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Regional Court of Frankfurt am Main’s decision on various climate neutral claims - judgment

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Both parties distributed cleaning products to professional customers nationwide. The defendant had been certified by an external company as a ‘climate neutral company’. The defendant used this certificate in their advertising, such as ‘climate neutral company’ and ‘climate neutral hygiene’. 

Furthermore, the defendant had created and used a Youtube advertising video with such advertising claims. This video contained a URL with the website of the defendant with an explanation. The explanation contained comments about avoiding and compensating their emissions, using the ISO 14067 standard. It also included another URL where more information could be found. 

Next to the video, the defendant had also included an advertising on ‘climate neutrality’ on their website. The website included another URL where initial information on the topic could be found. The plaintiff argued that these advertisings were misleading. 

The Regional Court of Frankfurt am Main found the advertising claims in the video to be misleading by omission and in breach of §5a para. 1 as neither the video nor the referenced website included necessary background information. The Court elaborated that the claim ‘climate-neutrality’ required a great deal of explanation. Without the appropriate background information, the claim of climate-neutrality remained opaque for the target market, whether consumers or professional buyers. The Regional Court stressed the importance of the manner that climate-neutrality was achieved, as only in this context could buyers assess how high the company’s efforts were to reduce or compensate their CO2 emissions. Ultimately, the claim ‘climate neutrality’ depended on the standard applied. According to these standards, it was only possible for buyers to assess whether a company was really concerned with its own reduction of CO2 emissions or whether it was merely ‘greenwashing’ if the company communicated the essential circumstances of climate-neutrality in clear and comprehensible manner.

The Court set out the specific disclosure requirements:

Assessment basis (Reference object: company or product);
Standard of calculation;
Excluded emissions;
Scope of own CO2 reduction measures and their savings effect, in particular in relation to CO2 emissions prior to implementation of the reduction measures;
Type of compensation;
Type and subject of the supported and / or self-implemented climate project and its CO2 reduction effects.

Furthermore, the Regional Court found the advertising on ‘CLIMATE NEUTRAL COMPANY certified by Fokus’ on the website of the defendant to be a misleading commercial practice and in breach of § 5 para. 1 of the German Act against Unfair Competition. This claim was misleading because it had been advertised without further information and because it was unclear on which basis the certification of climate neutrality had occurred. Even though another website had been referred to in the advertisement, necessary information was lacking there too. A further reference on that website did not suffice as nested information remained unclear. Instead, the Regional Court held that the information should be presented in a compact manner on a single website, using transparent and clear language. 

Regional Court of Frankfurt am Main’s decision on various climate neutral claims

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An aim to achieve a quantifiable outcome within a given time-frame, set by an institution such as a national government.

Policy instruments are techniques or tools used by governing authorities to promote certain policies in order to achieve predetermined goals. Put simply, instruments are how a government tries to achieve its goals, with this taxonomy being focused on national policy instruments.

Risk is the potential for adverse consequences resulting from the dynamic interplay between (climate-related) hazards, exposure, and vulnerability of affected human or ecological systems.

Groups  of people who are adversely affected by climate change or the response to it

A set of principles, processes, and practices that build economic and political power to shift from an extractive economy to a regenerative economy.

Renewable energy means all forms of energy produced from renewable sources in a sustainable manner.

Fossil fuel is a generic term for non-renewable energy sources such as coal, fossil gas, and oil (including crude oil, and petroleum products), that can be used for electricity and heat generation. Fossil fuels are hydrocarbons formed from pressurised and heated organic material buried over millions of years.

Molecules in the atmosphere that play a key role in the greenhouse effect by trapping heat radiating from Earth’s surface.

Area of the economy in which actors engage in identical or related activities.

In human systems, the process of adjustment to actual or expected climate change and its effects, in order to moderate harm, increase resilience or exploit beneficial opportunities. In natural systems, the process of adjustment to actual climate change and its effects; human intervention may facilitate adjustment to expected climate change and its effects.

The management and allocation of funds, assets and investments to meet various objectives

A long-lived, colourless gas, chiefly emitted from fossil fuel combustion, deforestation and cement production.

This sector involves the wholesale and retail selling of goods.

A subsidy is a direct or indirect payment to individuals or businesses, typically provided as a government cash payment or a specific tax reduction.

Tradable permits are market-based tools that grant permission for specific activities, frequently used to regulate emissions. These permits can be issued within a trading system to manage environmental impacts.

Either money or something of monetary value is transferred between two or more organisations, people or countries.

Activities that involve planning, designing and building infrastructure, residential, and commercial structures.

Production of electricity and heat from solar irradiation.

This sector includes firms and individuals offering specialised expertise in fields such as law, accounting, consulting, science and engineering.

The activities of industries that transforms raw materials into finished goods through industrial processes.

This sector creates and distributes information and entertainment through television, radio, print, and digital platforms.

The release of heat-trapping gases, primarily from human activities such as burning fossil fuels, agriculture and industry.

This sector involves activities to move goods and people, alongside the storage of products.

The processes through which enterprises can identify, prevent, mitigate and account for how they address their actual and potential adverse impacts. Due diligence is the idea that reasonable precautions should be taken to avoid causing harm to people, the environment, or society. It also involves identifying and mitigating risks before they occur.

Regional Court of Frankfurt am Main’s decision on various climate neutral claims - judgment

Policy instrument

Renewable energy

Greenhouse gas

Economic sector

Finance