Greenwashing: Beware of misleading practices

In a context where environmental protection has legitimately become a priority, many companies are seeking to position themselves as environmentally friendly players.

However, some economic players are abusing this trend by indulging in what is now called “greenwashing”, by giving a falsely positive image of their actions in favor of the environment.

This practice constitutes a misleading practice, which may induce acts of unfair competition.

  • What is greenwashing?

Greenwashing refers to the practice by which a company uses misleading or exaggerated claims to present itself as ecological or respectful of the environment, in order to capture or retain customers.

These may be misleading statements about the composition of the products, the production processes or even about the company's social and environmental commitments.

Greenwhasing can go so far as the use of misleading terms to designate a product or service.

  • The consequences of greenwashing

Greenwashing can have harmful consequences for both the environment and consumers.

By misleading consumers, since false information will alter economic behavior, thinking to buy a product or service that is neutral or beneficial to the environment. This practice constitutes an act of unfair competition in addition to deceptive commercial practice.

Moreover, by buying a product that is offered as being “biodegradable” or “compostable”, when it is not, the consumer may be led to damage the environment by burying it, for example.

  • The legal framework

In France, consumer law, whose main objective is to protect the consumer, prohibits misleading commercial practices and misleading advertising.

Article L.121-1 of the Consumer Code provides that “any misleading commercial practice is prohibited”. This provision also applies to misleading environmental claims.

In addition, the climate and resilience law of 2022 has created the obligation for companies to justify the environmental claims they make on their products or services.

Finally, the French Agency for Ecological Transition (ADEME) has published guidelines to frame companies' environmental claims. These guidelines help companies ensure that their statements comply with legal requirements and are not misleading.

A practical guide is available on the website of the Ministry of Economy and Finance.

Although this document is not binding, it is however often used by the services of the DGCCRF (General Directorate for Competition, Consumer Affairs and Fraud Control)

If Greenwashing is already considered at European level as an unfair commercial practice, the European Union wishes to go further and proposes, in its draft directive of March 23, 2023, common criteria to combat greenwashing and misleading environmental claims.

Moreover, the greenwashing trend can also be sanctioned on the ground of the trademark law. Indeed, to be valid:

  1. The mark must not be misleading. For example, it cannot include the term “organic” if the products covered are not clearly identified as coming from organic farming; nor can it put forward a geographical origin if the products have no link with this region, by their ingredients/raw materials, or their production chain, etc.
  2. The mark must be distinctive, not purely descriptive. Also, even if an environmental claim is real and supported by tangible elements, the mark must contain other elements that give the whole a distinctive character.

The choice of a brand to designate products or services that are beneficial or at least respectful of the environment is not easy. It is a question of considering a fair balance between marketing strategy and distinctiveness or absence of deceptiveness of the mark.

The use of a slogan in the baseline could appear as an alternative.

  • Sanctions in case of greenwashing

In the event that the practice of greenwashing is proven, the company in question exposes itself on the one hand to criminal sanctions for deception and misleading commercial practices, and on the other hand to an action for unfair competition on the part of other economic agents in the market.

The lure of profit will naturally push less respectable companies to try to take advantage of this trend, while virtuous companies will make investments to meet the criteria necessary for the use of a specific mention.

You should not hesitate to consider the option of requesting the cessation of acts of unfair competition and seek redress.

Unfair competition, Consumption, Brands
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