France Regulates the Use of Carbon Neutrality Claims in Advertisements
As part of its legislative arsenal to combat climate change, France adopted the Climate and Resilience Law on August 22, 2021 ("Climate Law"), providing for a large number of binding measures against greenhouse gas ("GHG") emissions.
Some of these measures are specifically aimed at preventing greenwashing practices. To this end, article 12 of the Climate Law prohibits companies from claiming in an advertisement that their products or services are carbon neutral, or using any wording of equivalent meaning or scope (e.g., "zero carbon," "climate neutral," "fully offset") unless they can make available to the public the following information:
- A GHG emissions report integrating the direct and indirect emissions of their products or services;
- The process by which the GHG emissions of their products or services are: (i) avoided, (ii) reduced, or (iii) offset and the plan for GHG emissions reduction; and
- The methods for offsetting residual GHG emissions that comply with minimum standards.
In order to provide guidance for the implementation of article 12 of the Climate Law, the French government adopted a decree on April 13, 2022 (Decree n° 2022-539), which comes into force on January 1, 2023. According to this decree, companies will have to prepare a summary report containing:
- The annual GHG emissions covering the entire life cycle of the advertised products or services, prepared in accordance with the requirements of standard NF EN ISO 14067 or any other equivalent standard;
- The reduction plan for GHG emissions associated with the advertised products or services, with annual progress targets over 10 years. An updated plan covering a further 10-year period is published every five years; and
- The details of the arrangements for offsetting residual GHG emissions, specifying, for example, the nature, the description, and the cost of the offsetting projects.
This summary report shall be updated annually in order to monitor the evolution of GHG emissions in comparison with the defined reduction plan. In the event that the emissions associated with the products or services before offsetting increase between two consecutive years, the company will have to withdraw the carbon neutrality claim from its advertisements.
In addition, a second decree (Decree n° 2022-538), also adopted on April 13, 2022, sets out the conditions under which the noncompliance with the above-mentioned requirements could be subject to administrative sanctions. According to this decree, the Ministry in charge of the environment must first send a letter to the noncompliant company, which will have one month to provide its response. Based on the response, the Ministry may then issue a formal notice requiring the company to comply with its obligations within a given period of time. If the company does not comply with the formal notice within the specified period, the Ministry shall then order the payment of an administrative fine of EUR 100,000, which may be increased to the full amount of the expenditure on the noncompliant advertisement.
At a time when companies' climate commitments are at the heart of civil society's expectations, this new regulation provides a framework for the growing number of climate claims made in advertisements, with strict criteria to ensure their legitimacy and limit the risks of greenwashing.
