Italy - Sustainability claims and greenwashing
What are the top three developments in Italy concerning green claims and the associated risk of greenwashing?
Sustainability and environmental issues are becoming extremely important for Italian consumers and public opinion. While Italian companies are increasingly inclined to adopt corporate policies inspired by a sense of respect for the environment and to demonstrate their green credentials, consumer associations, competent authorities and even competitors are becoming very proactive in monitoring the market and checking green claims’ veracity. This trend is helping both to protect consumers and to avoid distortions of competition mechanisms.
In light of the above, we have identified the following topics of interest that businesses making green advertising claims on the Italian market should be aware of.
1. The First Decision on Greenwashing Issued by an Italian Court.
Although not expressly regulated by Italian law, the “greenwashing” phenomenon has been the subject over time of numerous decisions issued by non-judicial authorities, including the Antitrust Authority and the Self-regulatory Institute for Marketing Communication (“IAP”). While the decisions of the Antitrust Authority are usually based on the provisions regulating unfair commercial practices contained in the Consumer Code, those of the IAP are based on Article 12 of the Code of Marketing Communication, entitled “Protection of the natural environment”, which states that “Advertising claiming or suggesting environmental or ecological benefits must be based on truthful, pertinent and scientifically verifiable evidence. Such advertising must ensure a clear understanding of which aspect of the product or activity the claimed benefits refer to”.
In November 2021, for the first time, the greenwashing phenomenon was dealt with by a Court in a decision that has been welcomed by the doctrine as highly innovative.
By order of 25 November 2021, the Court of Gorizia, after referring to Legislative Decree no. 145/2007, which regulates misleading and comparative advertising in business-to-business relationships, as well as Article 12 above, and after describing the so-called “hook effect” that advertising has on consumers, held that the use of misleading green claims by the defendant company had resulted in a loss of market share for the claimant.
Based on these arguments, the Court:
- Ordered the defendant to immediately refrain from the dissemination of advertisements untruthfully suggesting ecological benefits and containing unverifiable information;
- Set penalties for each breach of the above injunction and for each day of delay in complying with it;
- Ordered the publication of the decision on the defendant’s website for 60 days; and
- Ordered the defendant to pay the costs of the proceedings.
The decision issued by the Court of Gorizia was appealed by the defendant company, and following the appeal, the Court of Gorizia annulled it, finding that no evidence had been offered with reference to the loss (or risk of loss) of market share by the claimant.
However, despite the annulment (which was based on burden of proof rules), the 2021 decision remains important because, in addition to being the first decision on this topic rendered by a judicial authority, it represents the first time that untruthful green claims have been considered as a tool to gain a competitive advantage on the market. In other words, for the first time, greenwashing has been considered from an unfair competition perspective instead of a consumer law perspective.
2. The approach taken by the IAP and the Antitrust Authority highlights the importance of substantiation for all green claims.
As set out in section (i) above, the greenwashing phenomenon has been the subject of numerous decisions issued by the Antitrust Authority and the IAP.
In particular, all of the IAP’s most recent decisions have stigmatised the use of evocative and stereotyped claims as non-compliant with requirements of the aforementioned Article 12 of the Code of Marketing Communication on the grounds that green claims can be considered valid only upon assessment that the advertising message delivered to consumers was based on evidence.
The same approach has been adopted by the Antitrust Authority which has set out some general requirements that green claims must comply with, based on the principles expressed in the Italian Consumer Code with regard to commercial advertisements. In particular, by means of provision no. 28060 of 20 December 2019, the Antitrust Authority clarified that environmental claims "must report the environmental benefits of the product in a timely and unambiguous way, be scientifically verifiable and properly expressed”, and that "a correct environmental claim should convey information adequately documented, scientifically 'verifiable' and limited to specific aspects that can be verified in a comparative key with respect to homogeneous products".
Heavy sanctions have been imposed on green claims advertising a wide range of products that, despite their truthfulness, were expressed in such a way that the consumers, instead of understanding their real meaning, were led to think that the company in general had a business activity that was highly environmentally friendly. One of the most sensational cases concerned a multinational company producing fuels, relating to an advertisement claiming that one of its products (a specific type of fuel) had a positive environmental impact due to its characteristics and in relation to both fuel savings and reduction of gas emissions.
In another remarkable case in respect of mineral water, a company presented its product as environmentally sustainable due to the use of an allegedly better-performing bottling material due to a reduced amount of plastic used. In that case, the inadequacy of the necessary data to give evidence of the lower amount of energy needed to produce such materials led the Antitrust Authority to assess the claim as misleading.
Unfortunately, when advertising their products, companies regularly use terms such as “sustainable”, “ecological”, “environmentally friendly” or “zero impact”, with the sole aim of attracting the attention of sustainability-conscious consumers, being aware of consumers’ increased sensitivity to sustainability and that the environmental impact of their products is one of the key factors influencing commercial choices.
3. The “MADE GREEN IN ITALY” certification programme is adopted to promote genuinely ‘green’ products.
In order to promote competitiveness of the Italian production system, Article 21, paragraph 1, of Law no. 221/2015 established a national programme for the assessment and communication, on a voluntary basis, of the environmental footprint of products. The programme, called “Made Green in Italy”, is managed by the Ministry of Ecological Transition and is based on the PEF - Product Environmental Footprint method, as defined by the European Commission in its Recommendation 2013/179/EU and related technical documents. The implementing regulation of “Made Green in Italy”, which aims to establish its operating procedures, was adopted by Ministerial Decree no. 56/2018.
The purpose of “Made Green in Italy” is to enhance the value of Italian products whose environmental performance has been positively tested by an independent body, through formal certification aimed at combining the environmental performance of products with the “Made in Italy” dimension, which is linked to the excellence of the national production system. In fact, the certificate “Made Green in Italy” is only applicable to goods and services that, according to existing laws, originate in Italy. This means that a product that is not 100% “Made in Italy”, and for which part of the processing occurs in other countries, can only adhere to the program if the last substantial and economically justified transformation of the product takes place in Italy.
Companies that have achieved the “Made Green in Italy” certification can bear the following logo:
The logo is aimed at making these products recognisable on the market and seeks to encourage more conscious choices on the part of consumers, with a consequent competitive advantage for Italian companies in terms of “green capabilities”.
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