EDO welcomes the advertising industry body Australian Association of National Advertisers’ (AANA) revision of its self-regulatory Environmental Claims Code and associated practice note, and its publication of exposure drafts for public comment.1

AANA launched a review of the Environmental Claims Code in late 2022 in response to growing community concern about climate change and sustainability. In 2022, 2.3% of complaints to Ad Standards (the body that administers AANA’s codes) raised issues about environmental claims, up from 1.37% in 2021.2

Efforts to stamp out greenwashing as efficiently and comprehensively as possible, including in the advertising sector, are essential to tackling the urgent planetary crisis we currently face. Greenwashing erodes consumer confidence and public trust and can distort competition and misdirect investment from the products and services that support a more sustainable future.

Positive changes in the draft code

We commend AANA on several improvements that have been made in the draft code.

The definition of ‘Environmental Claim’ has been expanded to include representations about businesses and whole industries, from previously only capturing those about a product or service.

The practice note has also been amended to explicitly state that emissions intensive businesses, such as those that rely on or sell fossil fuels, should avoid making broad or unqualified claims. The practice note recognises the harm associated with overstating environmental benefits in such industries, stating that “the overall environmental detriment of these industries is likely to overshadow any environmental improvements made by a business.” EDO is pleased that AANA has for the first time provided specific guidance about environmental claims by fossil fuels companies as, in our experience, some of the most significant and harmful instances of potential greenwashing are seen in this industry.

We welcome AANA’s clarification that consideration should be had to entire life cycle implications, particularly in the context of broad claims, following in the steps of Australian regulators such as the ACCC, and advertising regulators in other jurisdictions, such as the UK ASA. For example, in a recent finding that an advertisement by a sustainability solutions provider in the aviation industry was misleading, the UK ASA considered claims in the context of the full life cycle of aviation operations as its services were linked with aviation, despite accepting that the advertiser did not own or operate any aircraft.3

While we consider AANA could go further in requiring that all claims are consistent with the best available science, it is promising that it has identified in the draft code that scientific claims should be consistent with the body of evidence and that claims relating to aspirational targets should be underpinned by realistic and verifiable plans in place to make them happen and measure progress. We consider AANA should take a broad approach in its interpretation of what constitutes a “scientific claim” given environmental claims are often underpinned by scientific concepts.

AANA has also made some improvements to better align its approach with the Australian Consumer Law, such as explicitly providing in the draft code that the overall impression created by an Environmental Claim should not be false or inaccurate. The practice note also indicates that small print should not conflict with the overall message of a claim, and that leaving out important details which qualify or contradict a claim may be misleading.

How the draft code could be improved

In our view, however, there are several changes which would strengthen the draft code. AANA may benefit from drawing on relevant expertise and guidance to ensure its approach to environmental claims and greenwashing risks is robust, consistent and up to date.

Firstly, AANA has not provided for any involvement or referral to experts. As many environmental claims relate to scientific concepts, it is important that science and expert scientific advice is used to assess claims. EDO considers it problematic that AANA’s Community Panel, which considers complaints under the draft code, is not equipped to undertake its own scientific analysis which may be necessary to determine the veracity of environmental claims. At a minimum, the draft code should provide for experts to be engaged to undertake scientific analysis where necessary.

AANA also has not incorporated the best available science and international best practice regarding net zero claims. Net zero claims are increasingly common among businesses but without a uniform approach, making it difficult for consumers to assess and compare claims. We are of the view that companies’ net zero claims should be expected to align with the recommendations of the UN High Level Expert Group on Net Zero Emissions Commitments of Non-State Entities report entitled “Integrity Matters: Net Zero Commitments by Businesses, Financial Institutions, Cities and regions”.4

We consider the draft code could also go further in detailing the substantiation, verification and communication requirements expected for environmental claims, for example when evidence underpinning a claim is expected to be available publicly.

While alignment with the Australian Consumer Law has been improved in the draft code, we are disappointed that AANA has not sought greater alignment as the extensive body of case law on misleading or deceptive conduct would offer greater clarity and guidance.

There are also some other practical matters that could be improved in the way the Environmental Claims Code works in relation to the Ad Standards process. For example, complaints can only be made about individual advertisements which may require the community to make several complaints about an advertisement that is broadcast across multiple mediums, such as radio, print, television and on social media sites. An adverse finding by Ad Standards also does not prevent a company from repeating the same representation.

We also note the importance of regular reviews of the code to ensure ongoing alignment with science and international best practice, as well as consistency with other regulators’ approaches to environmental claims.

Submissions

Submissions on the exposure draft code are open until 5pm on 22 March 2024 and can be made by email to [email protected]. More information is available on AANA’s website at https://aana.com.au/self-regulation/codes-guidelines/environmental-claims/.

1 Available at https://aana.com.au/self-regulation/codes-guidelines/environmental-claims/.

2 Ad Standards, Review of Operations 2022, https://adstandards.com.au/sites/default/files/adstds_review-of-operations_final_web_version.pdf.

3 UK ASA, ‘ASA Ruling on 4AIR LLC’ (30 August 2023) https://www.asa.org.uk/rulings/4air-llc-a23-1184018-4air-llc.html. 

4 See further detail in EDO’s Submission to AANA regarding the Environmental Claims Code (February 2023) https://www.edo.org.au/wp-content/uploads/2023/03/230220-EDO-submission-AANA.pdf.