"Green Marketing": Impact Of The New Art. 3 (1)(x) UCA On Climate-related Advertising

On 1 January 2025, the new Art. 3 para. 1 let. x of the Federal Act on Unfair Competition (UCA, SR 241) came into force with the following wording:

"A person acts unfairly if they make claims about themselves, their goods, works or services relating to the environmental impact that they cause that cannot be substantiated on the basis of objective and verifiable criteria."

This added another letter to the already impressive catalogue of unfair advertising and sales practices. Article 3 para. 1 UCA now lists no fewer than 23 specific examples of unfair practices.

Emergence of the new "green marketing" regulation

Before the new "green marketing" provision in Art. 3 para. 1 let. x was incorporated into the UCA, pertinent ideas had already been discussed several times at federal level:

• 2021: In June the parliamentary initiative 21.457 "Stop the Greenwashing" called for a tightening of Art. 3 para. 1 let. i UCA. The provision was to be amended to (also) include as unfair any act that "misleads about the carbon footprint or carbon neutrality of the product [...] or its impact on the climate." The Legal Affairs Committee rejected this tightening on 2 February 2022 (see committee report).
• 2022: The Interpellation 22.4162 "Taking action against misleading environmental claims" of 29 September 2022 asked the Federal Council how it intended to amend the UCA in light of the greenwashing issue. On 16 November 2022, the Federal Council announced that the UCA already prohibited inaccurate or misleading information in general terms. The interpellation was closed on 27 September 2024.
• 2024: The Motion 24.3198 "Preventing misleading advertising with environmental references through uniform standard" of 14 March 2024 sought to ensure that environmental advertising claims ("sustainable"", "environmentally friendly", "climate-friendly", "ecological", etc.) could only be used in future in accordance with state-approved standards. In its statement of 22 May 2024, the Federal Council pointed out that false or misleading claims are already covered under the current UCA and furthermore that Art. 3 para. 1 let. x UCA will be created in the revision of the CO₂ Act.
• 2024: The Interpellation 24.3315 "What is the federal government doing about unfair advertising and greenwashing in the context of sales promotion?" dated 15 March 2024 called on the Federal Council to explain what measures it had taken against greenwashing or when it intended to take such measures. In its response of 8 May 2024, the Federal Council referred to the newly adopted Art. 3 para. 1 let. x UCA and did not mention any further measures it intended to take. Further discussion of the matter was postponed.

The "Green Marketing" regulation in Art. 3 Abs. 1 let. x UCA was ultimately introduced as part of the revision of the CO₂ Act (Federal Act on the Reduction of CO₂ Emissions, SR 641.71) with effect from 1 January 2025. However, on 16 September 2022 when the Federal Council presented its Dispatch on the revision of the CO₂ Act for the period after 2024, the draft law did not yet contain any reference to an amendment to the UCA or any proposal to supplement Art. 3 para. 1 UCA with a new subsection (x). It was only during the parliamentary debate on the CO₂ Act (22.061) that the Council of States committee proposed an additional amendment to the UCA on 28 September 2023 and requested that Art. 3 para. 1 UCA be supplemented with a new letter x (AB 2023 p. 1010 f.). The wording proposed by the committee already corresponded to the eventual text of the final vote from 15 March 2024.

Existing mechanisms for regulating "Green Marketing"

The new Art. 3 para. 1 let. x UCA classifies unsubstantiated or unsubstantiable statements regarding climate impacts as unfair. Misleading or deceptive marketing practices have always been prohibited by the UCA. This is already evident from the general clause and is specified in various other provisions of the UCA.

For example, the following actions are considered unfair:

• provide incorrect or misleading information about themselves, their business, their business name, their goods, works or services, their prices, their volume in stock, the nature of the sales transaction or about their business relationships or benefit third parties in competition through such conduct (Art. 3 para. 1 let. b UCA);
• conceal the condition, quantity, purpose, use or dangerousness of goods, works or services and thereby deceive the customer (Art. 3 para. 1 let. iUCA).
• Any conduct or business practice that is misleading or which otherwise violates the principle of good faith such that it influences the relationship between competitors or between suppliers and customers is unfair and unlawful (Art. 2 UCA).

The UCA thus provided and still does provide, independently of let. x, various instruments for taking action against false or misleading (climate-related) statements, provided that these are at least objectively capable of affecting competition (see Art. 1 UCA, as otherwise the UCA would not be applicable at all).

The Swiss Fair Trading Commission (SFTC) as the self-regulatory body for the advertising industry, has already dealt with climate-related advertising on several occasions. The SFTC bases its decisions on the "Principles of Fairness in Commercial Communication" issued by the SFTC. In 2023, the SFTC published Guidelines on Advertising related to the Environment or Climate. These guidelines codify the SFTC's previous "case law"; the SFTC states that environmental claims must be substantiated "by means of plausible, comprehensible and generally accepted and recognised methods".

