Netherlands: Advertising Code Board and

in short

Legal action against sustainability or green claims (“greenwashing”) continues to increase. Consumers and NGOs are increasingly seeking legal avenues to hold companies accountable for allegedly misleading sustainability advertising. One such avenue in the Netherlands is the Advertising Code Council (ACC), which regularly handles complaints about greenwashing and other potentially misleading statements. As a result of this development, the use of sustainability advertising increasingly exposes companies to regulatory risks. This blog provides a brief overview of the operations of the ACC and the rules that apply to sustainability advertising.¹

In the Netherlands, the ACC handles consumer and business complaints about allegedly misleading advertising. More and more consumers and businesses are complaining to the ACC about sustainability advertising; the number of complaints in which the word “sustainable” appears has increased dramatically over the past five years.² If absolute terms such as “eco-friendly”, “green”, “good for the environment”, “zero CO2” and “clean” are used in advertising without sufficient evidence, misleading sustainability claims may already exist. Furthermore, the number of complaints against sustainability claims is only expected to increase. This increase may also affect court proceedings. Court proceedings applying a broadly similar legal framework may result in greater legal consequences.

Advertisers should therefore be aware of the existence and powers of the ACC and the rules that apply to sustainability advertising. Advertising with sustainability claims carries risks and advertisers should consider the possibility of complaints to the ACC from consumers, competitors or other third parties. In this blog, we briefly explain what the ACC is, what its powers are, and the regulatory framework for sustainability advertising in particular.

What is ACC?

ACC(Advertising Code Board Dutch) is an implementation of the Dutch Advertising Code ((DAC), Dutch: Dutch Advertising Law). The DAC contains Dutch advertising rules that every advertiser must comply with. DAC was created with the help of business and consumer organizations and is a form of industry self-regulation.

The ACC will not proactively enforce the DAC, but will review complaints from individuals, companies and other third parties when it believes an advertisement violates the DAC.

What is advertising and who are advertisers?

Advertising is defined in Article 1 of the DAC: Advertising is “any public and/or systematic presentation of goods, services and/or ideas by or on behalf of the advertiser, in whole or in part, with or without the assistance of third parties direct or indirect recommendation”. party. An advertiser is an “organization or person other than a consumer”. The DAC does not apply to announcements that contain no element of recommendation at all (the ACC cites as an example a company providing information about opening hours), or announcements about goods, services or ideas , in which no one is induced or influenced in any way.

As mentioned above, the terms advertising and advertiser are broadly defined. Therefore, ads from non-consumer organizations or individuals will quickly fall within the scope of DAC.

What powers does the ACC have?

The ACC handles complaints about advertising submitted by consumers and businesses via a complaints form. If the complaint is declared admissible and is not dismissed by the Chairman, the complaint will be dealt with in the proceedings. Generally, complaints will be forwarded to the advertiser. Advertisers have the opportunity to respond to the complaint in a statement of defence. The ACC can then also give the plaintiff and defendant an opportunity to reply or rebut. Finally, there is an oral hearing. Procedures before ACC can be concluded in three ways:

• If the ACC considers the complaint to be unfounded, it will be dismissed.
• If the ACC considers that the complaint is (partly) substantiated, it will “advise” the advertiser not to place the ad in question.
• If the advertisement only promotes an idea (and therefore does not promote services or goods), and the ACC considers that the complaint has (partial) merit, the ACC will give a “non-binding opinion”.

If an advertiser does not follow the ACC’s recommendations, the information will be posted on the AdCode Foundation’s website and the advertiser will be marked as “non-compliant.” The ACC can then notify the Authority for Consumers and Markets (ACM), who may decide to take enforcement action. The ACC itself has no further powers to enforce its rulings and cannot impose any other type of sanctions. In most cases, advertisers will comply with the ACC’s recommendations and be marked “Compliant” on the ACC website.

What rules apply to advertising?

