Portugal - Sustainability claims and greenwashing
What are the top three developments in your territory concerning green claims and the associated risk of greenwashing?
Green claims have been attracting Portuguese regulators’ attention to avoid misleading or unsubstantiated advertisement claims. In Portugal, the New Consumer Agenda acknowledges the necessity of promoting an active consumer role through the ecological transition. This is often undermined by the informational asymmetries between consumers and organisations. In that regard, the Portuguese Government aims to ensure that consumers have access to reliable and verifiable information about sustainability credentials of products and services, and the environmental footprint of products and organisations.
Misleading claims in the context of advertising may constitute a breach of the Portuguese Advertising Code (under Article 11), as well as a violation of the Unfair Commercial Practices Regulations (Articles 3 and 7). Such breaches could result in formal investigations, financial penalties, civil sanctions and criminal prosecution. Moreover, in accordance with the applicable law, wrongfully claiming that a product is environmentally friendly, without proof, may result in fines between € 2,000 and € 90,000 depending on the size of the business.
Additional sanctions might be applied depending on the seriousness of the offence and the degree of fault of the offender.
We have set out below the three most important areas of development for businesses to be aware when making green claims aimed at Portuguese consumers.
1. New guidelines issued by the government regulator
The Portuguese Consumer Authority (“DGC”) is the public entity responsible for defining and executing consumer protection and supervising advertising activities in Portugal. It has been working to raise awareness and to educate both professionals and consumers on the risks of misleading advertising and greenwashing.
Together with the national Self-Regulatory Entity for Advertisement, the DGC published an extensive report concerning greenwashing practices, issued in August 2021. The report comprised an explanatory guide on the commercial practices of companies that seek to associate their brands with sustainability, particularly with regard to “environmental claims" which have the aim of encouraging the adoption of environmentally conscious and enlightened consumption practices.
The report sets forth clear guidelines for economic operators. The guidelines aim to make operators aware of the appropriate practices for promoting their goods and services whenever they use environmental claims, to avoid wrongfully misleading consumers. Specifically, they aim to avoid so-called eco- or greenwashing, encouraging advertisers to make truthful, clear, precise and relevant statements, based on scientific and verifiable facts. In addition, this document presents information for consumers focusing on environmental claims used in marketing and advertising. The report also includes a “checklist” for assessing the conformity of environmental claims with international fair advertising practices.
Additionally, the Code of Conduct on Advertising Self-Regulation and other forms of Commercial Communication includes a specific section on Environmental Claims (Section E), establishing a framework to guide economic operators in the presentation of environmental claims in any advertising medium.
The lack of conceptual uniformity, leading to a likelihood of possible misinterpretation of marketing messages by consumers, has been a matter of particular concern in the context of false ecological claims. This has been the case notably in relation to the concept of "biodegradable plastic", which is addressed in Decree-Law no 78/2021 of 24 September 2021, which partially transposed Directive (EU) 2019/904 of the European Parliament and of the Council of 5 July 2019 on the reduction of the impact of certain plastic products on the environment.
2. Stronger public pressure against greenwashing practices
As noted above, there is a growing concern in Portugal about the lack of conceptual uniformity across EU Member States, which would provide a reference or common basis for legitimising green claims. Consequently, this has also been emphasised by Portuguese organisations and authorities, who have issued multiple warnings to raise consumers’ awareness about these practices.
In light of the growing number of green claims made by advertisers, public scrutiny of such claims has increased. During 2021, the DGC filed at least nine administrative offences against non-compliant companies for marketing or advertising their products as being sustainable or ecologically-friendly to attract customers or create a 'green' image, when in fact they were not.
Moreover, the Portuguese Association for Consumer Protection (“DECO”) also plays an important role in the identification and reporting of greenwashing practices in addition to the DGC.
3. Growing use of sustainability labels
There is a growing acceptance and promotion of green labels to demonstrate advertisers’ sustainability credentials, particularly within specific sectors or industries. These are granted by the corresponding national and international authorities once the relevant certification procedure has been successfully completed, which may require that certain requirements are fulfilled, and/or the payment of a fee.
Nonetheless, to establish whether a given label or logo is reliable, consumers and business owners must always check with the competent national or sectorial authority to verify this. In that regard, most Portuguese industry authorities facilitate access to legitimate or approved labels, by making available a list of such labels on their websites.
