ESG Enforcement Tracker

Key facts:

In July 2021, the Regional Court of Kiel found that adding the phrase ‘climate neutral’ on packaging for bin liners was misleading under section 5, paragraph 1 and section 5a paragraph 2 of the Act against Unfair Competition.

The court held that adding the label ‘climate neutral’ on a product and positioning that label close to the company’s logo/brand name could lead the average consumer to assume that this label applied to all products produced by that manufacturer. This was misleading because the manufacturer also produced products that were not ‘climate neutral’.

Additionally, the Regional Court noted that if a company claimed that its products were ‘climate neutral’, consumers should be provided with information on how climate neutrality is achieved; it was not sufficient, as was the case in this instance, for the company to simply indicate its support of Gold Standard certified climate protection projects on its product labels. Instead, consumers should be signposted to a QR code or website on the packaging for further information on how climate neutrality is achieved.

However, this judgment was overturned by the Higher Regional Court of Schleswig in June 2022. Notably, the Higher Court highlighted the following points:

• Consumers did not have to be provided with information on how climate neutrality is achieved, so the packaging was not misleading by omission.
• Adding ‘climate neutral’ on a product label did not suggest that the company manufactured only climate neutral products.
• The label ‘climate neutral’ was unambiguous and it meant that the product in question had a balanced carbon footprint. It did not mean the product had a zero emissions manufacturing process. This was particularly the case where the company had indicated its support for climate protection projects on its labels as a way to achieve climate neutrality.