In 2021 the ASA’s Climate Change and the Environment project identified two priorities for consumer research.

The first concerned consumer understanding of “carbon neutral” and “net zero” claims in advertising given their increasing prevalence and the potential for consumers to be misled by them.

Our project also identified consumer understanding of common advertising claims for hybrid and electric vehicles. As consumers switch from internal combustion engines, there has been a proliferation of claims made in advertising for newer technologies, and we wanted to explore the potential for consumers to be misled by them.

Our commissioned research is now complete, and we are pleased to share our report on consumer understanding of 'net zero' and 'carbon neutral' claims in ads.

Read our research into carbon neutrality and electric vehicle claims.

This article explores some key findings from the two studies, our reflections on them and our next steps.

Carbon neutral and net zero claims in advertising

Key findings from the consumer research:

• There is a broad spectrum of consumer engagement on environmental issues, influencing their understanding of, and reaction to, environmental claims
• Carbon neutral and net zero were the most commonly encountered claims, but there was little consensus as to their meaning.  There were calls for significant reform to simplify and standardise the definitions of such terms and for claims to be policed by an official body, such as government
• Participants tended to believe that carbon neutral claims implied that an absolute reduction in carbon emissions had taken place or would take place. When the potential role of offsetting in claims was revealed, this could result in consumers feeling that they had been misled
• Claims in air travel, energy and automotive advertising tended to attract more attention, and the potential role of offsetting, when revealed, could result in greater disappointment. Participant reactions suggested the need for transparency is potentially greater in those sectors
• Participants called for more transparency about offsetting and target dates in ads

Insights and next steps:

Carbon neutral and net zero claims are increasingly used by organisations to promote how they are seeking to meet climate targets. The use of such terminology and the evidence and systems on which such claims should be based divide opinion, can be complex and encompass broader issues than those falling within the remit of the ASA system to resolve. We understand some of these concerns include the effectiveness and validity of some offsetting schemes.

The ASA also understands that there are no definitions fixed in law that govern the basis on which such claims may be used or firm consensus on what these terms mean. However, credible sources of authority suggest that carbon neutrality claims may be made by organisations based on the concept of balancing the amount of carbon emitted with the amount removed. Many organisations achieve this through offsetting schemes. On the other hand, net zero claims made by organisations may be based on absolute reductions that are consistent with climate target goals alongside neutralising residual emissions. They may also refer to other greenhouse gases.

Our research shows that there is consumer confusion about the meanings of such claims and the basis on which they are substantiated, and that participants called for such claims to be simplified and standardised. In particular there was low consumer understanding of what carbon neutrality is, low understanding of what offsetting is and that consumers felt misled when the role offsetting was playing was explained to them.   

Legal requirements constrain us from mandating definitions of such claims or the technical requirements that support them, and instead we must assess claims on a case-by-case basis taking account of the substantiation provided to support them. We note, however, that in March 2022 the Competition and Markets Authority (CMA) provided the Government with environmental sustainability advice that includes a recommendation to: “Create statutory definitions of commonly used environmental terms, such as biodegradable, compostable and carbon neutral.” 

We will be sharing our research findings with Government as it continues to consider the CMA’s advice.

The ASA and CMA have both produced Guidance on green claims, including on how carbon neutral and net zero claims can be made by businesses. In the light of our research we will be updating our Guidance  before the end of 2022, ensuring consistency with the CMA’s Guidance. Such Guidance is likely to make clear that organisations making these claims must ensure that they adequately explain the basis on which they are made, even where such advertising is constrained by space or time.

Following publication of updated Guidance, we will carry out a six-month monitoring period in which we will assess the impact of the Guidance on carbon neutral and net zero claims in advertising. We will also gather information to assess how such claims are being substantiated. 

If that monitoring concludes that carbon neutral/net zero claims are being made but the types of evidence that underpins them is questionable, our sister body the Committee of Advertising Practice will launch a review which will seek to provide guidance about what forms of evidence are more or less likely to be acceptable to substantiate such claims in advertising. That review will take account of expert insights, policy developments in the UK and other jurisdictions and, where appropriate, consultation with interested parties.

In the meantime, we are aware that some organisations are making carbon neutral and net zero claims which are entirely unqualified and do not explain the basis on which they are being achieved.  Unqualified claims are likely to breach existing rules, and the ASA will be taking proactive action immediately to crack down on such claims.

Electric and hybrid vehicle claims in advertising   

Key findings from the consumer research:

• The car purchasing process has become more complex with the need to understand the differences between the technologies, the meaning of terminology, the appropriateness of each option for different lifestyles and the financial implications of each option
• Participants were conscious of the novelty of the technologies and the pace of change, and these uncertainties were exacerbated by a perceived lack of reliable and straightforward information and guidance. Participants called for authoritative independent guidance to be produced that explains factors such as actual vs theoretical miles per charge/gallon and range and charging information
• Participants found it difficult to understand the different hybrid options; they found the meaning of some terms, such as ‘mild hybrid’, to be particularly unclear. The meaning of ‘PHEV’ (plug-in hybrid electric vehicle) also caused some confusion
• Participants often struggled to identify which type of engine had been featured, for example whether it was PHEV or fully electric
• Participants also felt that key information such as range, charging capacity and ‘greenness’ relative to competitor products was unclear. They said ads would be clearer if they stated the vehicle type up front and used terms and images only to clarify the model type. They interpreted an ad showing a car being charged to mean the vehicle was ‘fully electric’.
• Some participants expressed a particularly strong preference for ads to make clear that mileage figures such as WLTP (Worldwide Harmonised Light Transport Vehicle Test Procedure) did not necessarily reflect real world driving conditions.
• Participants noted the potential to mislead in ads that used vague ‘green’ imagery and messaging that wasn’t attributed to any specific actions.

Insights and next steps:

As was the case with our carbon neutral and net zero research, these findings indicate that consumers are struggling to navigate the complex terminology and technical specifications of these vehicles, and that there is therefore the potential for them to be misled. The ASA is unable lawfully to mandate fixed definitions for terminology or technical specifications used to substantiate performance claims, and many of the issues identified as potentially problematic relate to business practices that are outside the remit of the ASA. 

We will be sharing our research findings with Government and the automotive industry to enable them to make their own assessment.

Drawing on the outcomes of the research more widely, we will carry out desk research to revisit some of the decisions that the ASA has made in the past. We will then identify which areas of precedent (and any guidance based on this precedent) requires further consideration. The claim “self-charging hybrid” is an example.

CAP will identify existing Guidance resources that need to be updated to include relevant advice flowing from the research findings, such as pointing out the greater risk of misleadingness if multiple terms are used in a confusing manner, or if ads feature vague and non-specific implied environmental claims.

Finally, the ASA will conduct targeted investigations to establish precedent cases related to compliant and non-compliant claims. These could include the omission of explanations of the meanings of terms (for instance ‘PHEV’), creative overclaim around the use of images, and claims on range and charge time as they are currently presented. The rulings that result from these investigations will establish precedents, inform future guidance and set new industry norms about information that should be included in advertising.

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