31 May 2024 Luca Mariani

The two-year period 2022 - 2023 has spurred the transition of companies in various aspects ranging from energy supply to finance, from communication to identity and socio-cultural profile. The post-pandemic and militaristic world has thown us from the borderless market of the last 30 years into a new economic system full of geostrategic risks 

Disclosure and transparency are principles that apply in companies not only on a financial level, but also in terms of environmental, social and corporate performance - which today is summarised by the acronym ESG (environmental, social and corporate governance). There are ESG rating agencies that measure - mainly through the acquisition and processing of publicly available data - the impact that companies have on the ecosystem, society, local communities and the lives of workers and their families. 

In addition to the ESG index, smart businesses also and above all use the new media narrative (especially that of social networks) to influence the choice of their customers and investors. Companies that demonstrate a commitment to minimising or neutralising their environmental impact are more likely to garner resources and appreciation in the public, particularly among millennials (born between 1981 and 1996) who are oriented towards sustainable alternatives. 

However, in order to make an informed choice at the time of purchase, a certain degree of in-depth knowledge is inevitably required. For example, not everyone is familiar with the meaning of the so-called green claims, which recur more and more frequently in corporate communication. Among the most recurring are the two expressions carbon neutrality and carbon offsetting, which consumers tend to believe are equivalent while they express two different concepts. 

The goal of carbon neutrality is embodied in the company's commitment to equalise the quantities of greenhouse gases emitted with those reabsorbed. The reabsorption of carbon monoxide from the atmosphere - in carbon sequestration slang - is achieved by promoting the development of ecosystems that naturally capture CO2: for example, through economic support for planting or reforestation projects. 

The carbon offsetting initiative, on the other hand, provides that the interested company offsets its CO2 emissions generated in a certain anthropogenic sector with initiatives aimed at reducing air pollution in a different production area. This can be achieved through investment in renewable energy, energy efficiency or other low-carbon technological systems. 

On the other hand, not all market players are that innocent in publicising information about their alleged green footprint: if misused, green claims can unjustifiably advantage some companies to the detriment of others. The risk in such cases is to slip into green washing, i.e. an incorrect form of marketing whereby the message is conveyed that an organisation's products, objectives, and policies are environmentally friendly, when this is not the case. 

More and more often, companies announce that they have undertaken ecological initiatives, accompanied by vague and interpretable claims about how their products or services are sustainable. The risk is that the vagueness of the claims may mislead consumers, convincing them to prefer one item over another because of asserted qualities, which in reality correspond only partially or not at all to the truth. 

In this regard, there is a recent study published by the European Union Intellectual Property Office (EUIPO) saying that the number of applications for registration of trademarks composed of elements referring to the conceptual field of ecology and sustainability has risen considerably in recent years - from around 12,000 in 2018 to over 18,700 in 2021. 

Companies have, therefore, learnt to surf the wave of the climate crisis, pointing their compass at the attractiveness of products and services with a reduced environmental impact. However, some recent trademark decisions have shone a spotlight on the dark side of the environmentalist cause and on the risks that can lure companies into bad waters, with the risk of fishing for failures of a certain media resonance. 

In a recent decision, the Court of Justice of the European Union held that the slogan 'Sustainability through Quality' could not be registered as a European Union trademark in relation to goods in classes 7 (engines), 9 (computer software) and 16 (printed matter and stationery). The rejection was based on the absence of distinctiveness and the requirements for slogans to qualify as real trademarks. 

Slogans are excluded from registration when the public perceives them as banal phrases with a mere advertising purpose. Conversely, they can qualify for protection as trademarks if the average consumer can make a connection between the promotional formula and the entrepreneurial origin of the goods or services in question. Typically, a slogan becomes distinctive when it contains a linguistic play, a double meaning, an enigma, an unexpected element, a formula that induces the reader to make an interpretative effort, or rhetorical figures. 

In the present case, the Court of Justice confirmed that the slogan 'Sustainability through Quality' is a simple message that, without any play on words, advertises the fact that the quality of a certain product also determines its sustainability. A phrase that merely praises and promotes the ecological properties of a product cannot qualify as a trademark. 

Another outstanding case - which, however, settled positively for the fashion house in question - is the class action brought against H&M for its 'Conscious Choice' collection. The plaintiffs claimed that, even though its clothes were made with anti-ecological processes and non-recyclable materials, the fashion house improperly exploited an environmentalist promotional formula. Nevertheless, the District Court of Missouri, before which the case was brought, ruled in favour of H&M, stating that a consumer with normal reasoning would not interpret 'Conscious Choice' as an indication of the environmental sustainability of the relevant products. 

The cited cases provide a lesson to entrepreneurs who are thinking of registering and using a green slogan or trademark: caution is a must when environmental issues are introduced into a company's commercial initiatives, and a preliminary opinion by a specialised IP consultant can be helpful to avoid any post-filing issues.