The SFTC refrained from adapting the principles following the introduction of Art. 3 para. 1 let. x UCA on the grounds that "the existing legal basis is sufficient to assess the fairness of commercial communications relating to the environment."

Although the SFTC's decisions are not legally binding, they are respected in the advertising and communications industry and are often taken into account by the courts. While Swiss courts have not yet dealt with issues of unfair competition law relating to "green marketing" and greenwashing (although the UCA has always provided a basis for such lawsuits, see above), the SFTC has already issued several decisions on this topic. It can be assumed that these decisions by the SFTC will also be taken into account in the interpretation of the new Art. 3 para. 1 let. x UCA, which is why they will be briefly discussed here:

"FIFA-Decision" (SLK 188/22 of 10.05.2023)

• FIFA described the World Cup in Quatar as "carbon neutral" and went on to write: "The xxxxxxxx and xxxxxxxx will fully offset the emissions associated with the xxxxxxxx World Cup. This offset also includes emissions from ticket holders travel, accommodation, food and drink. This will therefore be the first carbon-neutral xxxxxxxx World Cup."
• Various parties from several countries lodged complaints against this, arguing, among other things, that the statements were false or misleading, not least because it is difficult, if not impossible, to reliably determine the impact of a World Cup on the environment, especially in advance. FIFA countered this by stating that the text reflected the actual efforts made and that an ex-post evaluation would verify their statements.
• The SFTC did not accept this and stated that environmental claims must be up to date. Furthermore, unclear statements must be valid for all possible interpretations; alternatively, such statements should be omitted or made sufficiently specific to prevent any misunderstandings. FIFA's core statement that the World Cup was CO₂-neutral could only be upheld if it could be substantiated using recognised measurement methods, which was not the case here. Even an "ex-ante assessment" with estimates of CO₂ consumption and FIFA's assurance that it would also compensate for any higher consumption determined retrospectively did not change this assessment, and the SFTC upheld the complaints.

Green Marketing – Claim: "xxxxxxxx Heating oil is climate neutral" (SLK 168/23 of 6.9.2023)

• The company concerned justified its claim by stating that it more than offset its CO₂ emissions through its own and external environmental protection projects, but did not provide any specific details on this.
• The company further stated that the claim was correct with regard to the company, as it had been awarded the "Certified CO₂-neutral by Swiss Climate" label. Every year, data on the carbon footprint were collected and then vrified by an external auditor.
• In the opinion of the SFTC, it was not clear to the average consumer in this case whether the advertising statement "xxxxxxxx heating oil is climate neutral" referred to the product ("heating oil") or the company ("xxxxxxxx Heizöl AG"), whereby climate neutrality in relation to the product did not correspond to the facts.
• The SFTC held that "vague or unspecific statements about being beneficial to the environment that could have different meanings for consumers may only be made if they apply without restriction to every reasonably foreseeable situation". When referring to "climate neutral", this encompasses "the neutrality of all influences of a product or a company on climate change, as understood by the average consumer"; mere CO₂ neutrality, as claimed by the company, is not sufficient for this purpose. The SFTC upheld the complaint, explicitly stating that this would apply even if the average addressee were to understand the statement as referring to the company.

Green Marketing – Claim: "Our Jars are Climate Positive" (SLK 169/23 of 6.9.2024)

• The company concerned justified its advertising claim by stating that CO₂ emissions were overcompensated for by its own and external environmental protection projects (without providing any specific details).
• The SFTC pointed out that (climate-related) statements such as "environmentally friendly" or "ecologically safe", "green", "sustainable", "CO₂ friendly", etc. are subject to exacting standards of proof. As long as there were no definitive, generally accepted methods for measuring sustainability, it should not be claimed. In the present case, the company concerned had not provided any evidence to support its claim.
• Furthermore, the SFTC reiterated that a distinction must be made between "CO₂ neutral", "greenhouse gas neutral", "climate neutral" and even "climate positive". When referring to "climate neutral" or even "climate positive", this encompasses "the neutrality of all influences of a product or company on climate change in the understanding of the average addressee, or, in the case of "climate positive", a surplus of measures that help to slow down climate change". Mere compensation was not sufficient.

Green Marketing – Claim: Climate neutral helicopter flights "With us, you fly 100% climate neutral" (SLK 170/23 of 22.11.2023)

• Once again, the SFTC addressed the distinction between "CO₂ neutrality"" and "climate neutrality". The explanations of the label on the website of the company concerned and the evidence submitted (fuel consumption bills) only showed that CO₂ emissions were taken into account, but no other greenhouse gases.
• The SFTC therefore considered the advertising claim to be misleading and incorrect as it was not fully proven.

