In the UK and Ireland, Budweiser makes a ‘100% renewable’ electricity claim. That's because it generates its own renewable energy from wind and solar. It also purchases electricity from regular utility providers, which is offset with purchase power agreements.
Offsets are a common strategy used across manufacturing in the food and beverage industry and beyond. But Budweiser has recently had to clarify its '100% renewable' claim, because advertising watchdogs in the UK and Ireland said this implies that all electricity used comes directly from solar or wind.
How should companies present their sustainability claims to consumers in a way that doesn't fall foul of regulators?
Increased fear of greenwashing
In the UK, the ASA says businesses are increasingly anxious about making claims about sustainability for fear of being labelled as ‘greenwashing’.
What's clear and easy to understand is that companies can't make false claims.
But companies then have to look at their claims and consider if it could potentially mislead consumers. Often, the best way to avoid this is by providing enough information to substantiate claims.
“Some information will be necessary for consumers to understand the basis of the claim, and unqualified claims could mislead if they omit this significant information,” notes the ASA. It has recently published updated guidance on how to approach such claims.
Budweiser’s UK page continues to state that ‘Budweiser is brewed with 100% renewable electricity’: but now adds a clarifying statement via a statement at the bottom of the page linked by an asterisk.
This statement clarifies that ‘The actual electricity used to brew Budweiser is not from 100% renewable sources, but Budweiser ensures that an equivalent amount of energy is generated under green energy agreements to offset the amount of non-renewable energy used from the National Grid to power our brewing processes.’
Budweiser does have renewable electricity coming from an on-site wind turbine directly connected to its brewery in Magor, Wales. It also has a 20 year Virtual Power Purchase Agreement providing for operation of two solar panel farms, located at Grange in Nottinghamshire and South Lowfield in West Yorkshire.
In fact, AB InBev actually produces more renewable energy than it uses at its breweries, a spokesperson from Budweiser Brewing Group UK & Ireland told us.
The ‘100% renewable’ tag was first questioned in Ireland with a complaint submitted by Irish senator Lynn Boylan, with the Advertising Standards Authority ruling that the use of offsets meant that 100% renewable claims were ‘exaggerated’.
The case was then taken up by the ASA in the UK, where the matter was resolved informally.
"This is documented through a European-wide system of REGOs or GoOs ( Renewable Energy Guarantees of Origin) which is a regulated scheme, administered in the UK by Ofgem," they explained.
"The UK&I team have taken this complaint seriously and have worked with the ASA to amend the website to reflect all changes requested.
"And the ASA have said that they believe the changes we have made will resolve the complaint without the need for a formal ruling by the ASA council".
Is offsetting ok?
Offsetting is controversial. While it does allow businesses to account for their carbon footprints and compensate accordingly, critics say it's simply an easy way out and distracts from addressing the larger, structural problems within companies' supply chains and production.
A similar case was seen in a BrewDog Instagram ad in December for its carbon negative beer. The caption stated: “Beer for your Grandchildren. From the World’s First Carbon Negative brewery. Find out how we’re working to ensure we have a planet to enjoy beer on via the link in our bio”.
The ASA banned the ad because it failed to sufficiently outline that part of the claim relied on offsetting.
In the case of Instagram, backing up the claim became even more complicated, because Instagram does not permit links to be included in the caption. Instead, the caption directed consumers to the bio, which then included a link to a web page detailing the basis of the claim (including details of offsetting).
But that wasn't acceptable for the ASA, who highlighted the ad itself did not contain information on the basis of the claim.
"Without that information, consumers would not have sufficient information to understand the basis of the environmental claims in the ad," it said.
The final word? Be upfront about offsetting
The ASA's guidance says that claims that rely on offsetting should be clearly stated as such.
"Marketers should ensure that they include accurate information about whether (and the degree to which) they are actively reducing carbon emissions or are basing claims on offsetting, to ensure that consumers do not wrongly assume that products or their manufacture generate no or few emissions," reads its CAP guidance on the subject.
