Opinion of the European Economic and Social Committee on advertising for modern, responsible consumption

(own-initiative opinion)

(2022/C 105/02)

Rapporteur: Thierry LIBAERT

Plenary Assembly decision 25.3.2021 Legal basis Rule 32(2) of the Rules of Procedure Own-initiative opinion Section responsible Single Market, Production and Consumption Adopted in section 30.9.2021 Adopted at plenary 20.10.2021 Plenary session No 564 Outcome of vote (for/against/abstentions) 132/0/5

1. Conclusions and recommendations

1.1. The European Economic and Social Committee (EESC) stresses the need for the European Union (EU) to support its advertising industry, which has been hit hard by the COVID-19 crisis. In the face of the digital transition and competition from the Big Four tech companies, advertising is a driver for economic activities and jobs and is more important now than ever before.

1.2. The need for greater respect for consumers and the challenges of the green transition and the fight against climate change call for a broad debate with a view to the advertising industry accommodating in particular the Paris Agreement objectives.

1.3. The EESC calls on the advertising industry to commit to reducing its carbon footprint in order, in line with the EU’s objectives, to achieve carbon neutrality in its activities by 2050, and to reduce greenhouse gas (GHG) emissions by 55 % by 2030 with a view to contributing to the collective achievement of carbon neutrality by 2050.

1.4. The EESC calls on each operator in the advertising industry to commit to reducing their environmental impact in their own business sector. This can be achieved by reducing the energy consumption of digital advertising screens and making them more recyclable, by opting to use paper from sustainably managed forests (PEFC and FSC labels) and inks complying with REACH and GreenGuard standards for paper displays and advertising leaflets, and by reducing the technical, energy and logistical impact of audiovisual productions.

1.5. The EESC recommends that operators in the advertising industry increase their pro bono contribution to support the environmentally responsible initiatives of those who do not have sufficient financial resources (SMEs, start-ups, cooperatives, etc.).

1.6. The EESC calls on operators in the industry to give their members more training in the challenges of the green transition. University courses in communication professions should also include such awareness-raising.

1.7. The EESC recommends that the advertising industry launch a debate about the fantasy created by advertising and related representations. This will help to ensure that, rather than being an obstacle, advertising becomes a real driver for the green transition, enabling products which help to reduce environmental impact to be promoted with factual, accurate information.

1.8. The EESC calls for the continuation of efforts to strengthen EU-wide regulation of advertising to combat greenwashing and misleading environmental claims, with the aim of achieving harmonisation between EU Member States.

1.9. The EESC would like to see special attention paid not just to aspects of the green transition, but also to advertising targeting young people, particularly on social media.

1.10. The EESC considers that there can be no fully responsible advertising if advertising operators in Europe do not take responsibility for disinformation. The European Commission must step up its efforts to fight the monetisation of disinformation ( 1 )

1.11. The EESC calls on the advertising industry to increase its openness to civil society and to create more frequent opportunities for exchanges with its various audiences so that it can develop in line with society’s new expectations.

2. Definitions

2.1. The definition of advertising used here is that of the EU, which described it as ‘the making of a representation in any form in connection with a trade, business, craft or profession in order to promote the supply of goods or services …’. However, this definition does not include advertising for an institutional purpose (improving a company’s reputation) or by public bodies or associations.

2.2. Responsible advertising is advertising that shoulders its share of responsibility for major societal and environmental challenges, including the need to fight climate change.

3. Advertising as a driver of economic activity and employment in Europe

3.1. Advertising is closely linked to growth and jobs. Economic growth is higher when advertising investment is high than when such investment is lower ( 2 ) . In Europe, according to a 2017 study by the World Federation of Advertisers relating to 2016, the EUR 92 billion of advertising expenditure narrowly defined would have generated EUR 643 billion in additional wealth ( 3 )

3.2. According to various studies, an investment of EUR 1 in advertising produces a multiplier and spillover effect of 5-7 in additional growth. Applied to Belgium, the multiplier would be 5 (EUR 2,2 billion of advertising expenditure contributed EUR 13 billion to the Belgian economy) ( 4 )

3.3. Advertising speeds up the spread of new products and services and sometimes innovation, as illustrated perfectly by the lifespan of certain products such as computers and telephones. The faster spread of new products raises questions about the environmental impact of advertising.

