The Consumer Authority’s guidance on sustainability claims used for marketing purposes

1.1 The Consumer Authority in brief

The Consumer Authority (CA) is a public supervisory authority whose purpose is to make the marketplace a simpler and safer place for consumers.

The CA protects consumers’ interests by preventing and putting a stop to unlawful marketing, unfair contract terms and conditions and other practices that are in breach of the Marketing Control Act.[1] The CA also ensures that traders comply with consumer protection rules set out in the Cancellation Act, the Financial Contracts Act and several other statutes.

1.2 About the guidance

This guidance has been prepared for traders, in any industry, who emphasize environmental or ethical features in their products when marketing them to consumers. It applies to environmental/ethical claims made on behalf of a whole enterprise, as well as to claims made for individual products.

To enable consumers to make conscious and informed choices, it is important for traders to provide accurate information about the product and its ethical and/or environmental advantages.

The purpose of this guidance is to protect consumers against misleading information, and to encourage traders to conform with the Marketing Control Act when using ethical and environmental claims in their marketing. The guidance is also designed to ensure consistency and fairness when the CA rules on individual cases.

The guidance explains how the CA will enforce the Marketing Control Act where sustainability is used as a feature in marketing to consumers. The guidance does not address any specific statutory requirements for the marketing process, product features or labelling etc. that are the subject of special legislation.

The guidelines in this document are not regulations and are not all-encompassing.

The examples provided are purely intended to illustrate particular arguments and must not be interpreted as definitive answers about what is allowed or not allowed.

Traders who are in doubt about whether their marketing complies with the Marketing Control Act may contact the CA for advice. The CA is not equipped to approve marketing plans in advance, but can advise on the requirements that apply.[2]

1.3 Definitions and terminology

‘Product’ in this guidance means any goods or services including immovable property, rights and obligations.[3]

‘Sustainability, environmental and ethical claims’ means use of statements, information, symbols, images, certification schemes etc. in connection with marketing that give the impression that a product has ethical or environmental qualities, or that an enterprise pays particular attention to ethical or environmental matters. The terms ‘environment’, ‘ethics’ and ‘sustainability’ are used interchangeably in this guidance, but refer to the same types of marketing claims.

The use of ‘shall’ or ‘must’ in the guidance infers that the CA considers the marketing to be subject to unambiguous requirements. The traders must presume that their marketing will be subject to these requirements, unless it can be shown in a particular instance that special factors point to a different solution for a specific business or industry. The use of ‘should’ indicates a recommendation. The CA has not taken a definitive stance on whether non-compliance with this type of recommendation will be unlawful in every instance, but such cases may well be deemed misleading.

2.1  About the Marketing Control Act in general

This guidance mainly concernes the prohibition against unfair and misleading commercial practices, as regulated in Sections 6, 7 and 8 of the Marketing Control Act. Reference is also made to the requirements for good marketing practice and documentary support for marketing claims set out in Section 2 and Section 3 second paragraph, respectively.

The Marketing Control Act implements several EU directives, including the Unfair Commercial Practices Directive (Directive 2005/29/EC). The Directive contains fully harmonised rules for marketing, including the prohibition against unfair commercial practices included in Section 6 of the Marketing Control Act. The European Court of Justice’s interpretation of the Directive must therefore be taken into account. Practice in other EU/EEA countries may also be of interest.

The CA considers marketing through the eyes of an average, reasonably well-informed, careful and knowledgeable consumer.[4]

2.2 Prohibition against unfair commercial practices – Section 6

Section 6 first paragraph of the Marketing Control Act prohibits ‘unfair commercial practices’. The second paragraph of the provision specifies that a commercial practice is ‘unfair’ if it:

• conflicts with ‘good business practice’ towards consumers, and
• is likely to materially distort the economic behaviour of consumers, causing them to make decisions they would otherwise not have made.

If a commercial practice is to be deemed unfair, both of these conditions must be satisfied.

The Regulations relating to Unfair Commercial Practice, authorised under Section 6 fifth paragraph, contain the types of cases that will always be deemed unfair and are therefore prohibited. This ‘blacklist’ follows from Annex 1 of the Unfair Commercial Practices Directive. The following points from Section 1 of the Regulations may be of particular interest in the context of sustainability marketing:

•  Claiming to be a signatory to a code of conduct when the trader is not.
• Displaying a trust mark, quality label or equivalent without having obtained the necessary permission.
• Claiming that a code of conduct has an endorsement from a public or other body when it does not.
• Claiming that a trader (including its commercial practices) or a product has been approved, endorsed or authorised by a public or private body when it has not, or making such a claim without complying with the terms of the approval, endorsement or authorisation.

