In a major greenwashing case, a Dutch court rules that a series of 15 advertisements constitute an unfair commercial practice!
Greenwashing
Greenwashing is the phenomenon whereby companies or organizations pretend to be ‘greener’ or more socially responsible in advertising than the actually are. Under certain circumstances, greenwashing constitutes misleading and an unfair commercial practices.
Advertising by KLM
In a very recent judgement, 15 of the 19 advertisements by KLM submitted in court proceedings were found to be in violation of the Unfair Trade Practices Act.
The court rules that KLM's advertising statements suggesting that flying can be or become sustainable are misleading and unlawful. Advertisements that suggest that the purchase or contribution to a "compensation" product actually reduces, absorbs or offsets some of the climate impact of flying also qualify as being misleading and unlawful. In other words, the court rules that the advertising by KLM is greenwashing.
Arguments by KLM
KLM argued that it has ambitions in the field of CO2 reduction and is committed to this (a.o. through fleet renewal, the use of aviation fuel other than fossil fuel and operational improvements). The court first of all states that KLM is free to inform consumers about its ambitions and about the way in which KLM is committed to realizing its ambitions. KLM is also free to advertise flying with KLM. The use of the term "sustainable" is not automatically inadmissible, "but when using such vague terms about environmental benefits with social connotations, it is up to the user (KLM) to make clear to the consumer what is meant by it in this specific case. Otherwise, there is a risk of creating the impression among consumers that a KLM product or activity has no (or a less) negative impact on the environment than it actually does. And that can be misleading.” (Office translation)
KLM does not have to warn consumers that today's aviation is not sustainable. At its core, it comes down to providing consumers with honest information.
Unfair trade practices regulation
Under the Unfair Commercial Practices Directive the guidance documents state among other that:
‘environmental claims’ and ‘green claims’ refer to the practice of suggesting or otherwise creating the impression (in a commercial communication, marketing or advertising) that a good or a service has a positive or no impact on the environment or is less damaging to the environment than competing goods or services. This may be due to its composition, how it has been manufactured, how it can be disposed of and the reduction in energy or pollution expected from its use. When such claims are not true or cannot be verified, this practice is often called ‘greenwashing’.
Environmental claims are likely to be misleading if they consist of vague and general statements of environmental benefits without appropriate substantiation of the benefit and without indication of the relevant aspect of the product the claim refers to. Examples of such claims are ‘environmentally friendly’, ‘eco-friendly’, ‘eco’, ‘green’, ‘nature’s friend’, ‘ecological’, ‘environmentally correct’, ‘climate friendly’, ‘gentle on the environment’, ‘pollutant free’, ‘biodegradable’, ‘zero emissions’, ‘carbon friendly’, ‘reduced CO2 emissions’‘carbon neutral’, ‘climate neutral’ and even the broader claims of ‘conscious’ and ‘responsible’.
'Vague and general statements'
Some of the advertisements by KLM are considered to contain environmental claims with "vague and general statements" regarding environmental benefits ("the way we travel (is) changing", "more sustainable" and "even more sustainable", office translation). According to the judgement, it’s not sufficiently concrete what environmental benefit will be achieved and to which aspects of (flying with) KLM this then relates to. Nor does it make it clear to consumers what KLM has in mind specifically to achieve certain goals. The fact that additional information can be found on KLM's Fly Responsibly website does not make this any different, according to the court, especially because it is insufficiently clear from the advertisement that this only concerns KLM's ambition.
Advertisements referring to the objectives of the Paris Climate Agreement are also considered misleading. Herewith, it is suggested that the realization of KLM's own objectives - in line with the Paris Climate Accord - is feasible. While this feasibility is made contingent on cooperation with other parties ("all of them"), it is not made concrete, measurable and specific in the advertisement.
'Too rosy'
Other advertising statements ("an important milestone" and "promising solution" and "a big step toward a sustainable future") paint a picture that is ‘too rosy’, according to the judgement. KLM lists measures such as fleet renewal, operational improvements and CO2 offsets. It then states "but by far the largest contribution will come from SAF." (Office translation, SAF is an acronym for Sustainable Aviation Fuels). According to the court decision, this suggests that a great deal can already be expected from the other measures KLM is taking and that SAF will contribute much more to the goal of achieving "net zero CO2 emissions" by 2050. This too paints a picture that’s too rosy, since it follows from the explanations accompanying the measures that at present they will only marginally reduce CO2 emissions and the negative environmental aspects of flying. It cannot be excluded that this will improve in the future, but given all the uncertain factors in that area, the judgement states that it does not befit KLM painting the rosy picture it did in the statements made. With one exception, this makes the statements misleading.
