects of successfully substantiating a green claim is depending on how the claim has been presented to the average consumer. As mentioned, if the green claim is general and unqualified, the advertiser must prove all reasonable interpretations at hand. Case law implies that this is very difficult to prove.  

Under the principles of free presentation and free evaluation of evidence, which are applicable in Swedish procedural law, an advertiser is entitled to submit any evidence to the court, which will then be evaluated at the discretion of the court. As a consequence, it is not possible to state the specific evidence required to successfully substantiate a green claim. Nonetheless, recent case law from both PMCA and the PMC, provide some indications in this regard. 

Case law  

In March 2022, PMC decided that the claims made on a construction company’s website were misleading. The claims suggested that using the company’s products would contribute to the reduction of the CO₂ emissions and other greenhouses gases, and that its building solutions contributed to the reduction of emissions of climate gases. The company argued that the storage of carbon dioxide during the lifetime of the products was greater than the emissions caused by the product, which could be demonstrated by a calculation method called “dynamic lifecycle analysis”. According to this method, emissions that are estimated to occur after a lifespan corresponding to or exceeding 100 years are not considered to have any climate impact. The climate impact of emissions between year 0 and 100 is considered to be linearly decreasing. When applied to the company’s products, the method meant that the products were considered to emit only 40 percent of the stored carbon dioxide when burned after 60 years (which is the lifespan of wood fibre insulation), compared with 100 percent, if the products had been burned directly. 

The PMCA noted several issues with the company’s arguments and evidence. The Court pointed out that the reliability of the dynamic lifecycle analysis was questioned by an expert who had been heard in the case. Based on the evidence presented by the company, the Court could not draw any conclusions that the dynamic lifecycle analysis was, at the time of the advertising or at the time of the court hearing, a generally accepted and recognised method for measuring and comparing different construction products’ emissions of carbon dioxide and other climate gases. Instead, it appeared from articles presented as evidence in the case that the dynamic lifecycle analysis was not a commonly used method for calculating climate emissions. 

In view of the foregoing and the fact that the company had not presented any other evidence that was directly aimed at showing that the company’s products contributed to lower emissions of carbon dioxide and other greenhouse gases than comparable products, PMCA concluded that the green claims were misleading.  

This case illustrates that any evidence substantiating a green claim must directly pertain to the advertised products in question. General documentation that a product category has certain climate benefits will not suffice. The case also shows that any calculation of climate impact and climate benefits must be based on universally recognized calculation models.  

In February 2023, the PMC ruled that a food company’s widespread use of the claim “NET ZERO CLIMATE FOOTPRINT” on the packaging of its products was not supported by sufficient evidence and thus misleading. The company argued that the climate emissions caused by the production of the products in question were fully off-set by climate credits that the company bought from organisations which undertook climate compensatory measures, such as planting trees and preventing deforestation, and that the net-zero claim therefore was accurate. The company had used the metric Global Warming Potential 100 (GWP 100) to calculate the climate impact over 100 years and purchased climate credits to offset this impact. The PMC noted climate offsetting is a relatively nascent field, making it difficult to draw solid conclusions from similar projects. PMC also took issue with the claim’s 100-year timescale, pointing out that it is impossible for any living person to oversee such an extended period. Lastly, the court was not convinced that the effects of the company’s compensatory measures would indeed be enduring. Even though the company based its calculations on recognised standards, it failed to substantiate the net zero claim.  

This case illustrates the problematic nature of using GWP 100 to calculate climate impact and climate compensation as a measure to compensate for any calculated impact. Even though the case was decided by the PMC (lower court), companies may consider calculating their climate impact by using another metric, where the timeframe is considerably smaller. Companies should also not rely too much on purchasing climate credits to offset its climate impact.  
 

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As global heating and other environmental issues have come to the forefront of public consciousness in recent years, with extreme weather events and increasingly urgent warnings about the damage humans are doing to the planet, consumers have taken a greater interest in the environmental impact of the products they buy and use. Dozens of surveys have revealed that consumers prefer en­vir­on­ment­ally-friendly products, and that they are willing to pay a premium to get them. Naturally, business have responded to this concern, with brand-owners increasingly highlighting the benign or even beneficial effects their products and services have on the natural world. However, environmental issues are highly technical, and therefore raise a significant risk of confusing and misleading consumers, who may be persuaded to part with their cash to obtain products whose environmental benefits may be less than they appear. 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The features compared should be material and representative, and also “veri­fi­able”, which requires the detailed basis of the comparison to be disclosed proactively, either in the advertising itself or by way of a “signpost” in the ad directing readers to the source of information.  

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