2.3 Prohibition against misleading commercial practices – Sections 7 and 8

A commercial practice will always be considered unfair and prohibited if it is misleading pursuant to Sections 7 and 8, cf. Section 6 fourth paragraph, of the Marketing Control Act.

2.3.1 Misleading acts pursuant to Section 7

Section 7 of the Marketing Control Act regulates misleading acts. Whether an act is misleading depends on whether the marketing material contains false information, or whether it is otherwise likely to deceive consumers, cf. Section 7 first paragraph (a)–(h).

Letters (a) and (b) are especially important in this context, as they state that the marketing is misleading if it is likely to deceive consumers about the existence or nature of the product, or its main characteristics.

When assessing whether marketing is misleading pursuant to Section 7, the starting point must be the overall impression formed by the recipient. Factually accurate claims may therefore be considered misleading because of the context in which they are presented. This condition therefore imposes requirements for both the content and the design of the marketing.

2.3.2 Misleading omissions pursuant to Section 8

Section 8 of the Marketing Control Act regulates misleading omissions. A trader’s marketing shall be deemed to contain misleading omissions if it omits or hides material information that consumers require to be able to make an informed economic decision, or if it presents the information in an unclear, unintelligible, ambiguous or unsuitable manner, cf. Section 8 first paragraph first sentence.

When considering whether information has been omitted, any limitations of space or time in the medium used to communicate the commercial practice shall be taken into account, as shall any measures implemented by the trader to make the information available to consumers by other means, cf. Section 8 first paragraph second sentence. The trader shall nevertheless ensure that consumers are given an accurate impression of the offer or product, so that omissions are avoided. The second sentence in Section 8 first paragraph does not relieve the trader of the obligation to inform consumers of any material limitations in the offer.[5]

The omission of information about the substance of sustainability claims used in marketing may, in the CA’s view, constitute a misleading statement in conflict with Section 8 of the Marketing Control Act.

2.3.3 The influence condition

Both Section 7 and Section 8 require that the marketing must be likely to influence consumers to make an economic decision that they would not otherwise have made.

2.4 Documentary requirement – Section 3 second paragraph

Section 3 second paragraph of the Marketing Control Act requires claims used in marketing to be documented. Documentation substantiating the accuracy of factual claims shall be in the possession of the advertiser at the time the marketing takes place. See 3.2 below for more information about the substance of the documentary requirement, when sustainability is used as a marketing feature.

2.5 Requirement for good marketing practice etc. – Section 2

Marketing shall also not conflict with good marketing practice, cf. Section 2 first paragraph of the Marketing Control Act. In the assessment, emphasis shall be given to whether the marketing offends against general ethical or moral views, and to whether it employs offensive means. It follows from the preparatory works to the Act that environmental claims are likely to be affected by Section 2 first paragraph and the term ‘good marketing practice’.[6]

2.6 Other regulations and guidance on the topic

Several international guidelines and self-imposed rules and standards have been prepared to govern environmental claims in marketing. Among other initiatives, the International Chamber of Commerce (ICC) has issued the ‘ICC Advertising and Marketing Communications Code’ (last revised 2018).[7] This includes their ‘International Code of Environmental Advertising’. The code also incorporates the international ISO standard for self-declared environmental claims (ISO 14021:1999).

The EU Commission also discusses the use of environmental claims in its guidance on the Unfair Commercial Practices Directive.[8]

3.1 Introduction

This chapter provides an account of the guidelines that can be derived from the statutory provisions in the field of sustainability marketing outlined above.

It is of general application to all types of sustainability claims in marketing. In addition to the claims that appear in this section, requirements for the use of promotion and visions are discussed in Chapter 4 and the use of certification schemes in Chapter 5.

3.2 The overall impression is crucial

When assessing whether marketing is misleading, one must start by considering the overall impression it is likely to have on consumers. In both content and design, the marketing shall give an accurate and balanced overall impression of the product or enterprise being marketed.

