ACM launches investigations into misleading sustainability claims in three sectors

The Netherlands Authority for Consumers and Markets (ACM) has launched investigations into misleading sustainability claims in the following sectors: energy, dairy products, and clothes. ACM has chosen these sectors because it had found many potentially misleading sustainability claims in these sectors in its preliminary investigation. Furthermore, sustainability plays a major role in consumers’ purchase decisions in these sectors. ACM has contacted over 170 businesses in these sectors, calling on them to check the accuracy of their sustainability claims. If businesses mislead consumers about the sustainability aspects of their products, ACM can impose fines.

Edwin van Houten, Director of ACM’s Consumer Department, explains: “We are taking this action in order to stimulate businesses to take a critical look at their sustainability claims, and to check their claims’ accuracy, clarity, and substantiation. We are starting with these three sectors because, for consumers, the aspect of sustainability plays a major role in their purchase decisions in these sectors. Consumers must be able to have confidence in sustainability claims. And businesses with honest claims should not have to face unfair competition from businesses that mislead consumers using misleading claims.”

ACM’s action

In the energy sector, ACM has sent letters to over 60 suppliers, urging them to check their claims. In its letter, ACM cites examples of claims about sustainable energy that are misleading, such as:

• “The majority of our green power is generated in the Netherlands”, whereas the power disclosure label reveals that 20% is generated in the Netherlands, and not 80%;
• “Our performance with regard to the energy transition is the best in the Netherlands”, whereas it is completely unclear what that comparison is based on, and on what metric this business is apparently ‘the best’.

In the clothing sector, over 70 clothing companies have been contacted and asked to take a critical look at their claims. Claims that ACM has encountered in this sector included:

• A clothing company uses the claim ‘T-shirt made of organic cotton’, whereas only 50% of the T-shirt is made of organic cotton;
• An online store offers the option of filtering its clothing range by “sustainability”. Consumers using that filter get to see a selection where all displayed items get the term “sustainable choice” next to them. The online store does not explain what is sustainable about the displayed items.

In the dairy-products sector, ACM has reached out to over 40 businesses. Claims found in the dairy-products sector include:

• It says on the front of a milk carton that the milk is ‘sustainable’. It says on the back that the cows are allowed to go outside often, and that the farm generates its own power. Even with this explanation, it remains unclear to consumers what the sustainability benefit exactly is;
• The following claim is printed on a milk carton: ‘30% less CO2-emissions’. This does not make clear what this refers to. It turned out that the manufacturing process of the packaging generated 30% less CO2-emissions compared with the previous packaging.

Rules of thumb for sustainability claims

Earlier this year, ACM published the rules of thumb for honest sustainability claims:

1. Make clear what sustainability benefit the product offers
2. Substantiate your sustainability claims with facts, and keep them up-to-date
3. Comparisons with other products, services, or companies must be fair
4. Be honest and specific about your company’s efforts with regard to sustainability
5. Make sure that visual claims and labels are useful to consumers, not confusing

ACM is calling on all businesses it has contacted to check their sustainability claims using these rules of thumb. This applies to products sold online and offline. From mid-June, ACM will assess the effect of this action, and will subsequently publish the results thereof. ACM can impose fines or orders subject to periodic penalty payments on businesses that harm consumers with misleading claims they cannot fulfill. Such fines can be as high as 900,000 euros per violation or a percentage of their turnovers.

Consumers can visit ACM’s consumer information portal ACM ConsuWijzer to find out what they should pay attention to when wishing to make sustainable purchases.

ACM and sustainability

ACM ensures that markets work for people and businesses, now and in the future. That is why, in its oversight, ACM takes into account public interests such as sustainability. 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 cannot be put at a disadvantage for doing so.