The Netherlands Authority for Consumers and Markets (ACM) has conducted an investigation into misleading sustainability claims in the energy sector, assessing the claims of 10 major energy suppliers. On the basis of its findings, ACM will now launch a follow-up investigation into two energy suppliers where ACM found the highest number of misleading sustainability claims.
Edwin van Houten, Director of ACM’s Consumer Department, explains: “We are seeing that some energy suppliers present themselves as more sustainable than they actually are. As a result, consumers are unable to see the difference between businesses that invest a lot in sustainability and businesses that do not. This leads to distortion of competition, and harms the confidence that consumers have in sustainability claims. That is why we are taking action against these practices, which may include imposing sanctions on companies.”
Investigation into energy sector
In late May 2021, ACM contacted the more than 60 energy providers that supply energy to consumers, asking them to take a critical look at their own sustainability claims. They had until mid-June to do so. ACM subsequently checked sustainability-related claims made by ten major energy suppliers for accuracy, clarity, and verifiability of the information. ACM requested additional information from two energy suppliers in order to be able to determine whether or not certain claims that appeared to be misleading were truly misleading.
ACM mostly looked at the companies’ information about:
- The extent to which energy suppliers claim to be sustainable. When making sustainability claims, businesses cannot use vague, absolute or broadly phrased terms without any explanation. When making comparisons, energy suppliers must clearly indicate with whom or what those comparisons are made, and they need to substantiate the comparison.
- The total volume of green power that is supplied, as well as its origins. This information needs to match the information on the power disclosure label;
- The difference between green natural gas and CO2-compensated natural gas.
Examples of bad claims that ACM encountered:
- An energy supplier says it supplies green natural gas, but fails to include in that claim that the natural gas that it supplies only contains a certain percentage of green natural gas.
- An energy supplier says it supplies green natural gas, but in reality, it supplies CO2-compensated natural gas.
- An energy supplier claims to be ‘a leader in sustainability’, but fails to explain what it means by that claim.
- An energy supplier uses its ranking in a comparative study on sustainability in order to present itself as sustainable, but provides too little information about the value and meaning of that ranking.
Guidelines regarding sustainability claims
Last year, ACM published five rules of thumb for honest sustainability claims, thereby providing businesses with guidance. ACM then launched investigations into misleading sustainability claims in the clothing, energy and dairy sectors, because ACM saw the most sustainability claims in those sectors. ACM already published the results of the investigation into the clothing sector.
ACM and sustainability
ACM ensures that markets work well for people and businesses, now and in the future. Sustainable products and consumption are important in the transition to a more sustainable society. With its oversight over sustainability claims, ACM plays its part in that process. Consumers must be able to make sustainable choices with confidence, and businesses that undertake sustainability efforts must be protected against other companies that compete unfairly by using misleading claims.