The Swiss Unfair Competition Commission

The Swiss Unfair Competition Commission is an independent, industry-led institution established for the purpose of self-regulation in advertising. Any person is authorized to file a complaint with the Commission about commercial communications that they consider to be unfair. Whether a communication is unfair is assessed based on the relevant legal framework, most importantly the Swiss Federal Act on Unfair Competition ("UCA").

The Commission consists of three chambers in which consumers, media professionals and advertisers are equally represented. The Commission cannot issue binding judgments, only recommendations. Moreover, it has issued fundamental principles and various guidelines on fairness in commercial communication. The Commission's practice provides important guidelines for courts and other authorities when applying openly formulated, relevant legal provisions, which are subject to both civil and criminal sanctions.

The new Guideline on green marketing

On 19 December 2023, the Commission published a new guideline on commercial communication with an environmental or climate reference. The Commission has been confronted with complaints in the area of green marketing for many years but recently noted an increase in the number of these complaints. Recent cases, such as the decisions admitting complaints against FIFA's communication on the climate neutrality of the 2022 World Cup in Qatar, attracted considerable attention.

In view of this, an internal working group examined whether the existing fundamental principles of the Commission needed to be amended. It arrived at the conclusion that the existing legal framework was sufficient to assess the fairness of marketing communications with environmental or climate-related content. Nevertheless, the Commission deemed it important to provide further guidance for companies to assess whether their marketing communications are in compliance with the relevant legal requirements for fair commercial communication. The new Guideline consolidates the previous practice of the Commission in the area of green marketing and incorporates recent international developments (notably the proposed Green Claims Directive in the EU and Chapter D of the ICC Advertising and Marketing Communications Code dealing with Environmental Claims in Marketing Communications).

The Guideline first sets out the relevant hard and soft law standards, starting with the only legally binding provision: Art. 3 para. 1 lit. b UCA. This provision requires that representations, statements and information provided in commercial communications be truthful and clear. Advertisers bear the burden of proof for the truthfulness and accuracy of their communication.

This broad principle is further clarified by Chapter D of the ICC Advertising and Marketing Communications Code, which stipulates that the relevant public may not be misled with regard to the environmental aspects or benefits of the products or activities of the advertiser. Moreover, the relevant statements must be up to date. Vague or nonspecific claims of environmental benefits should be made only if they are valid in all reasonably foreseeable circumstances. In particular, claims such as "environmentally friendly," "ecologically safe," "green," "sustainable," "carbon friendly" or any other claim implying that a product or an activity has no impact — or only a positive impact — on the environment should not be used without qualification unless a very high standard of proof is available.

In summary, while environmental marketing communications are generally allowed, all environmental or climate-related representations, statements and information must be clear and accurate (clarity and truthfulness requirement). These requirements are further clarified in the Guideline:

According to the Commission, the clarity requirement is met if the following requirements are fulfilled cumulatively: 

1. The claims are referred to in concrete terms in relation to the object of the advertisement (product, part of a product, company, etc.).
2. The advertiser provides a transparent explanation so that consumers can understand what measures have led to the environmental or climate-related claims (e.g., through the reduction or avoidance of emissions and/or compensation measures). The information used must be precise and based on generally accepted scientific standards. The explanation must be included in the commercial communication at least in the form of keywords. Web links or QR codes may be used for additional explanation.
3. It must be clear that the advertiser's efforts go beyond what is already required by law and industry practice.
4. The communication must clearly communicate whether the statements are based on current circumstances or future efforts. Future-oriented claims must be clearly identified.

The truthfulness requirement demands that advertisers be able to prove the content of the environmental or climate-related representations, statements and information contained in their commercial communication. Importantly, the Commission clarifies its view on the average addressee's current understanding of the following commonly used green claims: 

• The claims "sustainable," "environmentally friendly," etc. refer to environmental/climate-related measures that clearly go beyond legal or internal industry requirements.
• The claims "CO2-neutral," "CO2-friendly," "CO2-free," etc. refer to measures for the complete avoidance or complete compensation of the greenhouse gas carbon dioxide.
• The claim "CO2-positive" refers to measures that result in overcompensation (more CO2 offset than emitted).
• The claims "greenhouse gas-neutral" or "without greenhouse gases" refer to measures for the complete avoidance of emissions or complete compensation of all greenhouse gases (i.e., in addition to CO2, also nitrogen oxides, methane, nitrous oxide and the so-called F-gases).
• The claims "climate-neutral," "climate-positive," "climate-friendly," "ecologically safe," "green," etc. refer not only to measures for the complete avoidance or the complete compensation of emissions (see above), but also to measures for the neutralization of all negative impacts of a product or company on climate change.

If a complaint is made about these or similar green claims, the advertiser must be able to provide the Commission with plausible and comprehensible calculations based on generally accepted and recognized methods. Any evidence for compensation measures must be presented in a credible manner with regard to their effectiveness. The burden of proof is on the advertiser, who can request that the relevant documents remain confidential.

Key takeaways

Commercial communication with environmental or climate references, if not truthful or clear, may represent an act of unfair competition, which is subject to civil and criminal sanctions in Switzerland.

Given that the relevant provision of the Swiss Unfair Competition Act is formulated in a broad manner, the new Guideline provides important clarification for assessing whether green claims made in commercial communications comply with the relevant legal standards. The Guideline is expected to be a reference point not only for the Commission's practice, but also more generally for courts and criminal authorities.

Companies should therefore establish clear policies and procedures for the legal review of green claims before they are used in marketing. Because green claims are subject to intense scrutiny, it is important that they are not the sole responsibility of the marketing department, but that the legal department is also involved.