By Andrew Skinner - 19 Jul 2020
Consumers are increasingly basing their purchasing
decisions on the environmental impact of the product or service. As
a result, environmental claims made by businesses about their goods
or services are becoming more common in advertising.
The Commerce Commission has recently released guidelines for
businesses making environmental claims to help businesses
understand their obligations and how to avoid breaching the Fair
Trading Act (available at comcom.govt.nz).
The guidelines emphasise how accurate businesses must be when
making environmental claims as the penalties for getting it wrong
can be serious (the maximum fine is $200,000 for individuals or
$600,000 for corporates).
Some of the main points from the guidelines are:
Claims must be truthful and accurate
Businesses must ensure that their claims do not mislead the
'reasonable consumer'. Vague claims can often mislead a consumer,
leaving room for interpretation. Claims must be regularly reviewed
and updated so they do not become incorrect or untrue.
Certification stamp
Businesses must be careful not to mislead consumers with their
own certification stamps that may be interpreted as their goods or
services being independently certified.
Substantiate claims
It is important to ensure that claims are supported by
reasonable grounds and from a reliable source. Businesses are
advised to keep relevant information and evidence to substantiate
any claims made. The basic rule of thumb to follow is "if you can't
back it up, don't say it".
Overall impression
The advertising material must not give a misleading impression
of the good or service. It is very important that the fine print
does not contradict the main message.
The key for making environmental claims is for businesses to be
transparent, accurate and truthful in all parts of their claim. Any
claim that can be misinterpreted by the reasonable consumer, or
cannot be substantiated, may be in breach of the Fair Trading
Act.
This is a complex area and the guidelines are a useful reminder
for businesses to rigorously review all advertising and promotional
material. We have checklists that can be used by businesses to
review marketing materials before publication. If you would
like to know more or require assistance please contact Andrew
Skinner.