What advertising with the term “climate neutral” really means

Climate neutrality under the legal microscope: A look at a ruling by the Frankfurt Higher Regional Court, among other things.

In a world that is increasingly characterized by environmental awareness and sustainability, the term “climate neutral” has become increasingly important in advertising. Companies promise their customers that their products or services are climate-neutral, and thus rely on the positive perception of environmental responsibility. However, it is often unclear to the consumer what climate neutrality refers to or how it has been achieved. In any case, the term “climate neutral” suggests that a company removes as much CO2 from the atmosphere as it emits, i.e. has a balanced carbon footprint. Environmentally-related advertising statements have a positive influence on purchasing decisions. Strict standards must therefore be applied to environmental advertising in the same way as to health-related advertising.

Climate-neutral through compensation and purchase of certificates

There are various approaches to calculating climate neutrality, not all of which are equally transparent or effective. One option is to achieve carbon neutrality through the offsetting method, which allows companies and individuals to offset their CO2 emissions. This approach involves implementing measures or supporting projects that serve to remove or reduce the same amount of CO2 from the atmosphere as is emitted by their own activities. For example, companies can plant trees or invest in renewable energy projects to offset the calculated amount of their emissions by the same amount. Another method is the purchase of certificates that represent the CO2 reduction through external projects. These certificates allow companies or individuals to offset their own emissions by drawing on the CO2 reduction of other, i.e. non-company, projects. Both approaches aim to offset the carbon footprint, but they are based on different mechanisms and can vary in their effectiveness.

The risk factors of CO2 compensation for companies

In some cases, companies can focus so much on offsetting measures that they neglect efforts to directly reduce their own emissions. This can lead to a distraction from the necessary efforts to reduce emissions. Another common problem is the selective exclusion of certain types of emissions, which results in an incomplete picture of the environmental impact. It is also worrying that there can be a lack of proper monitoring and transparency, particularly when supporting climate protection projects abroad. Offsetting should not be used as a substitute for reducing one’s own emissions. Companies that rely solely on offsetting could run into difficulties in the long term as increasingly stringent emissions standards are introduced. Finally, companies also risk their credibility if they claim to be carbon neutral but cannot provide sufficient evidence or measures to prove it.

Example OLG Frankfurt: The term “climate neutrality” requires further clarification

The importance of transparency and authenticity in this context is shown by the judgment of the Higher Regional Court of Frankfurt (OLG Frankfurt a. M., judgment of November 10, 2022 – 6 U 104/22). Both parties are manufacturers of environmentally friendly household cleaners, including detergents, cleaning agents and cleaning products. The defendant uses the logo “climate neutral” on its website, among other things. The plaintiff objected to the use of this term as misleading, as it required further explanation. The OLG Frankfurt clarifies that the consumer understands a balanced balance of CO2 emissions when advertising with “climate neutral” and knows that this can also be achieved through avoidance and compensation methods (e.g. compensation projects, purchase of certificates).

The OLG ruled that in order to make an informed purchasing decision, the consumer must be informed whether certain emissions have been omitted from the carbon footprint and whether climate neutrality relates to the company, the product or both. In this case, no information was provided about the fact that so-called Scope 3 emissions were not included in the calculation. These are indirect greenhouse gas emissions caused by the supply chain, the use of products and services and other indirect activities of a company. The Greenhouse Gas Protocol, a globally recognized standard for recording and reporting greenhouse gas emissions, allows this, but does not change the duty of disclosure. It is based on the level of knowledge of the average consumer, who is unaware that Scope 3 emissions are not taken into account.

Essential information within the scope of the duty to inform

According to Section 5a UWG, anyone who withholds material information from the consumer is acting unfairly under competition law. Taking this provision into account, the OLG defines the essential information as follows:

  • the assessment basis
  • the standard for calculating the carbon footprint and reduction measures
  • the emissions excluded from accounting
  • the extent of the reduction measures in relation to the previously determined emissions
  • the type of compensation
  • the object of the climate project supported for compensation

In this case, it was a product for everyday use. More extensive information must be provided for higher-priced products or services. It is often not sufficient to present all relevant information in the advertising, so it is permissible to refer to a website where further information on the test criteria for a conscious purchase decision can be found. This can also take the form of a QR code on the product.

Contact person

Free newsletter

Matching contributions

Search

Request