Hungary - Sustainability claims and greenwashing
- Regulator issues warning for consumers to treat sustainability claims with caution and provides guidance for businesses
- Specific requirements apply to the most common types of green claims and certification labels, and the regulator signals increased monitoring
- Private sector cooperation bodies launch green initiatives to promote and develop environmentally responsible practices
What are the top three developments in your territory concerning green claims and the associated risk of greenwashing?
As in other parts of the world, Hungarian consumers are becoming increasingly eco-conscious. A recent survey by the Eurobarometer found that more than eight out of ten respondents in Hungary (81% compared with the EU average of 78%) think that climate change is a very serious problem, and at least six out of ten respondents in Hungary believe that business and industry (65% vs the EU average of 58%) and national governments (60% vs the EU average of 63%) are responsible for tackling climate change.
We have identified three important trends to watch out for when making green claims aimed at Hungarian consumers.
1. Regulator issues warning for consumers to treat sustainability claims with caution and provides guidance for businesses
In a public communication the Hungarian Competition Authority (in Hungarian: Gazdasági Versenyhivatal, “GVH”) raised consumers attention about the need to always double-check the sustainability claims of advertisers. Even if a statement is factually true, it may still be a misleading or unfair commercial practice, if the wider context is kept hidden from the consumer. The GVH stressed that advertisers should provide clear, concise and unambiguous information to consumers to enable their informed decision.
In late 2020, the GVH published Green Marketing Guidance for Undertakings (“Green Marketing Guidance”) to assist it in developing commercial communication practices that help advertisers to avoid infringing the law. Although not binding, the guidance aims to outline commercial best practices expected by the GVH in individual cases.
In its Green Marketing Guidance, the GVH recommends using specific and unambiguous wording, and clear and understandable language. For example, the advertisement must make it clear how a green claim is related to a product or activity. Furthermore, advertisers should carefully consider the use of scientific terms or jargon which may confuse and mislead the average consumer.
In late 2022, the GVH announced it would be undertaking a market analysis study (“Market Analysis”) to examine the use of green and environmental impact claims in product and services advertising.
The Market Analysis focuses on green claims concerning food, clothing, household chemical products and cosmetics. As a first step of the Market Analysis, the GVH conducted a sweep of the market to identify green claims currently used by companies, and to determine which claims and businesses should be investigated further. In February 2023 the GVH issued a press release on the findings of the sweep, according to which it identified numerous potentially problematic claims (e.g. unclear/unsubstantiated green claims). This sweep was followed by an investigative phase (including an online consumer survey and requests for information addressed to major companies) to identify how green claims affect consumer perception of products and services, and the willingness of consumers to buy these products. As a third step, the GVH will issue a discussion paper summarising its findings and proposals to the legislator to establish a labelling and claim system, which aims to strengthen consumer confidence in environmental marketing in Hungary.
2. Specific requirements apply to the most common types of green claims and certification labels, and the regulator signals increased monitoring
The Green Marketing Guidance recommends specific requirements for substantiating common types of green claims, including “recyclable”, “recycled”, “refillable”, “free from”, “bio”, “organic”, “compostable” and “biodegradable”. For example, an advertisement claiming that a product is “free from” certain ingredients might be misleading if the ingredients in question are replaced by other materials, which are at least as harmful to the environment as the omitted ingredient. The green claim may also be misleading if other similar products do not contain the ingredient labelled as “free” either. For example, it is not advisable to refer to a product as being “free from” a certain chemical ingredient, if other comparable products do not generally contain such chemical ingredients either.
Claims related to renewable (“green”) energy, the longevity and durability of products, and carbon-dioxide emissions are also under strict scrutiny by the GVH. According to the Green Marketing Guidance, all such claims need to be supported by factual evidence, and consumers must be provided with all relevant information to prove that the product has the promised environmental benefit. When using comparative claims and claims about market-leading status, advertisers should pay special attention to the context of the claim and its possible interpretation by consumers in order to avoid the claims being considered misleading.
Green claims may also be made visually through the use of various trust marks, quality marks, other markings, logos, symbols and certificates. In this context it is important to ensure that the advertising message does not extend beyond the scope of what the certification label is intended to certify.
To facilitate compliance, the Green Marketing Guidance offers advertisers a practical checklist to consider when planning and performing green advertising activities. Staying up-to-date with the latest guidance is essential, as the president of the GVH emphasised in his speech of late 2022 that the authority will continue its zealous enforcement work concerning green claims to ensure consumers receive adequate and specific information as to product characteristics.
3. Private sector cooperation bodies launch green initiatives to promote and develop environmentally responsible practices
The Hungarian Marketing Association (in Hungarian: Magyar Marketing Szövetség, “MMSZ”) established its Green Section in late 2021. The MMSZ is the leading marketing advocacy group comprising thousands of marketing professionals and hundreds of multinational organisations. The Green Section aims to bring together businesses working towards a more sustainable future. The platform provides for coordination opportunities and development of common policies among its associates.
The Hungarian Advertising Association (in Hungarian: Magyar Reklámszövetség, “MRSZ”) is the self-regulatory body for the advertisement sector in Hungary. In its Hungarian Code of Advertising Ethics, the MRSZ lays down certain best practices regarding green claims. For example, advertisers must demonstrate that the advertised product has no negative environmental impact, taking into account its whole life cycle. In addition, the MRSZ recently launched its Green Planet Initiative, which aims to support its members in developing environmentally conscious attitudes and practices that minimise environmental impact. As part of the initiative, the MRSZ has also established the Green Planet Award to recognise member companies’ initiatives and projects that exemplify sustainable development.
It is clear from the recent developments that consumers and regulators expect advertisers to deliver more sustainable products and services. This is further underpinned by the fact that more than 80% of respondents in Hungary agree that tackling climate change and environmental issues should be a priority as part of the wider effort to improve public health (85% compared with the EU average of 87%).
