The ESG Advertising Conundrum: recent case reviews that highlight the challenges of balancing marketing activities and greenwashing risks

A recent decision made by the UK's Advertising Standards Authority (ASA) brings into sharp relief the challenges for airlines to strike a balance between marketing their sustainability efforts in an understandable and compelling way, whilst avoiding criticism for "greenwashing".

In this article we consider the UK decision along with two further decisions in the EU and US, and discuss what airlines can do to reduce the risks of attracting greenwashing claims, and whether the recent cases suggest jurisdictional disparities in the approach towards greenwashing.

• The UK ASA Decision: Flight 100
• How are SAF advertisements being treated in other jurisdictions?
• Is a jurisdictional gulf developing?
• What can airlines do to reduce the risk of complaints
• Concluding thoughts

The UK ASA Decision: Flight 100

The UK ASA decision concerns a Virgin Atlantic radio advert aired shortly before its groundbreaking 'Flight 100', the first transatlantic flight to be performed using solely sustainable aviation fuel or SAF. The advert described the flight as using "100% sustainable aviation fuel", which was ruled to be "misleading" and found to have breached 5 provisions of the UK's Code of Broadcast Advertising (BCAP Code).

History of Flight 100

In 2022 the UK Department for Transport (DfT) launched a net zero transatlantic flight fund competition. The competition's stated aim was to support the aviation industry to achieve the first net zero transatlantic flight on an aircraft using 100% SAF within one year. This was a "world first", as current standards only allow a maximum of 50% SAF to be used on commercial passenger aircraft, with the remaining 50% derived from traditional fossil fuel.

In December 2022 the DfT announced Virgin Atlantic as the winner, with the ambition to perform the flight by the end of 2023, with the assistance of industry partners including Boeing and Rolls-Royce.

The Radio Advert

Virgin Atlantic named the project 'Flight 100' and aired the following radio advert on 24 November 2023, days before it was due to take off:

"On the 28th of November, Virgin Atlantic's Flight 100 will take to the skies on our unique flight mission from London Heathrow to JFK to become the world's first commercial airline to fly transatlantic on 100% sustainable aviation fuel. When they said it was too difficult, we said: challenge accepted. Virgin Atlantic Flight 100. See the world differently."

Five complainants argued that the claim "100% sustainable aviation fuel" gave a misleading impression and challenged whether it could be substantiated.

Virgin Atlantic's response to the complaint:

1. The reference to 100% SAF was in the context of current standards that are limited to a maximum of 50% SAF on commercial passenger aircraft.
2. The wording "100% sustainable aviation fuel" exactly mirrored the DfT's own language.
3. A survey Virgin Atlantic undertook after receiving notification from the ASA about the complaint revealed that nearly 70% of respondents understood from the advert that SAF was better than traditional jet fuel, but was not emission-free.
4. This was not a commercial flight on which consumers could have purchased tickets. Even if information had been omitted about the limitations of SAF, it was unlikely to have been material to consumers' choices.
5. The term SAF is used universally throughout the industry and mainstream media, and the SAF used on the flight had been certified by independent certification entities.

Virgin's website contained further qualifications about Flight 100, including a percentage figure of the reduction of emissions, stating they were based on a full lifecycle analysis, and including fuel burn reductions achieved by operational efficiencies such as reduced taxiing and a direct routing.

What did the ASA conclude?

• Whilst it accepted Virgin Atlantic's survey results, the ASA focused on the minority view that SAF had no environmental impact at all, and highlighted that a significant minority of respondents gave inconsistent answers about whether SAF was emission-free, which underscored consumers' general confusion.
• The ASA also accepted Virgin Atlantic's calculations of the CO2 savings, but noted these weren't communicated in the advert.
• It commented that there were other negative environmental impacts of SAF, including the fact that the production of biofuels for aviation may cause other sectors to revert back to fossil fuels, and a change in land use to produce biofuels may have other negative implications.
• The ASA took a broad view on factors that would influence consumers, concluding that whilst Flight 100 was not a commercial flight, the information about SAF and its limitations constituted material information that would impact the transactional decisions of those listeners, as it would affect their overall impression of Virgin Atlantic's environmental efforts.
• Ultimately, the ASA concluded that the unqualified claim of 100% sustainable aviation fuel in the advert was misleading, and directed Virgin Atlantic to ensure that future communications referring to the use of SAF include qualifying information which explain the environmental impact of the fuel.

