Sustainability claims and greenwashing in Norway
- The Norwegian Consumer Authority guidelines on sustainability claims in consumer marketing, and a new legislative proposal from the European Commission
- Increased focus on green claims in the fashion retail industry
- Increased awareness of greenwashing among industry participants and environmental non-profits
What are the top 3 developments in your territory concerning green claims and the associated risk of greenwashing?
Over the last couple of years, awareness of climate change and the need for consumers to make environmentally sustainable choices has significantly increased among Norwegian consumers and businesses. Consumers have become increasingly conscious about the environmental impact of the products they buy, and companies have correspondingly increased the use of green claims in their consumer marketing. Although improved communication on the environmental impact of consumption is welcomed by most, the use of unsubstantiated or misleading claims in marketing comes with the risk of regulatory scrutiny and reputational damage.
We have identified three important areas of development regarding green claims in marketing which companies operating in Norway should be aware of.
1. The Norwegian Consumer Authority guidelines on sustainability claims in consumer marketing, and a new legislative proposal from the European Commission
As a response to increasing use of green claims in consumer marketing, the Norwegian Consumer Authority (the “NCA”) has developed a set of guidelines for companies using green claims in marketing directed at Norwegian consumers. The purpose of the guidelines is to ensure that consumers are not misled, and to help companies comply with the rules on consumer marketing in the Norwegian Market Control Act (the “MCA”). The MCA is the main legal framework in Norway regarding consumer marketing and implements the EU directive 2005/29/EC on unfair business-to-consumer commercial practices. The NCA guidelines on green claims in consumer marketing are based on this legal framework. The guidelines therefore provide useful insight into how the NCA interprets the relevant legislation and how the legislation is enforced.
Furthermore, the guidelines provide a general overview of the most important rules on consumer marketing in Norway. This includes the general prohibition against unfair commercial practices and provisions on what constitutes misleading acts and omissions.
The guidelines also provide marketers with some dos and don’ts when using green claims in their consumer marketing; namely, it requires them to:
- Be able to provide adequate documentation for all green claims,
- Use accurate and truthful information,
- Not use vague and general claims without simultaneous clarification and
- Not oversell insignificant aspects of the environmental impact of a product or the production chain.
The guidelines also include a more detailed explanation of the requirements related to the substantiation of green claims in consumer marketing. If green claims lack adequate supporting documentation, they will normally be deemed misleading and thereby unlawful.
2. Increased focus on green claims in the fashion retail industry
Over the last couple of years, the NCA has increased its focus on how fashion retailers are using green claims in their marketing aimed at Norwegian consumers. In February 2020, the NCA sent a formal letter to 53 fashion retailers operating in Norway with information about the Norwegian legal framework regarding green claims in consumer marketing. The letter especially addressed the retailers’ use of general claims such as “green”, “sustainable”, and “ethical” without giving a specific explanation on why their products or collections had been given such characterisations.
The letter also addressed the use of environmental labelling schemes in consumer marketing, which the NCA has found to be a growing trend in the industry. The NCA acknowledges that labelling schemes can be an effective tool to communicate environmental or ethical qualities of a product or company. However, it has also expressed some general skepticism to private labelling schemes which have no governmental or regulatory approval. In any case, when using an environmental labelling scheme, the criteria for using the label must be verifiable, and the marketer must be able to document that the criteria are met.
Although the NCA has largely focused on how the fashion retail industry is using environmental claims in consumer marketing, the recent development testifies to a generally increased focus from Norwegian supervisory authorities on green claims in business-to-consumer operations.
3. Increased awareness of greenwashing among industry participants and environmental non-profits
The issue of greenwashing has been addressed not only by governmental authorities, but also among industry participants. In 2020, the Guide against Greenwashing was launched by various business and climate organisations. The guide contains 10 marketing principles and is intended to help businesses avoid allegations of greenwashing. As of June 2022, over 500 Norwegian businesses and organizations had signed the guide, pledging compliance with its principles.
However, awareness of greenwashing has also led to marketers being increasingly exposed to scrutiny from the public. There have been cases where non-profit environmental organisations and concerned individuals have alerted supervisory authorities to specific marketing schemes, leading to investigations into the activities of the marketers involved. Going forward, we expect this dynamic between supervisory authorities and the public to increase, making it even more important for companies targeting Norwegian consumers to tread carefully when using green claims in their marketing.
