South Africa ARB: Greenwashing Rulings Hit TotalEnergies, Shell

• The South African Advertising Regulatory Board (ARB) has issued four rulings against energy companies for making unsubstantiated environmental claims, a practice known as greenwashing.
• TotalEnergies faced two separate ARB rulings for misleading claims about reduced CO₂ emissions from its diesel and its "sustainable development" efforts linked to SANParks support.
• Shell Oil voluntarily withdrew website claims promoting "sustainable fuels" after a complaint argued they created a misleading impression of environmental benefits.
• CNG Holdings was found to have breached advertising codes by describing compressed natural gas as "cleaner, greener," with the ARB noting the omission of material lifecycle impacts and methane's high potency as a greenhouse gas.
• These ARB decisions set a precedent for strict enforcement of advertising codes against broad or unqualified environmental claims, impacting all advertisers in South Africa.

These rulings establish a clear precedent for strict interpretation of advertising codes regarding 'green' claims, increasing compliance risk for unsubstantiated marketing.

The Advertising Regulatory Board (ARB) in South Africa has recently issued a series of significant rulings against major energy companies, signaling a heightened scrutiny of environmental claims in advertising. These decisions, stemming from complaints lodged by the Fossil Ad Ban (FAB) campaign, underscore the ARB's commitment to ensuring that marketing messages about environmental benefits are fully substantiated and not misleading to consumers. The campaign has achieved four successful outcomes against oil, coal, and gas companies, leveraging the ARB's complaints process to challenge what it terms "greenwashing" tactics.

Among the companies targeted was TotalEnergies, which faced two separate adverse rulings. In one instance, the ARB upheld an earlier decision concerning a claim on TotalEnergies' website about its Excellium Diesel D10 fuel. The company had asserted that the fuel led to "Lower CO₂ emissions: Reduce polluting emissions by improving the peformance [sic] of your engine." FAB contended that this environmental claim lacked the necessary substantiation. While tests indicated a 3.6% reduction in CO₂ under specific conditions using a single Volkswagen T-Roc Euro 6 vehicle, the ARB found that the claim was presented as an unqualified, general environmental advantage, leading consumers to overestimate its benefits and lacking applicability to other vehicles. TotalEnergies' subsequent appeal against this ruling was unsuccessful, with the ARB reaffirming its original finding on September 10.

TotalEnergies faced a second rebuke from the ARB following a complaint filed by FAB in May 2024. This case centered on a claim of "sustainable development" made by the company, based on its long-standing support for South African National Parks (SANParks). The assertion appeared on a webpage promoting the #FuelYourExperience competition, which encouraged visits to national parks. While the ARB acknowledged TotalEnergies' more than 60 years of support for SANParks could be seen as an environmental commitment, it ultimately ruled in August 2024 that the claim was misleading and violated the Code of Advertising Practice. The Board highlighted that the company's primary business of fossil fuel exploitation directly contradicted the principles of sustainable development, a finding that TotalEnergies unsuccessfully appealed.

Shell Oil also came under scrutiny for a series of claims on its website promoting "sustainable fuels" and "innovative fuels and lubricants." FAB argued that these claims created a deceptive impression by portraying fossil fuels as environmentally beneficial without adequately reflecting their full climate impacts. During the ARB's review process, Shell voluntarily chose to withdraw the contested claims, avoiding a formal ruling.

The ARB's enforcement actions extended to CNG Holdings, a Johannesburg-based methane merchant. The company's website described compressed natural gas (CNG) as "a cleaner, greener fuel option that promotes a sustainable future" and "environmentally friendly." The ARB determined that these claims were misleading and breached the advertising code. It concluded that a reasonable consumer would likely interpret these unsubstantiated descriptions as indicating "overall environmental benefits," while crucial "material lifecycle impacts" were omitted. The Board specifically noted the relevance of these omissions given that the product is a fossil fuel and the unmentioned information directly pertains to climate-relevant emissions. Methane, the primary component of natural gas, is significantly more potent as a greenhouse gas than CO₂ over a 20-year period, being 84-86 times more impactful, making its reduction critical for addressing near-term climate change. Although CNG Holdings is not an ARB member, it voluntarily removed the claims, and the Board subsequently instructed its members to refrain from publishing any CNG Holdings advertisements that use such broad or unqualified environmental descriptors.

These rulings establish a clear precedent for strict interpretation of advertising codes regarding 'green' claims, increasing compliance risk for unsubstantiated marketing. The implications for advertising practices across South Africa are far-reaching, as the ARB's membership includes influential bodies such as the National Association of Broadcasters, which encompasses all major television and radio stations, and the Marketing Association of South Africa. This broad reach means that the ARB's stance on greenwashing will significantly influence how companies, particularly those in environmentally sensitive sectors, communicate their environmental credentials to the public.

Lawyers and compliance officers advising companies in South Africa, particularly those in environmentally sensitive sectors, must review all environmental claims in advertising to ensure they are fully substantiated and not misleading. These ARB rulings establish a clear precedent for strict interpretation of advertising codes regarding 'green' claims, increasing compliance risk for unsubstantiated marketing.

Source: Original reporting via Fossil Ad Ban campaign