Austria - Sustainability claims and greenwashing

• Austrian Consumer Association conducts “greenwashing check” campaign to clamp down on unsubstantiated and misleading green claims
• Sustainability labels and logos come under the Consumer Association’s spotlight
• Stricter origin labelling rules to be introduced for the Austrian food industry

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

Austrian consumers are willing to spend more on environmentally friendly products and services. For example, in a study conducted in 2019, one-third of Austrians surveyed showed themselves willing to pay a higher price for environmentally friendly packaging. Correspondingly, many companies have switched to advertising the environmental friendliness of their products and services rather than focusing on price or quality. While so-called green claims are becoming more and more popular, accusations of greenwashing are likewise increasing.

We have identified the three most important trends to watch out for when making green claims that are addressed to Austrian consumers.

1. Austrian Consumer Association conducts “greenwashing check” campaign to clamp down on unsubstantiated and misleading green claims

The Austrian Association for Consumer Information (“VKI”) has launched a campaign focusing on green claims that includes a so-called “greenwashing check”, allowing consumers to report green claims they consider misleading. The VKI evaluates these reports (as well as problematic claims it has itself identified) and asks the advertiser for their comments. If the check shows that the advertisement is considered to be greenwashing, the result is published on the VKI website.

For example, the VKI has repeatedly criticised advertisers for their inability to substantiate the claimed environmental advantages of products or services, or for misleading consumers with vague or inaccurate statements about the asserted environmental friendliness of a product. In a recent case, the VKI assessed a claim regarding the recyclability of a beverage container. It found that while the container was in principle recyclable, the beverage producer had failed to provide sufficient information about the recyclability of the packaging. In another case, it challenged the claim that a ballpoint pen was 100% recyclable, arguing that recycling may be theoretically possible but practically impossible due to lack of a collection and recycling system for such products in Austria. Most likely influenced by the current situation in regard to energy, the VKI has lately also focused on advertising claims by energy suppliers. These suppliers have been promoting their products as e.g. “climate neutral” while achieving such goal only by way of off-setting. This tactic has been addressed with strict scrutiny by the VKI.

The VKI’s greenwashing campaign is very effective and has been noted by several other associations as well as in the media. An adverse ruling can therefore result in considerable reputational damage for the company concerned. In addition, associations such as the VKI are entitled to take legal action against companies that use green claims that violate Austrian law.

2.  Sustainability labels and logos come under the Consumer Association’s spotlight

There has been an increase in the use of labels and logos which are intended to demonstrate the advertiser’s sustainability. Some of these logos have been designed by the advertiser for its own products or one of its product lines, while others have become a recognized standard in a specific industry for certain types of products through widespread use over time. Many of these labels and logos are registered as trademarks.

However, using such labels or logos can be risky. Consumers could be misled, for example, if the use of a sign creates the misleading impression that a product is generally environmentally friendly.

In addition, such labels may require the advertiser to complete a certification procedure and possibly pay a fee before being eligible to use the label to advertise its products. It is not only important for businesses to comply with the required certification process, but also for consumers to have confidence that the certification has been awarded subject to transparent criteria in an objective procedure.

The VKI has put its focus on such labels recently. It has already criticised several environmental labels supposedly certifying the sustainability or climate-friendliness of a service or product, because the certification procedure in which these labels were awarded was neither transparent nor objective.

3. Stricter origin labelling rules to be introduced for the Austrian food industry

Austrian consumers not only value sustainable production, but also tend to prefer regional products. The general public generally considers locally manufactured products as being of higher quality and more environmentally friendly – and this is especially relevant for food products.

While the food sector is already heavily regulated by EU law, the Austrian legislator has taken steps to implement further requirements locally. In 2022 mandatory origin labelling on processed products and in public catering (such as in hospitals, retirement homes and schools) concerning the basic ingredients of meat, milk and eggs were introduced, which are planned to be implemented by mid-2023. Those rules demand the disclosure of where the processed animal or the relevant ingredient, such as milk, originates from. This information needs to be provided on the packaging of the product or the caterer’s menu. For now, however, the private catering sector has not been included in these new regulations.

Moreover, since July 2022, Austrian farmers have been required to pass on information on the origin of their products within the supply chain. It is anticipated that these new requirements will also impact the way food products can be advertised to consumers.

At the same time, the legislator has set out additional requirements for the husbandry and transportation of animals. The amendment to the Animal Transport Act includes, among other things, a ban on the export of cattle for slaughter to certain countries and restrictions on the duration of the transport of calves. In addition, husbandry of animals will need to meet further requirements in the future, such as an increase in the space available to the animals. While violations of these provisions will trigger administrative fines, the new rules will also impact the assessment of advertising relating to ethical sourcing of produce and animal welfare. These heightened standards will mean that products may no longer be advertised as being “animal friendly”, if they only fulfil, but do not exceed, the new requirements, because such claims would create the misleading impression that the advertiser is acting in a manner that is particularly beneficial for animal welfare, whereas all companies will be obliged by law to follow the same standards of animal care.

Read latest news on sustainability claims and greenwashing in Austria here.

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