Advertising on CO2 emissions
KLM also advertises that its measures piece by piece help reduce CO2 emissions. CO2 offsetting is also listed as an example of the measures. However, according to the court, '[t]he CO2 emissions themselves are not reduced by something like reforestation.' Thus, this part of the expression is factually incorrect. It creates a false impression about the product's climate impact that may influence the consumer's decision and is thus misleading.' (Office translations)
SAF is also presented as "sustainable" jet fuel. According to the court, this goes too far: 'Although SAF can make a contribution to reducing the harmful environmental aspects of flying, the term "sustainable" here is too absolute and too imprecise. The statement that it is a 'promising solution' also paints too rosy a picture." KLM then does nuance the share of SAF and its application on a larger scale to some extent, but given the firm starting claim "Sustainable jet fuel: a promising solution" it does not do so sufficiently. At present, SAF's share in total fuel consumption (and thus in the reduction of CO2 emissions) is still very limited for various reasons. A more substantial share can only be expected in the distant future, and thus uncertain. The expression is therefore misleading'. (Office translation)
While the first passenger flight on synthetic kerosene has already taken place, it remains an experiment for now, according to the judge. 'Nor are any new flights on synthetic kerosene planned at this time. This is not clear to the person reading the statement. The advertisement therefore suggests more than is actually the case and creates too rosy a picture. The advertisement is therefore misleading,' said the court.
Carbon credits
KLM also advertises with ‘CO2ZERO’. This refers to the possibility for KLM customers to make a financial contribution to a reforestation project selected by KLM (carbon credits). This advertisement is also considered misleading: 'The term CO2ZERO service creates the impression that customers can use it to contribute to "CO2ZERO" or "zero CO2 emissions". This is an absolute and far-reaching terminology. This impression is not justified and may well be essential for the choice of the product. Added to that, the statement says "with our CO2ZERO service you can reduce the impact of your flight on the environment." And it talks about your share of your flight's emissions. This suggests that there is a link between the customer's contribution and reducing the negative environmental aspects of the customer's own flight. It gives the impression that the customer can completely erase the negative effects of CO2 emissions caused by him. This is not the case.” The impact is uncertain because, for example, it is not clear whether the trees will remain permanently. There is also no direct link between the customer's tangible contribution and the impact of the CO2 emissions of flights. Against this background, the statement is found misleading.
In this case, more is suggested than can be delivered. KLM also urges consumers to "change the future together" and "create a better future together." This creates the impression that with the reforestation program offered by KLM and the contribution to SAF when flying, important steps are taken to make a positive contribution to the future, in the sense that aviation becomes a "more sustainable sector." According to the court, KLM thereby 'gives too rosy a picture of the (minor) environmental benefits that can be achieved with a customer contribution to reforestation or SAF. Moreover, again, a direct link is wrongly suggested between a customer's contribution and the impact of his flight on the environment.'
Sustainable fuel
Finally, the term "sustainable fuel" is judged to be "too absolute" in certain expressions. KLM does not make sufficiently concrete for consumers what it is doing in terms of investments in the field of SAF and what environmental benefits can be achieved: 'In essential parts of these expressions KLM creates too rosy a picture and makes (implicit) claims that are insufficiently substantiated. Such as that "sustainable jet fuel" reduces CO2 emissions by "at least 75%" compared to fossil fuel. KLM uses the term "more conscious travel" and creates the impression that flying with KLM is sustainable, when in fact it is a price stunt. Although these statements are correct and informative in part, the court concludes that, viewed in their entire context, they are nevertheless misleading.'
‘Manipulation’
According to the judgement, it was reasonably foreseeable for KLM that the economic behavior of its public would be disrupted in the event of factually incorrect, incomplete and/or misleading information. Thus, the statutory 'manipulation' requirement has been met. 'It is sufficiently plausible that in the event of such information, the average consumer takes or may take a decision about an agreement with KLM that he would not have taken otherwise. Partly important here is that the average consumer, from an alertness to climate-related issues, is sensitive to 'green' claims,' the court said.
The court is also mindful that in this day and age, consumers like to be informed about the environmental aspects of the products they use. Consumers are concerned with sustainability, and the desire to make better choices in that regard increasingly plays a role in the decision to buy or not buy a particular product. 'This also applies to the decision to fly or not (and if so, under what conditions). Expressions that respond to this and create an impression about the "sustainability" of a product or the provider may therefore influence the decision to purchase a product from KLM.'
Lawful advertising
Not all commercial communication is deemed unlawful. Some expressions are either assumed not to be a trade practice, or correct, or contain no claim about KLM or its products.
Comment
There is a growing awareness these days that companies must also behave in a sustainable and responsible manner. This often happens on their own initiative, but sometimes they are also required to do so - think for example of (upcoming) European legislation and regulations such as the CSRD and the CSDD. These developments can result in companies advertising their products, services or even the company as a whole, as being environmentally friendly or sustainable, while the actual business operations do not always support these claims. This may involve misleading sustainability claims and "greenwashing”.
Te following ‘rules of thumb’ can be derived from the above mentioned judgement:
- Vague and general statements are in principle impermissible
- Objectives ('ambitions') must be clear, concrete, measurable and specific
- Measures taken must not paint too rosy a picture
- Advertising may not suggest more than can be achieved
- Absolute and far-reaching sustainability claims are easily found to be unlawful, especially without substantiation
The above ruling against KLM's "Fly Responsibly" campaign serves as a warning to companies to carefully evaluate their advertising strategies and campaigns.
Want to know more?
Want to know more about reviewing environmental and sustainability claims? Read our contribution on the Green Claims Directive here.
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