Legal briefing | 03 Mar 2021 |

IP, sustainability and the perils of "greenwashing"

Today's consumers actively seek environmentally friendly choices when selecting goods or services. In 2019, UK consumers spent £41 billion on ethical or sustainable goods and services, quadrupling from 20 years ago. The Covid-19 pandemic is likely to have further increased the pace of this already growing, consumer-led focus on sustainability.

In crowded marketplaces, however, it can be hard for consumers to know exactly which environmental claims are trustworthy. With the growing demand for ethical products comes a risk that brands may exaggerate their environmental credentials to increase sales and promote their offerings, a practice known as 'greenwashing'.

In November 2020, the Competition Market Authority’s (CMA) consumer protection arm opened an investigation to assess the extent to which consumers are being misled by environmental claims. The investigation began with an open consultation to better understand what consumers expect from eco-friendly products, and how "green" claims affect their purchasing decisions. The results of the consultation will help inform the publication of detailed guidance for businesses, which is expected to be available in the summer of 2021. Dependent on the CMA's findings, there is also the possibility of updates to relevant consumer protection law.

Green sky thinking

The World Intellectual Property Office selected 'green IP' as its 2020 theme, putting the spotlight on IP rights as a way of supporting green innovation and encouraging market participants to build a low-carbon future. This reflects a truth which has been universally acknowledged for a long time: if used precisely, transparently and effectively, green IP can be a powerful brand-enhancing tool.

In particular, trade marks, indications of origin and certification marks have an important role to play, giving consumers confidence that products and services comply with verifiable sustainability standards. The judicious use of these IP rights can help businesses cut through the noise to deliver sustainable products into the hands of eco-conscious consumers, while trumpeting their own credentials. This in turn helps to incentivise and facilitate green innovation, allowing businesses to bring new developments to the market and deliver them to the end consumer.

However, the use of these and other branding tools is no substitute for the development of a genuinely sustainable business, product or service. Well-informed consumers are increasingly able and willing to look past climate conscious branding to decide whether they want to support or be associated with a particular product or supplier.

If used precisely, transparently and effectively, green IP can be a powerful brand-enhancing tool.

Ask not what your trade mark can do for you...

Trade marks by their nature are badges of origin, distinguishing the enterprise behind the sale of certain goods and services from other enterprises. This helps consumers decide who to buy from when making choices between similar, or related, products. Ownership of a distinctive portfolio of (registered or unregistered) trade marks will strengthen or reinforce a brand's identity, and the inclusion of prefixes such as 'Enviro', or 'Eco' in a mark is a useful way of communicating to customers the sustainability of a product or service.

However, brands must be confident in the legitimacy of environmentally friendly claims before committing to an 'Enviro' or 'Eco' style mark. They should also be ready to back these claims up, for example by explaining on the product packaging itself, or their website, the specific environmental credentials of the product.

The use of "green" trade marks in a vague or misleading manner to promote products with a question mark over their sustainability, will likely cause serious damage to the overall brand and risks accusations of 'greenwashing'. The CMA has recently provided a summary of misleading behaviours to be avoided. These include:

exaggerating the positive environmental impact of a product or service
using complex or jargon-heavy language, and
falsely implying items are eco-friendly through packaging and logos.

Brands must be confident in the legitimacy of environmentally friendly claims before committing to an 'Enviro' or 'Eco' style mark.

Deeds, not words

In addition to trade marks, environmentally-focused brands could look to use other signifiers to reassure customers that the products they are buying comply with certain standards. Businesses may be granted the right to use certification marks such as the "FAIRTRADE" stamp or the "Marine Stewardship Council" logo by the third party owners of these marks. Before doing so, the applicant will need to demonstrate that its products satisfy specified criteria, commonly including fair labour conditions, good environmental practices and sustainable manufacturing or sourcing processes. Again, the use of these marks should reflect (rather than presage) a commitment to sustainability and the sustainable nature of the product or service. Using such certifications without legitimate reason to do so will likely damage a brand's eco-friendly ethos beyond repair.

Using such certifications without legitimate reason to do so will likely damage a brand's eco-friendly ethos beyond repair.

            
        Practical steps
    
Do make careful use of trade marks, and branding to promote your "green" credentials
Don't make exaggerated claims about how "green" your product or service actually is
Do consider the use of certification marks to demonstrate compliance with sustainable practices, but ensure that you can continually meet the requirements that go with it
Don't use complex or jargon-heavy language which might confuse or mislead consumers

For more information and further guidance on incorporating the full suite of IP rights available into your sustainable business's brand strategy, please get in touch with the authors or your usual Travers Smith contact.

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