3.4. Advertising boosts competition. Without advertising, we would all be using the same bank, which would set its tariffs as it sees fit. Banking services are generally similar from one bank to the next, with the distinction between them also arising from advertising. The same applies to many other sectors of the economy, including energy and commerce.

3.5. Advertising sustains many sectors, most notably the media. In many EU countries, it largely funds print media, radio and television. Moreover, it is as much a resource as a relationship of dependence which is sometimes likely to influence the content of productions and raise questions with regard to editorial independence.

3.6. Advertising has a turnover of EUR 140 billion (2018) in Europe, with 280 000 companies, often small and medium-sized, working partially or wholly for business communication and employing 998 000 people ( 5 )

3.7. Advertising has indirect effects on many related professions, such as audiovisual production, the arts or photography. A Belgian study demonstrated that 87 000 people had jobs that were funded by advertising revenue or were involved in producing advertising through supply chains.

3.8. Moreover, if all business communication spending is included, the considerable sums spent each year in the EU to sponsor entertainment, whether sport or cultural activities, should be added.

4. Impact that goes beyond economic and social aspects

4.1. It is generally accepted that advertising’s effect on the press has been to allow broader access to the media. Without advertising, newspaper prices would rise sharply, and reducing advertising would lead to the demise of many publications.

4.2. It is also thanks to advertising that free printed publications are available to the public, thus allowing several million people to read the news on a daily basis.

4.3. The artistic and creative aspect should be emphasised: a great many film-makers, photographers and designers began their careers in advertising.

4.4. The incorporation of advertising into certain cityscapes has turned them into popular tourist destinations — examples are Times Square in New York and Piccadilly Circus in London. It is the vibrancy of advertising itself that brands a city and makes certain places alluring. This influence of advertising in the public space can of course be very controversial.

4.5. Advertising helps to provide a positive narrative about the world, about happiness, about pleasure or beauty. In the context of ongoing crises, advertising narratives help to spread optimistic and inspiring messages. Advertising has also brought us words of wisdom, such as ‘Don’t imitate, innovate’ (Hugo Boss), ‘Take care of yourself’ (Garnier) and ‘Impossible is nothing’ (Adidas). Thus, advertising generally conveys a positive view of the world. This positive view could prove to be a significant driver for the green transition.

5. The advertising model and its societal and environmental consequences

5.1. Advertising has direct consequences for GHG emissions. It has an impact on the use of paper, as well as on the consumption of various resources (in particular by the new LCD screens) and of energy by the internet or audiovisual media. The impact in terms of GHG emissions or wider environmental impact (e.g. recyclability of the medium) is never in practice used as one of the main criteria when determining the form of an advertising campaign.

5.2. Outdoor advertising also has a specific environmental impact. This can be observed in particular when it comes to illuminated and digital display boards, whose energy consumption and impact in terms of light pollution are not insignificant. Based on a standard 200 kg panel, an estimated 8 tonnes of material are needed to manufacture one digital advertising screen ( 6 )

5.3. By seeking to continually increase the consumption of what it promotes, advertising encourages overconsumption that does not necessarily reflect needs. There are many examples of products and gadgets whose real utility is ultimately limited and sometimes out of proportion to their environmental impact. Some are only used once and then discarded. Advertising models the needs and expectations of individuals according to the interests of distributors, and not necessarily the collective interest.

5.4. With its strong presence in metropolitan areas, advertising can also help homogenise the urban spaces of European cities. Thanks to identical advertising campaigns, urban landscapes are becoming uniform and losing quality. This is due to the fact that a small number of advertisers are responsible for the majority of advertisements.