Claims that are factually accurate when seen in isolation may be considered misleading because of the context in which they are presented. Both statements and visual tools such as images, sounds, symbols, colour choices etc. may, when considered in an overall assessment, give the impression that the product or enterprise is advantageous in sustainability terms.

The overall impression may also be influenced by the way in which the sustainability marketing is communicated and the context in which the claims are presented.

3.3 It must be possible to document all claims

It must be possible to produce documentation to support factual claims about a product.[9] This documentary obligation must be seen in the light of the statutory prohibition against unfair and misleading marketing. If environmental or ethical claims used for marketing lack adequate documentary support, they will be deemed misleading and unfair and therefore prohibited.

Documentation substantiating the accuracy of factual claims shall be in the possession of the advertiser at the time marketing takes place. The point of departure is that the research or other documentation confirming the accuracy of the claim must have been carried out in advance and be available on demand.

There are requirements for the way in which documentation is produced. If the documentation is to have sufficient evidential value, the normal requirement is that the claims must be substantiated by an opinion or technical report from a recognised independent expert body. This means that research carried out by the manufacturer, or the enterprise marketing the product, must be reviewed by an independent body. Alternatively, it must be possible to confirm in some other way that the research was validly conducted and the evaluation of the result is defensible on objective, technical grounds.

There are also requirements for the content of documentation. The documentation must clearly and fully describe the specific claim made in the marketing. The requirements for the scope and content of documentation depend on factors such as the specific claim being made, and the type of product being marketed.

For example, the documentary requirement is more stringent for free-standing, general sustainability claims such as ‘environmentally friendly’, ‘green’ and ‘climate positive’ than for claims involving straightforward, precise product information. To justify using a general, free-standing sustainability claim, the trader must, as a rule, be able to produce documentation showing that the product causes significantly less harm to the environment than other products in the same class throughout its life cycle (‘cradle to grave’).[10]

It is also important for the documentation to be up to date and accurate throughout the period when the claim is used in the marketing of a product.[11] If new research is undertaken or new documentation comes to light that casts doubt on the previous conclusions, the claims must be reviewed in the light of the new documentation. If this means that the enterprise no longer possesses accurate and up-to-date documentation supporting the claims used during marketing, the marketing offer must be adjusted accordingly.

3.4 Accurate, clear and balanced message

3.4.1 Claims must be true

Sustainability claims made during marketing will be misleading if they contain inaccurate and untruthful information. For example, it would be misleading to use a product name that gives the impression that a product has special environmental qualities, if that is untrue.

Example: It would be misleading to describe an electricity supply agreement as ‘CO₂-free’ if the agreement is no more environmentally advantageous than other such agreements.

3.4.2 Do not use vague, general sustainability claims without simultaneous clarification

To ensure that consumers can make an informed purchasing decision, it is important for the marketing to give a precise and balanced impression of the product’s environmental and ethical qualities.

General claims that a product is ‘environmentally friendly’, ‘sustainable’ or ‘ethical’ etc. may encourage consumers to form positive associations and create the impression that the product has no – or a positive – impact on the environment.[12] Such claims are also ill-suited to giving consumers guidance about the product’s real sustainability advantages.

General claims of this nature can oversell the ethical or environmental qualities of a product, and the consumer may be left with the erroneous impression that the product is better that its competitors in several ways, when that is not really the case. As mentioned in 3.2 above, stringent requirements will also be imposed for documentation that supports the claim.

Accordingly, it will normally be misleading and in conflict with the Marketing Control Act to make free-standing, general sustainability claims (for example ‘environmentally friendly’, ‘green’ or ‘climate positive’) without simultaneously explaining the specific product qualities to which the claims relate.

Examples of free-standing environmental and ethical claims that will, in practice, often be misleading:

‘Environmentally friendly T-shirt’, ‘Sustainable flight’,

‘Make an ethical choice – buy product X’

3.4.3 Requirement to explain the product’s ethical or environmental advantages

If a general environmental or ethical claim is supplemented by an explanation that specifies the qualities of the product to which the claim relates, it will not normally be necessary to document the claim with a life-cycle assessment that applies to the whole product. The documentary requirement will then relate to the product qualities pointed out in the explanation.