The ASA's ruling underscores the scrutiny that environmental claims by airlines increasingly face.

How are SAF advertisements being treated in other jurisdictions?

In the EU: Scrutiny is similarly increasing. On 20 March 2024 the first ever greenwashing judgment against an airline was made by the Dutch Court of Amsterdam against KLM. The Court ruled that 15 out of 19 environmental statements made by KLM were misleading, and commented that the statements painted an "overly rosy picture" of the positive effects of SAF. Shortly after the KLM judgment, on 30 April 2024 the European Commission and the EU Network of Consumer Protection Cooperation issued letters to 20 European airlines identifying potentially misleading practices, which included "using the term SAF without clearly justifying the environmental impact".

Is a jurisdictional gulf developing?

In the US: A class-action was recently brought in a federal court against United Airlines alleging that the representation of its SAF consumption was false and misleading. A United Airlines customer brought the claim after choosing to pay higher prices to fly with the airline, because it publicised its intent to be "100% green" and advertised that it would be the first "in aviation history to fly a passenger flight using 100% sustainable aviation fuel". The customer later discovered that SAF made up just 0.025% of the airline's total fuel supply, and argued that had he known these facts, he would not have chosen to pay the higher prices of United Airlines. In its judgment on 13 August 2024, the claim was dismissed by the Maryland District Court on the basis that this type of claim is pre-empted by the federal Airline Deregulation Act, which expressly prohibits states from "enact[ing] or enforc[ing] any law, rule, regulation, standard, or other provision having the force and effect of law relating to rates, routes, or services of any air carrier." The court therefore did not have the opportunity to consider the question of how the airline had communicated its environmental efforts and use of SAF.

What can airlines do to reduce the risk of complaints

• Be wary of using industry terms such as "sustainable" or "net zero" that incorporate the type of language that advertising authorities object to in the context of a consumer audience, especially if advertising space limits the opportunity to explain terms transparently.
• Avoid absolute terms and introduce appropriate qualifications. If words are limited, sign-posting consumers to further information on a website may mitigate the risk of making unqualified claims.
• Consider all potential interpretations of environmental claims, including minority ones. Miles Lockwood, Director of complaints and investigations at the ASA encourages SAF claims to "spell out what the reality is so consumers aren't misled into thinking that the flight they are taking is greener than it really is".
• Assume that advertisements and public statements will have an impact on customers' choices and could be subject to regulatory scrutiny, even if not directly marketing a product that is available to consumers.
• Ultimately, transparency is key.

Concluding thoughts

These latest decisions are a timely reminder of the growing trend in both regulator and consumer scrutiny over airlines' environmental claims.

The UK ASA decision underscored the need to exercise caution when referring to industry terms in consumer marketing. This will become increasingly important, not just in general marketing, but in specific advertising of ESG products to consumers or the addition of mandatory surcharges on to ticket prices.

The UK and the US have set ambitious targets for the use of SAF in the coming years. In 2021 the US government set a goal of increasing production of SAF by at least 3 billion gallons per year by the end of the decade. Meanwhile the UK government mandates that 2% of jet fuel supplied in the UK next year be SAF, and plans to increase that target to 10% SAF by 2030. Industry stakeholders are focussing their efforts on increasing the production and use of SAF to meet these objectives, and are naturally keen to advertise this to consumers who are becoming increasingly conscious of their carbon footprint. Communication plays an essential role in the aviation industry's transition towards a more sustainable future. This requires on the one hand, transparent, accurate and substantiated information from the aviation industry, and on the other, the creation of an open environment on the part of regulators to facilitate positive engagement between the industry and consumers.