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Sustainability, Advertising and Greenwashing – the Italian view

The fight against climate change is a major challenge for industry.

Companies in the industrial sector are aware of the increased sensitivity of consumers to sustainability since the environmental impact of their products is one of the key factors influencing commercial choices and purchasing decisions. However, because of the growing importance of the criteria by which a product can be considered "sustainable", advertising messages emphasising the environmental virtues of a product with the aim of making it more attractive must be formulated in a way that ensures consumer protection.

The Italian Institute of Advertising Self-Regulation (Istituto di Autodisciplina Pubblicitaria – IAP), as the regulating body for the entire advertising sector, tackled the issue of advertising communications regarding the protection of the natural environment, introducing into its own Code of Regulation a rule that commercial communications claiming or suggesting environmental or ecological benefits must be based on truthful, pertinent and scientifically verifiable evidence and must allow for a clear understanding of the characteristics of the advertised product or service, which the claimed benefits refer to.

When advertising their products, companies often use terms such as "sustainable", "ecological", "environmentally friendly" or "zero impact" with the aim of attracting the attention of sustainability-conscious consumers. Greenwashing (i.e.the marketing strategy of giving an environmentally positive image to a company or a product even in default of objective criteria or reliable or verifiable scientific data) is an example of misleading advertising that can result in sanctions.

Large companies operating in the consumer products sector are closely regulated. The Italian Competition Authority (Autorità Garante per la Concorrenza ed il Mercato – AGCM) plays a key role in protecting consumers from misleading advertising in messages promoting the environmental virtues of products that are actually highly unsustainable.

Some notable decisions involved mineral water firms presenting their products as environmentally sustainable by using what they claimed to be better performing bottling materials (e.g. ones with less plastics) and consequently lower amounts of energy in the production of these materials. However, inadequate evidence for the reliability and truthfulness of the advertisements led the AGCM to rule that the claims were misleading.

Another significant case in terms of the fine issued (EUR 5 million) concerned a multinational company involved in fuel production that issued an advertisement claiming the positive environmental impact of a certain type of fuel due to its characteristics, fuel savings and reductions in gas emissions. The AGCM found that these claims were not substantiated.

In order to avoid the misleading effects of Greenwashing practices, advertising communications must be objectively verifiable or validated by independent third parties. All advertising about the sustainability of a product must be appropriate and correct since the eradication of Greenwashing is an important part of the global response to the current climate emergency.

Authors

Paola Ghezzi
Paola Ghezzi
Partner
Rome
Massimo Alpigiani
Massimo Alpigiani
Senior Associate
Milan