New Guidelines Say Be Careful Claiming Carbon Neutrality
March 11th, 2009
With more and more firms claiming “green” credentials, the Commerce Commission has issued draft guidelines for consultation to help businesses stay on the right side of the Fair Trading Act. The guidelines follow a number of instances where claims of carbon neutrality or carbon reduction have been contested or over-stated. In particular, the Landcare Research Ltd CarbonZero programme has seen its logo taken in vein numerous times in the last couple of years, and at least one taxi company has fallen foul of over-promising on its carbon reduction credentials.
As always, the key consideration when complying with the Fair Trading Act is “the overall impression formed in the consumer’s mind.” In other words, just claiming you didn’t mean to be misleading is not a defence if a Court finds this was the impact of your claims. The Commerce Commission warns, for example: “if you advertise (carbon) offsets which sequester carbon through tree planting, but fail to disclose the planting of those trees will not occur for several years, this could constitute misleading by silence.”
The draft is worth a careful read by any business contemplating environmental claims based on carbon reduction, as the area is a minefield.
Examples:
• Claims a product has carbon-reduction benefits must be capable of substantiation.
• Claims of this kind must not be over-stated in reference to any particular product or service.
• Just because there is no standard for carbon offsets doesn’t mean you can ignore the FTA.
• Inappropriate or poor quality offsets can place you at risk, as can the absence of adequate insurance on offsets such as forestry planting, which are subject to fire risk.
• You can’t claim carbon reduction gains for upgrades or replacements that you were going to undertake anyway. This concept of “additionality” – doing more than the status quo – is crucial to achieving carbon reduction and to the truthfulness of claims in this area.
• Always ensure you are buying “retired” carbon offsets. If you don’t, there’s a risk they will be re-traded and your contribution will be negated by what is, in effect, double-dipping on the same set of offsets.
• If your offsets are for activities occurring in the future, you need contractual commitments from the supplier these actions will occur or there will be replacements offered if it doesn’t.
The guidelines also point out that there is no universally accepted definition for the term “carbon neutral,” so it “should not be used indiscriminately” and raises the bar for not misleading consumers. Likewise, a “low carbon” claim is “meaningless without context or comparison.”
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