BGH ruling - Requirements for advertising with environmental promises tightened
With increasing environmental awareness among their customers and clients, some companies in advertising claim the supposed climate neutrality of their products. However, it often remains unclear how exactly this climate neutrality is actually achieved. The Federal Court of Justice (BGH) in Karlsruhe has now set strict requirements for environmental advertising. Anyone who wants to advertise with ambiguous terms like "climate neutral" must therefore explain in the advertising itself what is actually behind it.
In a specific case, the Frankfurt Competition Central Office had sued Katjes, the licorice and fruit gum manufacturer, because the company had advertised in a food industry magazine that all its products were climate neutral. The production process itself is not emissions-free, but the company supports climate protection projects through an environmental consultant. According to the plaintiffs, the advertising was misleading. The consumer was deprived of important information - for example, about the method by which climate neutrality was achieved. (Az. I ZR 98/23)
What does "climate neutral" mean?
Previously, the Competition Central Office had not been successful with its lawsuit. The Higher Regional Court of Düsseldorf argued that consumers understood the term "climate neutral" in the sense of a balanced CO2 balance. They knew that this could also be achieved through compensation measures. What mattered, according to the Higher Regional Court, was that the readers were sufficiently informed online about how the climate neutrality of the products was achieved. Through a QR code in the advertisement, they could access more information on the environmental consultant's website.
The Competition Central Office was not satisfied with this. Announcements about how climate neutrality is achieved should have appeared in the advertising itself, according to Business Manager Reiner Münker - preferably separated according to what the company saves in emissions itself and what is compensated. It must be distinguishable between companies that achieve real reductions in emissions with high investments and technical developments, and those that make no changes in their own business but pay money for climate projects.
The highest German civil court ruled in favor of the plaintiffs on Thursday and ordered Katjes, among other things, to stop the advertising. The readers of the trade journal could - just like consumers - understand the term "climate neutral" both as a reduction and as a compensation of emissions. The advertising was therefore misleading.
Significance for competition
The Higher Regional Court did not take into account in its decision that the risk of misrepresentation is particularly large in environmental advertising, so the Karlsruhe Senate. In this area, there is - as in health-related advertising - a higher need for consumer information. Explanatory information outside of advertising, such as on the company's website, is not sufficient.
A clarification of the concept "climate neutral" was considered necessary by the judges due to the fact that the reduction of CO2 emissions and the compensation of these emissions are not equivalent measures towards achieving climate neutrality. For climate protection, reduction is prioritized over compensation. Misrepresentation is also relevant in competition law, as the supposed climate neutrality plays a significant role in consumer purchasing decisions.
Münker explained after the judgment that companies making massive investments in the conversion of logistics, production, energy procurement, and so on, feel disadvantaged in competition when someone promises the same thing with a shining label, even though they do not actually do it. "This was a competition issue for us from the start," Münker stated.
Stricter regulations for green advertising
Katjes had already prepared for stricter regulations before the judgment. The confectionery manufacturer had previously used the term "climate neutral" because they aimed to reduce the share of emissions in production, but also because the company made significant compensation payments in the seven-figure range, Katjes spokesperson Pascal Bua told the German Press Agency in response to an inquiry before the announcement. According to previous legal assessment, this was permissible. "Given the current case law of the Federal Court of Justice, the legal situation could change, which we would have to adapt to accordingly."
Stricter regulations for green advertising promises are also being discussed at the EU level. For example, the environmental ministers and ministers of the EU countries agreed on regulations for voluntary statements by companies regarding the environmental or climate friendliness of products last week. Accordingly, companies should use clear criteria and the latest scientific findings to support their statements and labels. It should also be clearly recognizable to which aspects the environmental statements refer - for example, to durability or recyclability. The states now have to negotiate a compromise with the European Parliament.
The consumer organization Foodwatch welcomed the BGH judgment, but also called for clearer rules for climate advertising from politics. "The EU should not allow loopholes for companies in its negotiations," said a spokesperson. "Slogans like climate neutral or climate positive are banned if they are based on compensation projects. The proof of emission reduction must be independent and based on uniform standards."
BGH Communication on the Judgment
- Despite claiming climate neutrality for their products, companies in advertising often lack clarity on how this neutrality is achieved.
- In North Rhine-Westphalia, the Düsseldorf Higher Regional Court previously argued that consumers understood 'climate neutral' as a balanced CO2 balance.
- Reiner Münker, a business manager, argued that enthusiastic claims about climate neutrality should appear in the advertising itself, separated by savings and compensation.
- The Federal Court of Justice in Karlsruhe ruled in favor of the plaintiffs, stating that 'climate neutral' can be misunderstood as both reduction and compensation, leading to misleading advertising.
- Katjes, a licorice and fruit gum manufacturer, was sued for advertising climate neutrality, as their production process is not emissions-free, but they support climate projects through an environmental consultant.
- The EU is discussing stricter regulations for green advertising promises, urging companies to use clear criteria and latest scientific findings to support their statements.
- Foodwatch, a consumer organization, welcomed the BGH judgment but called for clearer rules for climate advertising from politics, banning slogans based on compensation projects.