There is a requirement for the explanation to be presented in such a way that consumers read it in conjunction with the general claim. This also applies when more nuanced claims such as ‘more sustainable’ or ‘less harmful to the environment’ are made.

The explanation must also give consumers an accurate picture of the product’s qualities. The explanation must not be ambiguous or unclear, as that increases the likelihood of the marketing as a whole misleading the consumers. For example, it must be clear whether the ethical or environmental benefit relates to the whole product or just parts of it, e.g. whether the claim applies to the product’s content or just its packaging.

It must also be clearly apparent whether the marketing claim in question applies to the trader’s whole business, or to one or more specific products offered by the trader.

It may be appropriate to present information in ‘layered’ form, so that the consumer does not receive the information all at once, but is told where further information can be found. However, this is on the condition that the explanation given in the first ‘layer’ of marketing is sufficiently precise to avoid misleading the consumer at this stage. If a layered presentation of the explanation is used, it will for example often be misleading to use free-standing, general environmental or ethical claims such as ‘climate friendly’, ‘fair’ or ‘sustainable’ with the explanation ‘one click away’ (in a hyperlink).

Example: If an item of clothing is made of 80% recycled materials, and this is the environmental benefit one wishes to emphasise, it would be more precise to provide this information immediately. After that, the reader can be linked to a page where he/she can read more about what the recycled material is, and why and how it makes the product environmentally advantageous.

3.4.4 Requirement for relevance

It is important not to overdo or oversell the ethical or environmental qualities that are highlighted in the marketing. This means that the marketing material must not point out immaterial aspects of the product’s environmental impact, or ethical matters that relate to an insignificant part of the product or its chain of production.[13] Sustainability claims that apply only to a marginal part of the product will easily mislead consumers into thinking that the claimed environmental or ethical benefits are even greater than they really are.

Where a product has a serious environmental impact, or has special ethical issues, a sustainability claim may readily be linked to an insignificant part of the product’s total impact. With such products, extra care must be exercised when using means that may give the consumer the impression that the product has ethical or environmental advantages.

In any case, it will be misleading to present services consumers are entitled to by law as being a special benefit conferred by a product or enterprise. For example, it would be misleading to present an electronics firm as environmentally aware because it takes electrical waste in return, when this requirement is established by law.

3.4.5 The product must be seen in relation to the wider market

When emphasising the ethical or environmental qualities of a product, it is easy to give the consumer the impression that the product is better than its competitors in this regard. Traders must therefore ensure that the marketing does not give this impression, unless they can document it.[14]

3.5 Use of means that appeal to emotions, fear or conscience

Marketing information should neither be designed to exploit consumers’ concerns about the environment, climate change or ethics, nor their possibly limited knowledge of environmental or ethical matters.[15]

More stringent rules are imposed by the Marketing Control Act for marketing directed at children, that can be seen or heard by children or is of special interest to children. When assessing whether a marketing initiative is in conflict with good marketing practice directed at children, close attention shall be paid to factors such as whether the marketing ‘employs frightening means or is likely to cause fear or anxiety’.[16]

4.1 Relationship to the other parts of the guidance

Chapter 4 addresses matters to which enterprises must pay special attention when their promotion and brand-building efforts involve ethical or environmental commitments. Chapters 1, 2, 3 and 6 of the guidance apply correspondingly when assessing enterprises’ promotion and brand building.

4.2 General points on promotion and brand building

The requirements in the Marketing Control Act also apply to promotion, when a trader seeks to establish an environmental or ethical profile through the use of slogans, visions or collaboration with non-profit organisations etc. in its marketing. A trader must therefore be aware that marketing claims made in this context must also be supported by documentation and must not mislead consumers. As with other marketing claims, the crucial factor is the overall impression formed by the average consumer as a result of marketing that plays on the enterprise’s profile, visions etc. However, there are some specific elements to which specific attention should be paid when using visions and future goals in marketing communication.

• It is particularly important to avoid intermingling information that relates to specific products with general information that applies to the whole enterprise. If specific products are presented alongside the enterprise’s future goals etc. in marketing material, this may give the consumer the misleading impression that the product is better from an ethical or environmental perspective than is really the case.
• The marketing initiative should be as specific as possible. Traders should refer to specific measures implemented by the enterprise, rather than make general claims about it being passionate about the environment or ethically sensitive. This is because information about specific measures and plans is more informative and enlightening for the consumer than vague statements about commitment and values.
• The marketing initiative must be seen in conjunction with the wider range of ethical or environmental measures implemented by the enterprise. It may be misleading to emphasise specific measures or certain aspects of an enterprise if this is likely to give the enterprise a better environmental or ethical profile than objectively merited by the organisation’s size and the scope of its activities.