Green Marketing – Claim "Climate Positive" (SLK 108/24 of 30.04.2024):

• On the one hand, the expression "climate positive" had to be assessed, and on the other hand, the slogan "Whether you buy organic carrots from your local shop or fly business class to Thailand, your CO₂ emission is constantly increasing".
• The SFTC explained that "climate positive" means that the specific product has no negative – but rather positive – effects on the climate. By claiming that by planting trees it offsets 300 kg of CO₂ per tree, the advertising company did not provide "plausible and comprehensible calculations of all climate-damaging effects and their compensation measures, carried out using generally accepted and recognised methods". With regard to the term "climate positive", the SFTC therefore deemed the advertising statement to be problematic.
• However, the SFTC did not find the statement about "organic carrots" to be problematic. It was of the opinion that this statement clearly expresses that every product and every consumption behaviour generates CO₂ emissions. According to the understanding of the average addressee, this was neither a comparison nor an equivalence of the products mentioned.

What's new? Critical assessment of Article 3 para. 1 let. x UCA

While green marketing regulations could previously only (but still) be derived from the general provisions of the UCA, Art. 3 para. 1 let. x UCA deliberately created a climate-related provision. Accordingly, anyone who does the following is acting unfairly:

• Providing information about themselves, their goods, works, or services that
• have a connection to the climate impact caused, without being able to prove this information by means of
• objective and verifiable evidence.

While the explicit reference to climate represents a thematic innovation, it is particularly striking that letter x deviates conceptually from the other provisions of Art. 3 para. 1 UCA with regard to conduct that is classified as unfair:

Application and purpose of the UCA

The UCA generally applies to all competitive actions. Competitive actions are actions that are objectively capable of influencing competition. From the perspective of the UCA, statements that do not (or cannot) influence the market are therefore irrelevant, such as purely ideological statements (political advertising) or statements that are completely irrelevant to the market, for example because they were only made in a private context. However, there is no requirement for an intention to engage in economic activity or even an intention to influence competition. This means that also third parties who are not directly involved in the market, such as journalists, can violate the UCA.

Art. 3 para. 1 let. x UCA is somewhat at odds with this. In general, the UCA declares "incorrect or misleading" information to be unfair if, given the market context, it can generally be considered objectively capable of influencing competition, for example by falsely directing demand. In contrast, the new letter x focuses on the "objective and verifiable" provability of the information when assessing the fairness. This new letter rather suggests that climate-related statements would be considered unfair per se, as long as their accuracy is not proven. However, the mere absence of evidence is generally not sufficient to infer an objective capability to influence competition. This observation raises the question of the compatibility of this new letter with the purpose of the UCA, which is to ensure fair and undistorted competition (Art. 1 UCA). What exactly this means has not yet been conclusively clarified. While some legal opinions focus (at least in part) on business ethics (and, to put it simply, on whether a behaviour is "decent"), others see the purpose of the UCA (exclusively) in protecting the functioning of competition. True and unambiguous statements are generally neither questionable in terms of business ethics nor do they serve to impair the functioning of competition. On the contrary, such statements are considered to contribute to market transparency, which is fundamentally desirable from a macroeconomic perspective. However, the new letter x now classifies statements as unfair if they cannot be substantiated to the required extent, thereby also qualifying statements that are fundamentally correct (but cannot be sufficiently substantiated) as unfair.

Reversal of the burden of proof?

Letter x requires that climate-related statements can be substantiated on a 'basis of objective and verifiable criteria", thereby effectively reversing the burden of proof for environmental claims. According to the wording of letter x, it is not even necessary to demonstrate that a statement is misleading or deceptive in order to require proof of its accuracy. Prior to the latest revision, the UCA only provided for the possibility of reversing the burden of proof in individual cases and "requiring the advertiser to prove the accuracy of factual claims contained in the advertisement" if a weighing of interests indicated that such a reversal of the burden of proof was appropriate (Art. 13a UCA). However, this possibility previously only existed in civil proceedings; for letter x, however, a reversal of the burden of proof now appears to apply even in criminal proceedings. According to Art. 23 para. 1 UCA, anyone can now be punished with imprisonment or a fine who intentionally makes claims about regarding the climate impact caused and cannot substantiate these with objective and verifiable evidence.

The required standard of proof, in turn, is not specified in the wording of the law itself as it does not specify what evidence is sufficient to establish a 'basis of objective and verifiable criteria. Nor can any useful information be gleaned from the materials, as letter x was added without any significant discussion during the parliamentary debate. It is therefore questionable, for example, which scientific opinions and assessments can and should be granted the required objectivity and verifiability (and which should not). This question will become particularly relevant when different doctrines or calculation models are encountered in science. In practice, the conditions under which climate labels can meet the required standard of proof will probably be of particular relevance. At this point in time, the following can be said: It is essential that the label's qualification criteria are based on objectifiable scientific principles and that these principles and compliance with them can be proven by the company concerned. Furthermore, the label (including in its specific use by the company) must not be misleading or ambiguous for the average consumer.

