German court ruling on ‘Greenwashing’ could challenge steel industry transparency

A recent German court decision against greenwashing could spell trouble for the steel industry, says stainless steel trader Gerber Group.

The German Federal Court of Justice (BGH) recently set a restriction for the use of the “climate neutral” label in product promotion. The term is permittable only if the climate neutrality is clearly explained to the consumer.

The judgement was made in the context of fruit gum and liquorice from a particular brand, which advertised its products as “produced climate-neutrally”. According to the court, the slogan is misleading as the production process of the sweets is by no means free from CO2. The alleged climate-neutrality is actually achieved by offsetting through nature project investment.

When approached by Kallanish, a spokesperson for the court said that steel or its related industries were not under consideration in this context, and that no similar cases are pending for those industries.

However, Gerber finds that this could, and should be happening, and provokingly asks: “Is this the end for green steel intransparency?” In a commentary piece on its website, the group warns that the BGH judgement is likely to seriously shake up the “green steel” concept and pose challenges for many manufacturers.

It attacks steelmakers for constantly coming up with new, colourful labels – blue, green, responsible – “with the sole purpose of creating a lack of transparency regarding CO2 emissions.” It adds: “They try to distract from the fact that there is no real CO2 reduction – at least not in technical terms.”

Gerber predicts that the BGH ruling for the food industry will also be echoed in B2B industries and create better transparency there. It will “make clearer who has taken real measures to reduce CO2 emissions from steel and who is just trying to get away with indulgence payments,” Gerber writes.

Christian Koehl Germany

kallanish.com