Wettbewerbszentrale: Advertising with "climate-neutral"

Climate protection is becoming increasingly important to more and more consumers, and when purchasing products they are paying ever closer attention to their sustainability. It is therefore hardly surprising that companies nowadays wish to promote their commitment to climate protection and to label their products as "climate-neutral". The Wettbewerbszentrale (Central Competition Authority) views this critically and has to date issued warnings in twelve cases against advertising claims made by several companies as misleading and non-transparent.

The Wettbewerbszentrale objects to advertising claims such as "100% climate-neutral production", "we operate climate-neutrally" or "climate-neutral product" when climate neutrality is achieved through the purchase of CO₂ offset certificates (Pressemitteilung vom 19.05.2021).

The Wettbewerbszentrale's position on advertising with "climate-neutral"

The Wettbewerbszentrale takes the view that these statements create the impression that climate neutrality is achieved 100% through emission-avoidance or emission-reduction measures that concern the advertising company itself and its products. In fact, in these cases "climate neutrality" through the purchase of CO₂ offset certificates merely represents a mathematical result.

Such certificates can, among other things, be purchased from non-profit organisations that are committed to climate protection projects. Often measures in developing countries are supported.

The Wettbewerbszentrale sees this as misleading because the measures have nothing to do with the advertising company and its products, although this is suggested, and the purchase of certificates is concealed in the advertising.

Furthermore, the Wettbewerbszentrale criticises breaches of the transparency obligation. According to the Wettbewerbszentrale, the contested advertising measures failed to disclose what proportion of the climate-protection measures relate to the company itself and its products. In addition, there are very different CO₂ certificates on the market with different effectiveness and very different prices. The location where the environmental protection projects are implemented is a price-determining factor about which the entrepreneur must provide disclosure in the advertising.

Conclusion

It remains to be seen how the courts will decide and what requirements must be met in order to be able to advertise with the term "climate-neutral" with legal certainty to do so. If a company wishes to advertise with claims regarding climate neutrality, prior examination of the advertising for possible risk of misleading is essential.