The UK’s advertising watchdog has banned a group of big oil and gas company advertisements for being misleading as part of crackdown on “greenwashing”, or making something appear more sustainable than it really is.
The Advertising Standards Authority said on Wednesday that recent ads by Shell, Repsol and Petronas had misled the public on the climate and environmental benefits of the groups’ products overall.
The landmark rulings are expected to set a precedent for how energy companies promote their businesses.
The banned ads included a television promotion for Petronas, an online ad for Repsol and poster, TV and YouTube ads for Shell. These ads had “omitted material information” by promoting their “green” offers and plans, such as renewable energy and net zero goals, without any mention of their larger polluting operations, and as such were “misleading”, the ASA said.
In the rulings, the ASA pointed out that polluting products still dominated the businesses of the three companies concerned.
“Large-scale oil and gas investment and extraction comprised the vast majority of [Shell’s] business model in 2022 and would continue to do so in the near future”, yet the ads in question gave the opposite impression, the regulator said.
Repsol, meanwhile, “had a substantial oil and gas exploration strategy”, and the biofuels and synthetic fuels it had promoted in ads this year amounted to “a fraction of [its] business activities when compared to [its] substantial, ongoing, and expanding fossil fuel production”, the ASA said.
Similarly, the public would not understand the “extent of Petronas’ continuing significant contribution to greenhouse gas emissions given the presentation and claims” in a 2022 ad, the regulator added.
Veronica Wignall, from the Adfree Cities campaign group, which led the complaint against Shell, said the ban “marks the end of the line for fossil- fuel greenwashing in the UK. The world’s biggest polluters will not be permitted to advertise that they are ‘green’ while they build new pipelines, refineries and rigs.”
Shell said it “strongly disagreed” with the ASA’s decision. Consumers were “well aware that Shell produces the oil and gas they depend on” but might not know that it was also investing in “low and zero-carbon energy”, the company said.
Repsol said it had allocated about a third of its “total investment to low-carbon businesses for the duration of its 2021-2025 strategic plan”, adding that it was committed to a “just energy transition”. Petronas declined to comment.
The sanctions come as part of the UK regulator’s wider probe into a series of environmental claims across industries including heating and transport.
The regulator has this year cracked down on airlines Etihad Airways and Lufthansa for misleading claims about the environmental impact of flying, while last year it banned ads by HSBC that it judged to have misrepresented the bank’s green credentials, and another by Tesco about its plant-based products.
The ASA is also drawing up rules to govern carbon neutrality and net zero claims more broadly.
Regulators in the UK, EU and US that police advertising, competition and financial markets are turning more of their attention to climate-related disclosures.
Legal and climate experts expect the heightened scrutiny to translate into a growing number of legal cases to challenge potentially misleading claims or breaches of fiduciary duties.
Caroline Lucas, a Green party MP, said greenwashing ads had been “allowed to disseminate fake fossil-fuel news for far too long”. The government should give the regulator greater powers to enable it to “proactively . . . reject these utterly misleading ads” and ban all “high-carbon advertising”, she added.
Additional reporting by Tom Wilson
Climate Capital
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