Countdown to when companies can no longer engage in eco-posturing

BarcelonaAdvertisements featuring idyllic fields and blossoming trees, promises of "clean" or "less polluting" vehicles, advertising for "sustainable" flights using "green" fuel, and claims of carbon neutrality in the coming decades. Companies—especially large corporations—have become accustomed to exaggerating, or outright fabricating, environmental credentials in their communication strategies to portray their products and operations as more sustainable than they actually are. It won't be long before the business world finds it somewhat more difficult to engage in eco-posturing. -either greenwashing, in English- Left and right.

March 26th of next year is the deadline for member states to transpose the European directive that aims to protect consumers from these practices and force companies to verify these messages. In Spain, sources from the Ministry of Social Rights, Consumer Affairs and Agenda 2030, headed by Pablo Bustinduy, confirm that they are processing the draft of the sustainable consumption law that will include this legislation so that it will reach the Congress of Deputies "soon". According to the preliminary version of the text, which ARA has accessed, this law would modify the unfair competition law to explicitly incorporate the greenwashing as a form of deception. "When a company uses terms like green, echo, sustainable "Using symbols or colors associated with environmental care in their brand image, without genuine support, not only manipulates consumer perception but also discredits the efforts of those organizations that do adopt responsible and verifiable practices," the draft emphasizes. The European directive—and its translation into a Spanish law that should soon reach Congress—has received a sufficiently positive assessment from environmental organizations, which celebrate that the ministry is beginning to legislate on this legal loophole that companies have exploited until now. These practices are not penalized, and dissuasive fines are not imposed. "It would be easier to penalize them," says Celia Ojeda, head of the Biodiversity area of Greenpeace Spain. greenwashing as part of unfair trading practices, so that fines can be imposed under the existing framework for this area. "We need more ambitious enforcement. If it depends solely on companies, it's useless," Ojeda adds.

Second European Directive

These shortcomings in achieving effective oversight could be resolved if the European Commission manages to pass another specific directive on eco-posturing. This should include a new step: the verification of these environmental claims by an independent third-party body. "What could happen in this first phase is that if companies continue to do as they please, consumer protection agencies and commercial courts handling unfair competition cases will already have legal instruments to say that they are breaking the law," explains Miguel Ferrer, co-founder of Dinamo, a Barcelona-based company that has developed—together with the foundation—a framework to ensure its messages don't fall into the trap of misleading advertising. greenwashing

According to this expert in regulation and policy, until now there has been a lack of a clear legal framework for these types of cases, as seen in the court battle between Iberdrola and Repsol. The electricity company sued the oil company for eco-posturing and unfair competition through misleading advertising. Even so, the Santander court that reviewed the lawsuit dismissed it, and Iberdrola chose not to appeal the ruling. Therefore, Ferrer believes that NGOs will also gain legitimacy and tools to denounce these types of practices and compares these new obligations with those already in place. Banks have a role to play in financial communication. "There will be a cultural shift in corporations. All departments involved [not just marketing and communications, but also affairs, legal, and human resources] will have to consider how they say things and why they do so, or it will be considered unfair competition," he concludes.