Commentary: PRISM+ ad saga signals greater greenwashing ...

SINGAPORE: As the COP28 climate conference wrapped up in Dubai earlier this month, an interesting development on the sustainability front was unravelling back in Singapore.

For the first time, Singapore’s advertising standards watchdog spoke out against an advertisement for making misleading environmental claims about a product.

The ad in question was made by electronics retailer PRISM+ and featured social media influencer Xiaxue. It claimed that using PRISM+’s air-conditioner was the "best tip" to "save Earth", and showed Xiaxue setting it to 23 degrees Celsius to help "save Earth”.

The self-regulatory Advertising Standards Authority of Singapore (ASAS) opined that the ad was “not acceptable” under the legally non-binding Singapore Code of Advertising Practice, which states that advertisements should not mislead through inaccuracy, exaggeration or other means.

PRISM+ maintained that the ad did not misrepresent the air-con’s energy-saving features, but took the video down from its Instagram account owing to its “healthy relationship with ASAS”.

I believe this ruling is a significant marker in the broader movement against greenwashing for its varying implications.

First, we have not seen a precedent ruling of this kind in Singapore, and perhaps Asia. This stems from the fact that there are hitherto very few complaints to the advertising watchdogs on greenwashing-related content, and Asian consumers may still be lacking adequate sustainability awareness.

According to ASAS, there had only been one greenwashing-related complaint besides the PRISM+ video, and that was found not to breach its guiding principles.

In other jurisdictions such as the UK, there are similar non-governmental self-regulators in the advertising industry, such as its Advertising Standards Authority (ASA). Unlike its Singapore counterpart, ASA has issued many rulings against advertisements that carried misleading or unsubstantiated environmental claims.

Parties found to have violated ASA advertising standards include financial institutions like HSBC, which ran an ad touting its environmentally beneficial work while omitting its fossil fuel financing involvement; airlines like Air France for making claims on travelling “better and sustainably”; as well as consumer brands like Oatly over the impact of its alternative dairy product.

ASA is also notably proactive in picking up such claims, often utilising artificial intelligence on the web to identify such marketing, while ASAS retroactively responds to feedback or reports to investigate potential breaches. The time may be ripe for Asian regulators and watchdogs to step up efforts in monitoring and flagging potential misstatements.

Second, ASAS’ ruling serves as a clear signal for Singapore brands to exercise caution over their marketing campaigns or ads pertaining to sustainability claims.

In an age where sustainability has gained more attention, companies will have to be more responsible and mindful of what they put out on media channels. There is a real chance their message - no matter how well-intentioned or tongue-in-cheek - may be misconstrued by the person on the street.

In a recently released study by the Competition and Consumer Commission of Singapore and NUS Business School, 51 per cent of environmental product claims surveyed were unsubstantiated. They did not provide elaboration or evidence on why the product was natural, sustainable or eco-friendly.

To the less environmentally savvy or conscious, such claims could create uncertainty. A WWF-Accenture survey published in 2021 revealed that 30 per cent of Singapore consumers surveyed found sustainability claims confusing, and 26 per cent wished to verify such claims easily.

Misleading campaigns or products also hurt public confidence in players genuinely advocating for sustainable alternatives. In the same WWF survey, almost one in four respondents said they did not trust businesses’ claims on sustainability.

This shows work is needed to improve companies’ transparency in communicating their sustainability efforts to consumers, and in equipping them to do so.

It is vital, however, that companies do not give up on becoming more sustainable. The last we hope to see would be a swing towards “greenhushing”, where companies stay silent about their sustainability efforts or progress, for fear of generating opprobrium for greenwashing.

Consumers must also be realistic and cognisant of the fact that companies and brands do not simply become sustainable overnight. Sustainability is a journey, not a binary. Calling out brands which are attempting to achieve greater sustainability - while not being perfect yet - may instead discourage them and create a chilling effect.

Finally, ASAS’ ruling strengthens the momentum for greater sustainability accountability for companies, and portends further regulatory oversight on greenwashing in the years ahead.

Other jurisdictions have seen a recent push for firmer and clearer legislation against greenwashing practices. Earlier in 2023, South Korea drafted a law that will enact a 3 million won (US$2,300) fine on companies for false or exaggerated environmental claims.

Separately, the European Union proposed requirements for companies to assess, substantiate and communicate environmental claims.

Singapore does not have a specific greenwashing legislation, but the government has elucidated that the Consumer Protection (Fair Trading) Act can protect consumers against greenwashing claims.

Under the Act, consumers can seek damages from a supplier if false claims were made in a transaction, or if the supplier’s actions or omissions may have reasonably deceived or misled them. CCCS also recently stated that it is developing guidelines for greater clarity to suppliers pertaining to environmental claims.

Guidelines, however, do not carry the full force of law. The Singapore government clearly prefers a light-touch regulatory position at the moment while adopting a wait-and-see approach towards developments elsewhere.

Nonetheless, as regulators worldwide strengthen environmental, social and governance standards, there will be growing impetus for the government to articulate its stance against greenwashing more firmly. It will have to carefully balance business certainty and competitiveness with Singapore’s reputation to be a leader in sustainability solutions.

Preston Wong is Adjunct Faculty for Sustainability Law at SMU Yong Pung How School of Law and Lecturer for Sustainability Law and Policy at Yale-NUS College.

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