Example of general, vague claims:

‘We give you a green head start’

‘We invest in a fairer world’

Example of a more informative claim:

‘We will reduce our total greenhouse gas emissions by 50%’

4.3 Particular points on future goals, visions etc.

Great care should be exercised when including information in the marketing material about the enterprise’s goals, visions or other future aspirations. Claims about what will happen in the years ahead will be uncertain by their very nature, and this can make it difficult to formulate marketing claims about future visions that are sufficiently precise and balanced. This especially applies to goals that the enterprise is a long way from achieving at the time when the marketing is carried out, or goals that are vaguely formulated in the marketing material.

In order for a trader to be able to use claims about future goals in its marketing, the company must have clear and well-defined plans for achieving these goals. Moreover, the claim must be formulated as specifically as possible.

An example of a goal that is vague and could easily be misleading: ‘We shall be climate positive by 2030!’

Example of a more informative goal: ‘We shall reduce our greenhouse gas emissions by 5% per year for the next 10 years.’

4.4 Good causes and working with non-profit organisations

If the enterprise claims in its marketing material that it supports good causes or works closely with non-profit organisations, the claims must be supplemented by clear information about the basis of the collaboration.

For example, if an enterprise states in its marketing that it donates a fixed sum to a non-profit organisation for every product sold, it must provide as much detail as possible, ideally as a monetary amount and/or the percentage of the product price that goes to the good cause.

The marketing material should clearly inform consumers where they can find further information about the collaboration, for example through a link to a website that contains more detail.

When the support/collaboration ends, all information about the support/collaboration shall be deleted from the marketing material, including packaging.

5.1 General information

This chapter discusses the use of certification labels or symbols for marketing purposes. The purpose of certification labels is to indicate that a product or enterprise has some form of environmental or ethical quality, benefit or certification.

Certification schemes can be a good way of providing consumers with information about the sustainability benefits of a product or enterprise. However, it is important not to use certification schemes in ways that can mislead consumers.

In order to avoid misleading consumers, a number of requirements need to be met when using certification schemes and labels for marketing purposes:

• The criteria for using the scheme or symbol must be verifiable.
• The trader must be able to produce documentation showing that the criteria are met. The documentation must be supported by research carried out by recognised independent expert bodies.[17]
• Information should be provided about where consumers can find further information about the certification scheme, for example on the enterprise’s website.
• Use of certification schemes must not lead to ‘greenwashing’ of a brand or product line. If only one or a few of the products in a product line are eco-labelled, the marketing material must clearly state which products this applies to.
• The certification scheme itself should also not be emphasised during marketing, apart from discrete use of scheme’s logo, if the product is no better than a significant proportion of comparable products on the market.[18]
• The marketing message must not be overdone. This means that the marketing must not give the impression that the merits of the certification scheme are greater than they really are.

Example: A label that only relates to the product’s packaging must not be used in a way that suggests it applies to the whole product.

Example: It could be misleading if a manufacturer of cleansing agents, which offers several agents under the same brand, markets the brand as Nordic Swan certified when, in reality, the eco-label only applies to one of the products.

5.2 Different types of certification schemes

There are a number of certification schemes in existence and they vary in popularity, recognition and quality. The certification schemes may be private initiatives, or official schemes that are approved or administered by public authorities.

Official certification schemes will often, to a greater extent than private schemes, impose requirements for independence, verification etc. as mentioned in 5.1 above. Consumers will receive clearer and more transparent guidance if the various producers join the same official certification scheme, rather than each having its own scheme.

The CA therefore recommends that traders use official certification schemes wherever possible.

An individual enterprise’s certification scheme is more likely to mislead consumers than an official scheme. It is more difficult for a private scheme to meet independence and verification requirements than is the case with an official scheme.

Consumers may easily be misled if there is a risk of confusion between a private and an official certification scheme. The same risk is present if a private certification scheme is used in a field where an official scheme is already in existence.