Conflict with reporting obligations?

As part of the counterproposal to the Responsible Business Initiative, large listed companies under Swiss law have been required to provide information on non-financial matters in their reporting since the 2023 financial year (see Art. 964a et seqq. Swiss Code of Obligations, CO). The reporting also includes information on certain environmentally relevant topics, in particular climate issues. Reporting on climate issues is specified in the Ordinance on Reporting on Climate Issues (KlimaVo, SR. 221.434) and requires the companies concerned to disclose various climate-related key figures (i.e. quantitative CO₂ targets, disclosure of all greenhouse gas emissions, disclosure of the company's own climate strategy, risk management and climate governance). If Swiss companies operate in the European area, similar reporting obligations may apply based on the European Corporate Sustainability Reporting Directive (CSRD). This obligation to report on climate-related issues is therefore in obvious tension with the requirements and, in particular, the high standard of proof required by Art. 3 para. 1 let. x UCA. For example, how can a company's own climate strategy be proven to be "objective and verifiable"? When is risk management considered to be proven? Which scientific method for measuring greenhouse gas emissions meets the legal requirements of the UCA (and which does not)? The application of Section 3 para. 1 let. x UCA to all aspects of reporting requirements on non-financial climate issues must therefore be viewed critically.

Consequences of a violation of Art. 3 para. 1 let. x UCA

The UCA provides several civil law measures. At the same time, it creates the legal basis for administrative and criminal sanctions. The inclusion of letter x in the list of offenses in Art. 3 UCA has – at least potentially – significant consequences for companies, as violations can be prosecuted both under civil law (Art. 9 ff. UCA) and criminal law (23 para. 1 UCA).

• Under civil law, legal action may be taken in particular to seek an injunction, removal or declaration of the unlawfulness of unfair conduct (Art. 9 para. 1 UCA). In addition, compensation, reparation or forfeiture of profits may also be claimed in accordance with the Swiss Code of Obligations (Art. 9 para. 3 UCA). Civil law claims are available in particular to competitors (Art. 9 UCA) and customers, as well as to professional and trade associations where applicable (Art. 10 UCA).
• Under criminal law, unfair conduct is punishable under Art. 23 UCA by imprisonment for up to three years or a fine (under Art. 34 SCC up to a maximum of CHF 540,000). An additional fine of up to CHF 10,000 may also be imposed (Art. 42 para. 4 in conjunction with Art. 106 SCC). The prerequisite is fundamentally unfair competitive behaviour; negligence is not punishable. Prosecution is not initiated ex officio, but only upon the filing of a corresponding criminal complaint. All persons (i.e. competitors and customers, and possibly also the federal government) who are also entitled to bring civil actions under Art. 9 UCA are eligible to file a complaint.

Conclusion

The introduction of Art. 3 para. 1 let. x UCA currently leaves many questions unanswered, which ultimately must be clarified by court practice. The decisions of the SFTC will continue to be an important aid to interpretation and clarification. In addition, the Federal Office for the Environment (FOEN) is preparing an implementation guide (expected in summer 2025, but not yet published), which is also intended to provide guidance.

Against this background and in view of the potentially significant consequences, it is advisable to raise awareness of the "green marketing" regulations and to take appropriate measures to prevent violations.

If a company wants (or needs) to make environmental claims about itself or its products, it should ask itself the following questions in particular:

1. Are a company's communication activities affected ('information about themselves, their goods, works or services ")?

• Advertising and marketing information
• (Factual) product descriptions, including the use of (climate) labels
• Information about the company itself (website, corporate communications)
• Annual reports, in particular sustainability reporting (Art. 964a CO, CSRD, etc.)

2. Does it contain environmental information? ("relating to the environmental impact that they cause")? If yes, is it clear to the average addressee what a statement (including climate label) specifically refers to, i.e. which product, which part of the company, etc.)? With regard to the SFTC's decisions, the following formulations are critical, for example:

• Sustainable
• CO₂ neutral, free, reduced
• Climate neutral/climate positive
• Green

3. What evidence is there to support the claim ("that cannot be substantiated on the basis of objective and verifiable criteria ")?

• Is the information based on (scientific) evidence?
• Is the evidence based on reliable facts?
• Are the sources reliable and the results reproducible?
• Are there any principles or sources that contradict the information provided by the company?

Special case of climate labels: A climate label is not sufficient evidence in itself. Rather, it is important to check before using (and displaying) it

• what it refers to;
• whether the average addressee understands the label correctly;
• whether the label criteria have been created and tested on a verifiable (scientific) basis and whether proof of compliance can be provided

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.