The DAC contains a general section with rules that apply to any type of advertising. Some of these rules are based on the provisions of the Unfair Commercial Practices Act set out in Articles 6:193a-193j of the Dutch Civil Code. For example, these rules state:

• Advertising should be legal, truthful, tasteful, and decent;
• Advertisements should not be unnecessarily offensive or pose a threat to mental and/or physical health;
• Advertising should not cause gratuitous fear or superstition;
• Advertising should not be unfair, including advertising that is misleading and offensive in any context; and
• The ad itself should be legible while also taking into account its target audience.

In addition to the general section, the DAC also contains so-called “Special Advertising Codes”, which provide specific rules for certain topics. These include, for example, rules about alcohol, gambling advertising, or advertising aimed at children.

One particular advertising code that has received more attention recently is the Sustainable Advertising Code. The code contains strict rules for advertising containing sustainability claims. Sustainability claims include environmental and ethical claims. Environmental claims are statements that imply or give the impression that a product or activity has a positive, small, or no impact on the environment. An ethics statement creates the impression that a company’s production or other business activities are conducted in accordance with certain ethical standards. These claims must not be misleading.

In order to determine whether a sustainability claim is misleading, the following circumstances are important:

• Sustainability claims should be made in a clear, specific, precise and unambiguous way.
• Sustainability ambitions (e.g., company sustainability goals) should be clearly identified as aspirations and should not paint an overly positive picture of achieved and yet to be achieved sustainability outcomes.
• All sustainability claims must be demonstrably true. The burden of proof lies with the advertiser.
• If a sustainability statement relates (almost) exclusively to some specific ingredients of the advertised product, this should be clearly stated.
• Comparative sustainability claims should clearly state which (aspect) of the advertised product or company is being compared between, on the one hand, and which (aspect) of the product or company, on the other hand.
• The origins of sustainability names and sustainability symbols should be clear enough.

Because many sustainability terms do not have clearly defined meanings, as interpreted in the Sustainable Advertising Code, sustainability statements must make clear the advertiser’s specific definition of certain sustainability terms. Importantly, words such as “sustainable”, “environmentally friendly”, “animal friendly”, “green” and “environmentally friendly” will soon be understood by ordinary consumers as absolute sustainability claims.

There are strict rules for this claim of absolute sustainability. Advertisers must be able to guarantee that the results claimed will be achieved. According to the Explanatory Notes on the Sustainable Advertising Code, for most products it is not possible to prove that they are absolutely sustainable, i.e. that all aspects related to the production, distribution, delivery, storage, consumption or disposal of the product are environmentally friendly . and ethically sustainable. It is therefore advisable to exercise a high degree of caution regarding such absolute statements.

Because many advertisers (often unintentionally) use absolute sustainability claims without sufficient evidence or specific definitions of the terms used, the ACC often upholds complaints against them. There are many examples of rulings on sustainability claims being reported in the media.

Given the broad scope of DAC, statements made by a company or organization promoting goods, services or ideas are often considered advertising. This creates the risk of consumers making complaints because they feel a particular claim is misleading. This risk is even greater for sustainability claims, which are subject to strict rules contained in the Sustainable Advertising Guidelines. This results in a considerable and steady increase in the number of complaints each year. This increase is likely not to stop and may also be seen as a sign of a possible increase in similar claims being brought to court. Additionally, the fact that companies are expanding their sustainability initiatives and are naturally keen to educate consumers about these initiatives is also driving further expected increases in claims.

Although the ACC has no further power to compel DAC to comply, the ACC’s ruling may generate negative publicity and lead to possible further investigations by the ACM. The ACM can use its administrative powers and even impose fines. In addition, a well-founded complaint can serve as a “stepping stone” to initiate civil proceedings, for example, a consumer or competitor can seek to ban certain advertising or even claim damages suffered as a result of misleading advertising. This is not easy to prove). It is therefore advisable for advertisers to be aware of these developments and carefully examine their sustainability claims (and their substantiation). In communications about all new sustainability initiatives and targets, consideration must be given to the wording used and its substantiation.

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Read Dutch.

1 A Dutch translation of this article can be found here.

2 A search for the term “sustainable” on the Advertising Code Board website yielded 13 rulings in 2019. In 2024, as of the date of this blog, the same search resulted in 34 rulings.