UK advertising regulator the ASA has published a detailed report on consumers’ understanding of environment-based terminology used in adverts, with a particular focus on the terms ‘net zero’ and ‘carbon neutral’.

The report was the culmination of a detailed research project into consumer understanding of terms relating to carbon emissions, and electric and hybrid vehicle terminology.  It concluded that 'carbon neutral' and 'net zero' were among the most familiar of the terms considered, but that there was little consensus among consumers on the meaning of these terms. Some consumers felt misled when carbon offsetting played a role in substantiating 'net zero' and 'carbon neutral' claims; but more engaged consumers recognised that advertisers who make 'carbon neutral' or 'net zero' claims are likely to be offsetting and not merely reducing their carbon emissions.

What these crucial terms mean to consumers is of great importance to advertising regulators and advertisers, because the answers to the key questions of whether an environmental advertising claim is misleading and whether it is substantiated will depend on what a consumer would understand by the claim.

The ASA have set out their planned next steps to increase transparency in this area. The first of these will be to update their Guidance on misleading environmental claims (a previous CAP guidance note on carbon neutral claims was removed from the ASA website in 2021), to recommend that organisations adequately explain the basis on which 'net zero' and 'carbon neutral' claims are made, wherever these claims appear, regardless of space or time constraints. Following this update, which is promised before the end of the year, the ASA will monitor advertising practices over a 6 month period. If this monitoring reveals that the evidence behind such claims remains questionable, then a CAP review will be commissioned to produce clear guidance on what evidence will and will not substantiate 'net zero' and 'carbon neutral' claims.

In the meantime, the ASA have warned that “unqualified claims are likely to breach existing rules, and the ASA will be taking proactive action immediately to crack down on such claims”.

The ASA will also be sharing its findings with the UK government, which is considering the recommendations of statutory consumer law regulator the CMA on new legislation to deal with environmental claims.  Amongst other things, the CMA has recommended creating statutory definitions for certain commonly used environmental claims, including “carbon neutral”. 

This statement of intent by the ASA is a further demonstration from a UK regulator that environmental claims are very much under the spotlight. Together with the recently announced CMA investigation into the fashion industry, and various recent rulings by the ASA (including notably in the food and beverage and financial services sectors, amongst others), it should serve a warning to businesses across all sectors that their green claims are unlikely to avoid scrutiny.