Examples of official certification schemes:

The foundation Ecolabelling Norway administers the two official ecolabels in Norway: the Nordic Swan label and the European Flower. See www.ecolabel.no.

Debio inspects and approves organic production in Norway. Debio approval is a condition for being able to claim that a product is organic, and for using the Ø-label for marketing purposes. See www.debio.no.

The Consumer Authority (CA) shall encourage traders to conform to the Marketing Control Act and other regulations overseen by the authority. In the event of a breach of the Marketing Control Act or other legislation that it enforces, the CA may decide to make a decision on prohibition or a prohibition order (Section 40), impose an enforcement penalty (Section 41) and, in certain cases, an infringement penalty (Section 42), cf. Section 39. The CA’s decisions can be appealed to the Market Council (Section 37).

Decisions may also be directed at persons or companies that aid and abet criminal offences (Section 39 second paragraph). The accessory liability includes physical persons, for example the general manager, chair of the board or board members of a company. It also applies to other companies that have contributed to the offences, for example advertising agencies that have assisted in designing the unlawful marketing material, and media or platforms that have communicated it.

To ensure compliance with a decision made pursuant to Section 40, the CA will impose an enforcement penalty on the person who is the subject of the decision, to be paid if the decision is not complied with (Section 41). The CA can decide not to impose an enforcement penalty if special circumstances so indicate. The enforcement penalty may be stipulated as a lump sum, a sum per violation or as a running charge (e.g. per day or week until the company complies with the decision).

The CA can also impose an infringement penalty for breaches of, inter alia, the prohibition against unfair and misleading commercial practices in Sections 7 and 8, cf. Section 6, and for breaches of the regulations relating to Unfair Commercial Practices, cf. Section 42 of the Marketing Control Act. The conditions for imposing an infringement penalty are that the infringement is intentional or negligent, is considered material or has taken place repeatedly. A decision to impose an infringement penalty may be made on its own, or simultaneously with a decision to impose an enforcement penalty pursuant to Section 41.

All persons are obliged to provide the CA with the information it requires, and the CA may also conduct investigations and demand that documents etc. be disclosed (Section 34). To ensure that orders to disclose information are complied with, the CA may stipulate an enforcement penalty (running charge or lump sum) to be paid by the person who is the subject of the order if it is not complied with (Section 41 third paragraph).

 

[1] Act of 9 January 2009 No 2 relating to the control of marketing and contract terms and conditions etc.

[2] See Section 3 second and third sentences of the Regulations relating to the Consumer Authority and the Market Council’s procedures etc.

[3] Cf. Directive 2005/29/EC of the European Parliament and of the Council, Article 2 (c).

[4] Proposition to the Odelsting (Ot.Prp.) No 55 (2007–2008) section 4.4.3.3 ‘Consumer – average consumer’

[5] See Proposition to the Odelsting (Ot.Prp.) No 55 (2007–2008) pp. 55 and 196.

[6] See Proposition to the Odelsting (Ot.Prp.) No 55 (2007–2008) p. 43.

[7] See Consolidated ICC Code of Advertising and Marketing Communication Practice.

[8] See Guidance on the implementation/application of Directive 2005/29/EC on unfair commercial practices.

[9] Proposition to the Odelsting (Ot.Prp) No 55 (2007–2008) p. 27

[10] In case no MR-1993-20 (Braun Norge AS), the Market Council and the then Consumer Ombudsman agreed that this principle must apply to free-standing environmental claims.

[11] The EU Commission’s Guidance on the implementation/application of Directive 2005/29/EC on Unfair Commercial Practices, p. 106

[12] The EU Commission’s Guidance on the implementation/application of Directive 2005/29/EC on Unfair Commercial Practices, p. 99

[13] The EU Commission’s Guidance on the implementation/application of Directive 2005/29/EC on Unfair Commercial Practices, p. 100

[14] See 3.2 above on the requirement for documentation.

[15] ICC Advertising and Marketing Communications Code 2018 – Article D1: ‘Marketing communication should be so framed as not to abuse consumers’ concern for the environment, or exploit their possible lack of environmental knowledge’.

[16] See Section 21 letter (c), cf. Section 2, of the Marketing Control Act. Also see the Consumer Authority’s guidelines on commercial practices targeting children and young people (in Norwegian only)

[17] Also see 3.2

[18] Also see 3.3.5