Dutch Advertising Code Foundation publishes (new) Code for Sustainability Claims

In view of the time that has passed since the MRC was last updated, updating the advertising code for sustainability claims was essential. While the CDR responds to a need from advertisers for clearer rules, it also appears to have been prompted by an increase in complaints related to sustainability claims and the development of new legislation and guidance in this area.

In short, the CDR regulates claims related to environmental and/or ethical aspects of products, services and activities.

Background

The CDR is part of the Dutch Advertising Code (Nederlandse Reclame Code, NRC), which is widely accepted self-regulation in the Netherlands. The rules are based on the Dutch Unfair Commercial Practices Act, the Dutch implementation of the EU Unfair Commercial Practices Directive (2005/29/EC), and the EU Audiovisual Media Services Directive (2010/13/EU).

The NRC consists of a general section that applies to all advertising and special advertising codes that apply to specific advertisements, such as the CDR for sustainability claims. The NRC is drafted by the Dutch Advertising Code Foundation (Stichting Reclame Code, SRC). The Dutch Advertising Code Foundation also facilitates the Dutch Advertising Code Committee (Reclame Code Commissie, RCC), which assesses complaints about advertisements based on the NRC. Complaints can be filed by consumers and companies, such as competitors.

The Dutch Advertising Code Committee cannot impose any fines, but will make a recommendation if an advertisement is deemed misleading. The recommendations are widely followed and can sometimes lead to negative press.

The NRC has been translated into English here, but please note that the current translation of the NRC still contains the old MRC.

Scope and changes

Under the new CDR, the main rules that applied to sustainability claims under the MRC remain the same. In summary, sustainability claims must not be misleading and must also be verifiable. The more general or absolute the claim, the stricter the requirements for evidence. Absolute sustainability claims are claims with absolute terms such as "environmentally friendly", "green" or "fair". There are also a number of important changes and additions, which we will explain below.

What are sustainability claims?

First, unlike its predecessor, the CDR covers all sustainability claims, i.e. both environmental and ethical claims. From the definitions of both these types of claims, it follows more specifically which claims are regulated by the CDR.

Environmental claims are claims that suggest or otherwise give the impression that a product or activity has a positive, less or no impact on the environment. These claims may, for example, address the environment in general or certain aspects of the environment, such as air, water, soil, ecosystems, biodiversity or climate. The (new) definition of environmental claims seems to follow the definition as included in the Guidelines regarding Sustainability Claims from the Dutch regulator for consumers and markets (Autoriteit Consument en Markt, ACM). See this article for more information on this guideline.

Furthermore, a definition of ethical claims has been introduced. Ethical claims are claims that give the impression that a company's production or activity has taken place in accordance with certain ethical standards, for example with regard to general working conditions, animal welfare and/or corporate social responsibility. This definition corresponds almost entirely to the definition of ethical claims in ACM’s Guidelines regarding Sustainability Claims. Ethical claims are now the subject of a special advertising code for the first time. Before this, the RCC assessed these claims using the general section of the NRC.

An example of an environmental claim is the claim that a product or service is CO₂ neutral. An ethical claim is, for example, a claim about animal welfare (for example "100 per cent ethical fur").

Sustainability ambitions and sustainability symbols

The CDR contains a (new) article on sustainability ambitions. Pursuant to the CDR, in communication about sustainability ambitions, it should be sufficiently clear that it is a commitment or goal and not the current situation.

With regard to sustainability hallmarks, indications and symbols the new CDR contains additional guidance. For instance, it refers to Milieu Centraal's Hallmark guide (Keurmerkenwijzer). This guide could help advertisers find a hallmark in which they want to participate. The guide also provides insight into the requirements, control measures and transparency of different hallmarks.

Concrete and verifiable claims

The CDR focuses on the need for claims to be concrete and verifiable. This is illustrated by some (new) examples that are included in the CDR. In the context of comparative sustainability claims, "this product is more environmentally friendly" is cited as an example of a claim that is unclear. An example of a permissible comparative sustainability claim is "We have been selling more animal-friendly chicken since this month, because we no longer sell 1-star Better Life chicken, but 3-star Better Life chicken." Concrete and verifiable? Definitely. Catchy? Perhaps not.

Relationship to other initiatives and final comments.

With the CDR, the SRC has aligned its self-regulation on sustainability claims, among other things, with the ACM’s Guidelines regarding Sustainability Claims of 28 January 2021. As European legislation on (the substantiation of) sustainability claims is also in the pipeline, the CDR will be reviewed after a year and adjusted where necessary.

Interestingly, unlike its predecessor, the CDR does not contain a conflict provision to prevent the accumulation of rules. Article 12 MRC provided that, if government authorities issued specific new rules or legislation on environmental advertising, the MRC would no longer apply to the relevant topic. The SRC has clearly made a different choice with the CDR as the CDR will be adapted if new legislation is issued and not become inapplicable.

It, thus, appears that the SRC wants to continue to provide a regulatory framework in addition to (but in line with) existing legislation and the interpretation thereof by the ACM in the Guidelines regarding Sustainability Claims. A remarkable, but defendable choice. In our view, the CDR can well coexist with the upcoming European legislation and the ACM's Guidelines regarding Sustainability Claims, provided that it is sufficiently guaranteed that the RCC does not apply different standards in its decisions, for example, with regard to the substantiation of a claim, than required under current (or future) laws and regulations.