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Source: LGT

Regulators in the UK are set to impose tougher rules on companies regarding the information they provide consumers about their role in sustainability. Terms like "carbon neutral," "nature positive," and those related to offsetting will face increased scrutiny from organizations like the UK's Advertising Standards Authority. To take effective action, agencies must also reconsider their relationships with major polluters, according to industry insiders.

We have hit the end of making unspecific baseless claims such as “environmentally friendly”, and brands are starting to be under intense scrutiny from advertising regulators, and even governments. Consumers have also begun to keep a watchful eye on brands making false claims, and when evidence of greenwashing is found, it is typical to see brands can publicly shamed for misleading their client base.

Once very separate teams within a company, the advertising team, legal team, and sustainability teams are starting to have to work together now to make sure they are putting out honest statements. Still, there remains a divide between the groups whose missions are often so distant from one another that it creates internal tensions. The advertisers are focused on spinning stories and the sustainability teams want to deal in substance.

On Thursday, the European parliament voted to ban claims of carbon neutrality that are based on offsetting. The EU environment commissioner, Virginijus Sinkevičius, said firms would face greater scrutiny about their claims with offsets, but stopped short of supporting a ban, given their potential to fund climate crisis mitigation.

“Climate-related claims have been shown to be particularly prone to being unclear and ambiguous, misleading the consumer. Claims like ‘climate neutral’, ‘carbon neutral’, ‘100% CO2 compensated’ and ‘net zero’ are very often based on offsetting. We need to set things straight for consumers and give them full information,” he said. Companies found in violation of these new rules are likely to face steep fines, with reports saying misleading claims could cost companies 10s of millions of pounds.

A crackdown on these claims not only helps consumers make better educated decisions, but it incentivizes brands to make real efforts towards sustainability. When just any company could make baseless claims there is no benefit to being an environmentally friendly brand. Hopefully these changes will drive companies towards taking greener initiatives, even if they just do selfishly to bring in more customers.

As the advertising industry navigates the tightening regulations and growing scrutiny surrounding greenwashing, a pivotal shift is underway. With the potential for fines and reputational damage, advertisers are recognizing the imperative to provide accurate and transparent information to consumers. By prioritizing sustainability, brands can not only meet regulatory requirements but also forge a stronger connection with conscientious consumers who seek genuine environmental action.

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