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Deceptive Green Advertising

Deceptive Green Advertising

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A fast-track analysis by the Hungarian Competition Authority (GVH) has found that in many cases, companies' advertising communications suggesting sustainability are not backed up by easily accessible and relevant evidence for consumers. The result of the fast-track analyses was disclosed on 17 February 2023.

In November 2022, GVH launched a detailed market analysis to investigate the discrepancies between the actual content of different sustainability advertising messages and the way they are perceived by consumers. With this, GVH aimed to provide legislative input for the introduction of a coherent system of claims and labelling, which would enhance consumer trust. As part of the market analysis, GVH carried out a comprehensive sweep of 60 domestic websites.

The results of the analysis show that domestic businesses communicate sustainability in a very broad and unsystematic way. According to GVH, generic statements (“green”) are common, as well as that the explanation and substantiation of a claim in Hungarian is only available to the consumer in English. Undertakings try to justify their sustainability ambitions without specifics (“by buying, you are contributing to our environmental goals”). Many businesses use logos to demonstrate their “green” credentials, but the certification body or criteria behind them are not always identifiable to consumers. And in the case of certain grammatical adjectives (“more sustainable”), it is not clear to what extent the product has a more positive impact on the environment.

GVH's investigation also identified good practices to follow. Examples include a “sustainability glossary” to help interpret green claims or a transparent and understandable presentation of the company’s environmental activities. Consumers can also be better informed through validated annual sustainability reports available on the website, provided they are transparent and well-structured. GVH's comprehensive market analysis is expected to be completed in the summer of 2023.

ByEszter Kamocsay-Berta, Managing Partner, KCG Partners Law Firm

KCG Partners at a Glance

KCG Partners is a Hungarian business law firm providing a comprehensive range of legal services to international and local clients seeking local knowledge and global perspective. The firm comprises business-minded lawyers with sector-specific expertise, creating value for clients by applying a problem-solving approach and delivering innovative solutions.

The firm has a wealth of knowledge in corporate law, M&A, projects and construction, energy, real estate, tax, employment, litigation, privacy and forensics, securitization, estate planning and capital markets.

To address clients’ regional and international concerns, the firm maintains active working relationships with other outstanding independent law firms in Central and Eastern Europe, whilst senior counsel Mr. Blaise Pásztory brings over 40 years’ of US capital market and fund management experience.

KCG Partners Law Firm is the result of the teamwork of passionate and talented lawyers guided by the same principles and sharing the same values: 

  • Our most valuable asset is our people. They are the engine of our business and the key to our success.
  • We push boundaries by looking for innovative solutions that can empower our clients to achieve greater results.
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  • We are driven by our vision to shape and lead the Hungarian legal market and become a first choice law firm in our practice areas.

Firm's website: http://www.kcgpartners.com