Higher Regional Court of Frankfurt am Main’s decision on climate neutral claims regarding detergents

This case concerned advertising on detergents as 'climate neutral' by using a respective logo which the claimant, a competitor of the defendant, alleged was misleading and in breach of the German Act against Unfair Competition. While the Regional Court of Frankfurt am Main denied this, the Higher Regional Court partly came to a different conclusion. Disagreeing with the Higher Regional Court of Schleswig, the Court held that advertising of a company or a product as climate neutral may have a significant influence on a purchase decision. It further stated that the term 'climate neutral' had a clear meaning - in contrast to the Regional Court of Frankfurt am Main which had stated the opposite and held that it could be mixed up with the term 'emission free'. The Court elaborated that average consumers understood climate neutrality in the sense of a 'balanced balance sheet'. Furthermore, it held that climate neutrality could be reached through emission reduction as well as compensation measures. Consumers had to know whether climate neutrality concerned the whole company and/or certain products. But because emission trading and other compensation measures generally were under the suspicion of greenwashing, consumers had a significant interest regarding the information of the measures taken on behalf of the company in order to reach the alleged climate neutrality. The Court clarified that the following information was necessary: Is climate neutrality reached through emission reduction or compensation measures? Wholly or partially? Are certain emissions excluded from CO2 accounting? Which criteria are used for the assessment of the label? However, it found that the following information was not necessary: Further details of the climate assessment, e.g. extent of reduction measures in relation to the emissions determined or the object of the climate protection project at least with respect to low-value everyday items such as the detergents in question. The Court found the advertising to be misleading regarding the scope of the assessment basis, as the consumers could not know which emissions were included in the accounting methods. It held that, in principle, consumers assumed that all significant emissions were compensated. Because the defendant had not considered significant scope 3 emissions and there was no explicit information clarifying this, the Court found this to be misleading.