5.5. The messages it conveys are often far from promoting sharing, solidarity and moderation. Advertising conveys an image of happiness based on acquisition. The advertising fantasy says that everything can be bought. To be happy, we need to possess and consume more. However, public surveys do not show a strong statistical link between consumption and perception of happiness: happiness is determined mainly by belief in certain values and the strength of the family and physical social networks. Advertising can also be a source of constant dissatisfaction for consumers, forcing them to consume ever more, and of frustration for all, particularly the most disadvantaged people, who do not have the means to buy the products and services promoted.

5.6. Unwittingly, European companies spend more than EUR 400 million on disinformation sites ( 7 ) . It is recognised that the major purveyors of disinformation have financial objectives, notably through referencing methods that enable them to obtain large sums of money from online advertising.

5.7. The EESC has noted that more and more advertisements on social media are not presented as advertising, but hidden behind influencers, some better known than others. It has been estimated that more than a quarter (26,6 %) of advertisements on social media do not mention the brand and commercial purpose ( 8 ) . This creates confusion that undermines confidence in brands, which the Digital Services Act can help to combat by requiring the name of the body in whose name the advertisement is disseminated to be communicated ( 9 )

6. Speeding up the evolution of advertising to make its model more compatible with the challenges of the green transition

6.1. While the issue of climate is becoming increasingly urgent, it is difficult to understand why the advertising industry has not formally committed itself to compliance with the Paris Agreement. More recently, the European Parliament (EP) adopted a resolution to achieve a 55 % reduction in GHG emissions by 2030, and on 14 July 2021 the Commission published its package of twelve Fit for 55 measures for achieving this goal. All sectors must contribute to the collective effort and, like the other sectors, the advertising industry has less than 10 years to take this major objective on board.

6.2. Most advertisers have understood the challenges of climate change and the need to listen to society’s high expectations. For several years, they have been working to tackle misleading environmental claims and greenwashing. They now need to step up their efforts.

6.3. This drive is being promoted by the Commission. In 2012, DG JUST set up a working group (Multi-Stakeholder Group on Environmental Claims). Several reports were published, in 2013 and then in 2016. These reports have increased understanding of the issue of misleading environmental claims and had an impact on the implementation of Directive 2005/29/EC of the European Parliament and of the Council ( 10 ) on unfair commercial practices. The Commission is working on updating these guidelines, which are due to be published by the end of 2021. The final text should provide further details on the application of Directive 2005/29/EC with regard to misleading environmental claims. In 2020, national consumer protection authorities carried out a ‘sweep’, coordinated by the Commission, of company websites claiming to sell green products. It was concluded that in 42 % of cases the claims were exaggerated, false or misleading and could potentially qualify as unfair commercial practices under EU rules ( 11 )

6.4. More recently, the new Circular Economy Action Plan published by the Commission on 11 March 2020 includes for the first time a focus on responsible advertising. Section 2.2 states the Commission’s desire to increase consumer protection against greenwashing. Companies will have to substantiate their environmental claims using Product and Organisation Environmental Footprint methods. Section 3.2 conveys the desire to develop incentives to increase vehicle occupancy rates. (This could be done through advertisements showing fewer drivers alone in their cars.)

6.5. Towards a more sustainable single market for business and consumers The EP adopted an own-initiative report entitled ( 12 ) drawn up by its IMCO (Internal Market and Consumer Protection) Committee in November 2020. This text ‘stresses the importance of responsible advertising that respects public standards on the environment and consumer health’.

6.6. Environmental, social and health claims in the single market Towards an EU Strategy on sustainable consumption New Consumer Agenda The EESC has been particularly active, notably in the area of banning misleading environmental claims, for instance with an opinion on ( 13 ) . It has adopted an opinion entitled ( 14 ) , which stressed the importance of providing a better framework for advertising to facilitate more sustainable consumption. More recently, the opinion on a ( 15 ) underlined the need for better consumer information and the need to combat greenwashing.

7. Ensuring European advertising which can help achieve more sustainable and responsible consumption

7.1. The EESC calls for an approach that provides incentives based on advertisers holding themselves accountable. This approach is justified both by the progress made by the sector, in particular in combating misleading environmental claims, and progress in the field of regulation. It is also a response to the need to support a sector that creates growth and jobs, in a particularly difficult period. The EESC believes that any hindrance to European advertising models risks benefiting digital advertising systems, which are mainly owned by the Big Four tech companies, even though they are still significantly outside the scope of European tax systems. This model will itself have to change in the future because of the changes in the rules on cookies. However, the EESC recognises that for certain types of products which have a particular impact, such as fossil fuels, stronger forms of regulation may be envisaged.

