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BGH ruling: Katjes may not simply advertise as “climate neutral”

BGH ruling: Katjes may not simply advertise as “climate neutral”
BGH ruling: Katjes may not simply advertise as “climate neutral”

Many manufacturers advertise with the promise of being “climate neutral”, including Katjes. But what exactly does that mean? If that is not made clear in the advertising, the word will be taboo in the future, the Federal Court of Justice has ruled.

Customers are becoming more and more environmentally conscious, and companies are reacting. Many advertise that products are “climate neutral.” This almost never means that they are actually produced in a climate-neutral way, but almost always that the companies are planting trees somewhere to compensate or doing something else for the environment. The Federal Court of Justice (BGH) in Karlsruhe has therefore tightened the requirements for such environmentally-related advertising. Anyone who wants to advertise with ambiguous terms such as “climate neutral” must explain in the advertisement what exactly is behind it.

In this specific case, the competition authority had filed a lawsuit against the liquorice manufacturer Katjes because the company had advertised in a food trade magazine that all of its products were produced in a climate-neutral manner. The production itself is not emission-free, but to compensate for this, the company supports climate protection projects through an environmental consultant. The competition authority was certain that the advertising was misleading and filed a lawsuit. Important information had been withheld from the consumer.

What does “climate neutral” mean here?

The competition authority was unsuccessful with its first lawsuit. The Düsseldorf Higher Regional Court argued that consumers understand the term “climate neutral” to mean a balanced CO₂ balance. They know that this can also be achieved through compensation measures. From the perspective of the Higher Regional Court, it was sufficient to refer to more detailed information via a QR code. The competition authority did not consider this sufficient, which is why it appealed to the Federal Court of Justice.

The highest German civil court ruled in favor of the competition authority and, among other things, ordered Katjes to stop advertising. Readers of the trade magazine – just like consumers – could have understood the term “climate neutral” as both a reduction and a compensation of emissions. The advertising was therefore misleading.

Significance for competition

According to the Federal Court of Justice, an explanation of the term “climate neutral” was necessary primarily because the avoidance of greenhouse gas emissions and the compensation of these emissions are not equivalent. For climate protection, avoidance takes priority over the compensation of CO2 emissions that have already been caused.

The competition authority was satisfied with the verdict: “Companies that invest heavily in converting their entire logistics or production, energy procurement, etc., have made massive investments,” said Managing Director Reiner Münker. “They feel disadvantaged in competition when someone promises the same thing with a flashy term, even though they don’t do it.”

Katjes is not the only one advertising “climate neutral”

Katjes had already prepared itself for stricter regulations before the ruling. The confectionery manufacturer had used the term “climate neutral” in the past because it was striving to reduce the proportion of emissions in production itself, but also because the company was making significant compensation payments in the seven-figure range, said Katjes spokesman Pascal Bua. According to previous legal opinion, this was permitted.

Katjes is by no means the only company that uses the term “climate neutral” very casually. In a market analysis of 87 products with statements on climate protection a year ago, the Thuringia Consumer Advice Center came to the conclusion that no other phrase is found as frequently as “climate neutral”. However, for every third product examined, the consumer advocates found no further information on the claims on the packaging. Only every fourth package contained clear information directly surrounding the statement.

EU is working on regulations against greenwashing

Stricter requirements for green advertising promises are also being worked on at EU level. Last week, for example, the environment ministers of the EU states agreed on rules for voluntary statements by companies regarding the environmental or climate friendliness of products. According to this, companies should use clear criteria and the latest scientific findings to support their statements and labels. It should also be clear what environmental claims refer to – for example, durability or recyclability. The states must now negotiate a compromise with the European Parliament.

Source: Stern

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