Sustainability Claims: Trendy But Tricky

Companies today are under more and more under pressure to not only improve their environmental performance but also let the world know about it. However, the risks of both reputational damage and legal consequences stemming from a sustainability claim gone wrong are great. You are therefore well advised to consider unfair competition law before communicating green plans and achievements to consumers.

Applying a strict standard

Environmental advertising is not a new phenomenon. In Austria, the first cases involving potentially misleading suitability claims – also known as "greenwashing" – date back to the early 1990s. Today, it is settled case-law of the Austrian Supreme Court that sustainability claims may only be used in advertising if they are clearly substantiated and cannot mislead the average consumers. Also advertisers are obliged to provide more detailed information if a reference to the environmental friendliness of a product can be misunderstood.