7.2. In the context of the current economic crisis, the EESC calls for swift, exceptional financial support to be deployed for the smallest and most fragile players in the advertising sector (SMEs) to enable structures to survive in the current context, in return for structural changes on the points described above.

7.3. Every advertising business in Europe and advertising agencies operating in the European Union should incorporate the objectives of the 2015 Paris Agreement into their GHG emission reduction policy, particularly the objectives recently set by the EU of a 55 % reduction by 2030.

7.4. All economic operators in the advertising industry should recognise the objectives of the green transition and incorporate them into their working methods, providing assessments of their GHG balances, reduction trajectories, and action plans to achieve the objectives. This shift in the role of advertising should take place in a flexible way, in particular to encourage and support medium-sized agencies.

7.5. Operators in the advertising industry must undertake to assess the carbon impact of advertising products in order to develop practices, propose greener production alternatives, and examine the options for reshoring to Europe.

7.6. Operators must increase their pro bono contribution to support the organisations most active in the field of climate transition and social inclusion. More broadly, governance of advertising regulation must be developed in a way that involves civil society more widely, potentially by reinventing forms of governance.

7.7. Operators must organise systematic training on green transition challenges and more responsible advertising practices, with internal courses for their staff while helping to train students in marketing and communication.

7.8. The advertising industry must undertake to continue to strengthen the mechanisms for professional regulation of advertising by extending the supervisory powers of the regulatory bodies in Europe and by involving civil society (environmental NGOs, consumer associations, trade unions, etc.) more effectively in its governance.

Brussels, 20 October 2021. The President of the European Economic and Social Committee Christa SCHWENG

(1) European Commission: Guidance to strengthen the Code of Practice on Disinformation. 26 May 2021. https://ec.europa.eu/commission/presscorner/detail/en/ip_21_2585

(2) Maximilien Nayaradou, L’impact de la régulation de la publicité sur la croissance économique [The impact of regulating advertising on economic growth], summary in Publicité et croissance économique [Advertising and economic growth], Union des annonceurs [French advertisers’ union], 2006. From a thesis defended at Paris Dauphine University in 2004.

(3) World Federation of Advertising. The value of advertising, Deloitte, 2017.

(4) Union belge des annonceurs [Belgian advertisers’ union], L’impact de la publicité sur la croissance économique en Belgique [The impact of advertising on economic growth in Belgium], 3 December 2015.

(5) Source: Eurostat. Advertising and Market Research Statistics.

(6) French Agency for Ecological Transition (ADEME). Modélisation et évaluation environnementale des panneaux publicitaires numériques. [Modelling and environmental assessment of digital advertising panels.] September 2020.

(7) Claudia Cohen, Des marques financent, malgré elles, la désinformation [Brands unwittingly finance disinformation], Le Figaro, 5 August 2021.

(8) Observatoire de l’influence responsable [Responsible Influencing Observatory]. ARPP French professional advertising regulatory authority [ARPP]. 13 September 2021.

(9) OJ C 286, 16.7.2021, p. 70.

(10) Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market and amending Council Directive 84/450/EEC, Directives 97/7/EC, 98/27/EC and 2002/65/EC of the European Parliament and of the Council and Regulation (EC) No 2006/2004 of the European Parliament and of the Council (‘Unfair Commercial Practices Directive’) (OJ L 149, 11.6.2005, p. 22).

(11) Agence Europe, Europe Daily Bulletin No 12646, 24 January 2021.

(12) https://oeil.secure.europarl.europa.eu/oeil/popups/ficheprocedure.do?reference=2020/2021(INI)&l=en

(13) OJ C 383, 17.11.2015, p. 8.

(14) OJ C 429, 11.12.2020, p. 51.

(15) OJ C 286, 16.7.2021, p. 45.