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[Ed. note: In observance of the Fourth of July in the U.S., no blog will be published tomorrow.  We will be back Friday.  We wish everyone a safe and happy Fourth.]

Greenwashing restrictions have grown tighter in Germany as the country’s highest court banned unqualified “carbon neutral” claims. The case, brought by an NGO, argued that carbon neutral claims that lack an explanation are misleading to consumers who might mistakenly believe that a company is reducing emissions when in reality it is simply purchasing offsets. The court sided with the NGO as reported by Clean Energy Wire::

“Companies are no longer allowed to label their products ‘climate neutral’ in Germany without adding a detailed explanation to back up the claim, the country’s highest court has ruled. In a lawsuit filed by the competition watchdog Wettbewerbszentrale against sweets producer Katjes, the Federal Court of Justice (BGH) ruled that the company had misled consumers in a trade journal by claiming that its carbon offsetting efforts had made the product climate neutral even though the production process still released emissions. ‘The claim ‘climate neutral’ is ambiguous because it can be understood both as referring to a reduction of CO2 in the production process and to a mere compensation of CO2,’ the judges argued.”

The German decision – while important -is substantially similar to restrictions put on carbon-neutral claims by the EU’s Directive to Empower Consumers for the Green Transition and the upcoming Green Claims Directive. These will require companies making such claims to heavily qualify them with additional information about the amounts of actual carbon reduction vs. offsetting practices. This makes Germany slightly ahead of the curve but in line with the overall policy approach taken by the EU. Communicating a company’s sustainability achievements through advertising is a difficult task, but the key is to be as transparent as possible about what the claim represents. Qualifying language isn’t just something that can help companies in Germany stay out of trouble, it’s a practice that can be used in many jurisdictions to avoid allegations of false or misleading claims.

Our members can learn more about Greenwashing regulations here.

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The Editor

Zachary Barlow is a licensed attorney. He earned his JD from the University of Mississippi and has a bachelor’s in Public Policy Leadership. He practiced law at a mid-size firm and handled a wide variety of cases. During this time he assisted in overseeing compliance of a public entity and litigated contract disputes, gaining experience both in and outside of the courtroom. Zachary currently assists the PracticalESG.com editorial team by providing research and creating content on a spectrum of ESG… View Profile