Dutch regulator publishes final Guidelines regarding Sustainability Claims

By Lisette den Butter, Tessa Van Den Ende

02-2021

Sustainability plays an increasingly important role for companies and consumers when selling or buying products and services. To promote the development of markets for sustainable products and services, the Dutch Authority for Consumers & Markets (ACM) has drawn up five rules of thumb for sustainability claims used by companies when selling their products and services. The rules of thumb are included in the Guidelines regarding Sustainability Claims (Guidelines) which were finalised by the ACM on 28 January 2021.

The Guidelines fall within the legal framework of unfair commercial practices (Article 6:193a of the Dutch Civil Code onwards). This means that the ACM can enforce compliance with these rules when sustainability claims contravene the Guidelines. In addition to the rules of thumb, the Guidelines contain practical examples that can help businesses when phrasing sustainability claims.

Five rules of thumb

The Guidelines contain the following 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

On the basis of the five rules of thumb for sustainability claims companies can make sure that their sustainability claims are clear, truthful and relevant, and will not mislead consumers. The ACM emphasises that honesty, i.e. transparency, is of great importance when phrasing sustainability claims. For each rule of thumb, the Guidelines include a number of examples that can help businesses with the application of the rules of thumb in practice.

It follows from the Guidelines that the term 'sustainability claims', as referred to in the Guidelines, should be interpreted broadly. The ACM explains that the Guidelines apply to all sustainability-related statements, claims, information, labels, slogans, brand names, symbols, pictograms, company strategies, certification labels, certificates, and such that companies use in connection with their products and activities in order to promote sales, either directly or indirectly. Sustainability claims include both environmental claims (related to, for example, biodiversity, ecosystem or climate) and ethical claims (related to, for example, general working conditions, animal welfare or corporate social responsibility).

Lisette den Butter and Tessa van den Ende earlier discussed the draft Guidelines in detail in this article written for the Dutch magazine Juridisch (Legally) up to Date (published in Juridisch up to Date 2020, no. 10, in Dutch). Following the consultation of the draft Guidelines, the ACM has amended and clarified the Guidelines on some points. Among other things, the information regarding visual sustainability claims, labels, and claims on organic products has been amended and some examples have been clarified. The article, however, still provides a relevant overview of the five rules of thumb.

Basis for enforcement

The ACM has clarified that the five rules of thumb serve as a basis for the enforcement of the rules regarding unfair commercial practices (Articles 6:193a-6:193 of the Dutch Civil Code) and (comparative) advertising (Articles 6:194-6:196 of the Dutch Civil Code). Misleading or incorrect sustainability claims will be regarded as an unfair commercial practice for which the ACM can impose fines up to EUR 900,000 or 1% of the company's annual turnover. The examples included in the Guidelines serve as illustrations of sustainability claims that could be considered misleading. Whether a specific claim will, in practice, be regarded as misleading depends on the relevant circumstances.

In the press release regarding the final Guidelines, the ACM underlined that sustainability is one of the ACM's key priorities in 2021. The ACM also explicitly mentioned that, in its preliminary online study of sustainability claims, it has come across examples of misleading or incorrect sustainability claims in various industries, such as food, clothing, cosmetics, and domestic appliances. These findings will be taken into account in choosing the industries where ACM will start enforcing the rules regarding misleading sustainability claims

Guidelines on Sustainability Agreements

In addition to the Guidelines regarding Sustainability Claims, the ACM recently also published the revised Guidelines on Sustainability Agreements. These Guidelines clarify in what situations competitors are able to work together in order to realise other sustainability objectives. For more details, please refer to this article by our colleagues Piet-Hein Eijssen and Joost van Roosmalen.