“Environmentally or climate neutral” has now become a buzzword that is frequently used in relation to food these days. It exudes the sustainability of a product that reduces the personal ecological footprint. A more sustainable and conscious lifestyle that conserves natural resources is at the forefront of many people’s minds. The growing environmental awareness of consumers also means that they tend to prefer (supposedly) climate-neutral products.
Many companies are tapping into this trend by labeling their products as climate-neutral in the hope of gaining a competitive advantage. For consumers in particular, however, it is often impossible to verify the truth of the statement. They have to trust almost blindly.
Deutsche Umwelthilfe e.V. (DUH) is repeatedly taking legal action against this emerging trend of environmental advertising and has set itself the goal of combating consumer deception and enabling honest competition.
The DUH was initially successful against HelloFresh, which described itself as a “climate-neutral” company. The Berlin Regional Court rejected Hello Fresh at the time. (LG Berlin, judgment of 19.09.2023 – 102 O 15/23). The same happened to the drugstore chain dm, which, according to the Regional Court of Karlsruhe, is no longer allowed to advertise its own brands as “environmentally or climate neutral” (Regional Court of Karlsruhe, judgment of 26.07.2023 – 13 O 46/22).
Now the discounter Netto is also joining this case law (Regional Court Amberg, judgment of 29.01.2024 – 41 HK O 0279/23).
The judgment
Netto advertised its coffee drink “Cafèt Latte Cappuccino” as “climate neutral” and justified this with carbon credits from forest protection and reforestation projects in Brazil and Uruguay.
So Netto, like many other companies, tried to “greenwash” its product by buying carbon credits.
However, the Amberg Regional Court classified these as “unsuitable for offsetting in the sense of climate neutrality”. They were not sufficient to advertise the product as climate-neutral.
Accordingly, the regional court considered the advertising to be an unfair commercial act, as it was misleading within the meaning of Section 5 para. 2 No. 1 UWG. It had not been proven that the coffee drink was CO₂ neutral overall. It was therefore likely to deceive the seller.
In its reasoning, the Regional Court referred to a decision of the Federal Court of Justice on the use of environmental advertising. According to this, a strict standard is to be applied due to the particular suitability for an emotional purchase decision of the customer. (NJW 1989, 711,712)
In the underlying case, “climate neutral” is therefore to be understood by the average consumer as a promise of CO₂ neutrality, unlike “environmentally friendly”. However, this can also be guaranteed by subsequent offsetting.
In this case, this climate neutrality could not be guaranteed. Netto bears the burden of proof here and should have demonstrated that this project binds the amount of CO2 emitted during the manufacture of the product, even in the long term. The stated forest protection projects only have a limited duration. They were therefore classified as unsuitable.
The regional court ultimately ruled that Netto must refrain from advertising the product “Cafèt Latte Cappuccino” as “climate neutral” under threat of a fine.
Netto has since changed the name to “ClimatePartner certified”.
Netto has the opportunity to appeal against the ruling at the Nuremberg Higher Regional Court.
Current practice in case law
Environmental advertising with terms such as “climate-neutral”, “environmentally friendly” or “recycled” are examined under unfair competition law in the context of the prohibition of misleading advertising.
The general prohibition of misleading advertising through active action under Section 5 UWG, the prohibition of misleading advertising by omission under Section 5a UWG and the general clause of Section 3 UWG, including the associated “black list” of business activities that are always prohibited, come into consideration.
The BGH has drawn a parallel here between environment-related and health-related statements and sets strict assessment standards.
This stricter standard is justified by the often emotional appeal to consumers, who are affected by their own well-being and sense of responsibility and rarely have the opportunity to verify the environmental claims made in advertising.
A growing challenge here is the evolving consumer understanding.
According to recent case law, it is clear to the average consumer that a product can also be “climate neutral” if offset certificates are purchased.
However, it is often unclear whether further information needs to be added and what exactly this is.
Ultimately, however, the overall impression conveyed by the statement in question is important when examining whether it is misleading.
It is relevant how the average consumer could understand the advertising.
Criticism of the current legal situation
However, case law in this field often differs, which can lead to legal uncertainty. This is also due to the fact that terms such as “climate neutral” or “environmentally friendly” are not subject to a uniform definition and are sometimes used synonymously by consumers. The term “climate neutrality” is controversial in case law and literature. Some courts understand it to mean “zero emissions”, while others also understand it to mean the possibility of offsetting, as Netto was aiming to do. Opinions differ even further on the question of what information must be disclosed and is considered material.
Due to the threat of legal consequences such as claims for injunctive relief, removal and damages (Sections 8, 9 UWG) and fines (Section 19 UWG), there is a great deal of uncertainty on the part of companies as a result of the problems mentioned.
Companies also do not have any guidelines that they can follow with regard to environmental advertising in order to be on the safe side. It is also difficult for companies to comply with existing rulings, as these are often based on individual cases. The provisions of the UWG are also considered insufficient in some cases.
Ultimately, climate protection, which should actually be the focus, suffers the most. The narrower the concept of “climate neutrality” is interpreted by the courts, the greater the effort and investment required by companies to meet this standard. However, the higher the costs, the less likely companies are to accept them.
Future prospects
However, improvements to the current uncertainties are foreseeable.
As part of the “Green Deal”, the EU Commission is planning to regulate environmental claims more strictly in order to curb “greenwashing”.
Clear criteria and guidelines are promised that will benefit advertising companies.
The Empowerment Directive and Green Claims Directive in particular are intended to require clear statements on environmental claims and ecolabels.
In addition, the Green Claims Directive requires that statements made on environmental advertising must be certified by an independent testing body.
It remains to be seen whether the directive will have the desired effect of uniform regulation.
Stricter EU regulations against greenwashing: companies in the spotlight
The pursuit of a sustainable image by companies using terms such as “climate neutral” is a clear trend due to the growing environmental awareness of consumers. The legal assessment of such advertising claims is strict, as can be seen in the case of Netto, and misleading statements are punished by the courts. The legal uncertainty in this area leads to criticism and calls for more uniform regulation. However, future EU measures could provide clarity and transparency by introducing stricter regulations against “greenwashing”. The aim is to promote responsible environmental advertising, which should ultimately promote climate protection.