Consumers across Europe are increasingly demanding products and services which do not harm the environment.

In a response, there has been a proliferation of advertising claims that products, services and businesses meet the required European standards and establishing the validity of those declarations can be difficult.

The consumer market in Sweden has seen an increase in environmental claims about products resulting in more reports to the Swedish Consumer Agency and the Advertainment Ombudsman.

The European Union’s Ecolabels system, which celebrated its 30th year in March 2022, is applied to services and products in order to inform consumers of their environmental-friendliness and to avoid market failures. Within the European Union the official ecolabels include the official EU Ecolabel, the Nordic Ecolabel 'the Swan', and the German 'Blue Angel'.

In October 2021, the European Commission adopted new criteria for cosmetics and animal-care products. According to the new criteria, not only ‘rinse-off’ products like body wash, shampoo and conditioner can apply for the label, but all cosmetic products can. This includes oils, creams, skin-care lotions, sunscreens, deodorants and anti-perspirants, hairstyling and make-up products.

On an EU basis, there are no regulations that specifically target environmental claims in advertising. Whether or not such claims are allowed will therefore be assessed based on the Unfair Commercial Practices Directive which regulates unfair business practices in EU law, as part of European consumer law. It requires corresponding laws to be passed that incorporate it into each member state's legal system.

Leading Dutch airline KLM found itself at the centre of the first corporate lawsuit alleging “greenwashing”, where a company claims its action are more environmentally friendly to the planet than they actually are. Netherlands-based campaigners Fossielvrij NL, supported by Reclame Fossielvrij and environmental lawyers from ClientEarth, argued that KLM’s “Fly Responsibly” advertising campaigns and “compensation” schemes breached the Dutch implementation of the EU’s Unfair Commercial Practices Directive by giving customers the false impression that its flights would not worsen the climate emergency.

However, expert evidence submitted with the court filing claimed KLM could not validly prove that such gestures made any meaningful compensation for the climate impact of flying.

The question of does an eco-label constitute an environmental claim has recently been answered by the Swedish Patent and Market Court of Appeal (PMCA).

In that case, the Swedish Consumer Ombudsman alleged a Swedish company’s use of specific ecolabels constituted unfair marketing. The PMCA stated that the use of an ecolabel, which refers to environmentally friendly certification, creates the impression that the goods have a positive impact on the environment, or at least a lower environmental impact than competing goods. Therefore, the PMCA stated that the use of ecolabel constitutes environmental claims.

The judgment made it clear that when a trader uses an ecolabel from a certification that originates from a private party, they will have to provide additional information regarding the meaning of such certification.

Despite this ruling, the use of ecolabels in advertising continues to be a complicated issue as it is still uncertain which kind of ecolabels, apart from the official ones mentioned in the case, amount to sufficient robustness and reputation that motivates use without further information about the meaning and explanation.

W Denis Europe can offer high limits of indemnity to protect businesses against various types of class actions, Management / Directors & Officers Liability and Environmental Liability Insurance claims. We arrange many other types of business insurance such as General Public and Product Liability, Product Recall, Medical Malpractice, Professional Indemnity etc.

For any enquiries, please contact Vida Jarasiunaite Vida.jarasiunaite@wdenis.eu or Mark Dutton mark.dutton@wdenis.com