1. Background

Despite the increasingly critical global debate surrounding ESG, sustainability remains an important expectation for many consumers. Studies continue to show that consumers are willing to pay a premium for sustainable goods and services, particularly with respect to their climate footprint (the «sustainability premium»). Many companies therefore remain keen to highlight climate-related information in their product advertising and corporate communications.

As of January 1, 2025, the Swiss parliament tightened unfair competition law to combat greenwashing in the area of climate-related claims (e.g., «climate-friendly» or «carbon neutral»). Pursuant to article 3(1)(x) of the Swiss Unfair Competition Act (UCA), any person acts unfairly if they make «claims about themselves, their goods, works or services relating to the climate impact that they cause that cannot be substantiated on the basis of objective and verifiable criteria». Switzerland is thus aligning itself with international developments, particularly in the European Union, aimed at stricter regulation of sustainability information at the point of sale.

In practice, the new provision leaves several key issues unresolved. Most notably, it is unclear whether and, to what extent, claims about the climate footprint of products and companies may be based on so-called carbon offsetting measures outside the product life cycle or the company’s value chain – especially through the purchase of carbon credits.

To address these uncertainties and promote consistent application by courts and authorities, the Federal Office for the Environment (BAFU) published a guidance/enforcement aid on March 2, 2026, on the assessment of climate-related claims within the meaning of article 3(1)(x) UCA (the BAFU Guidance). The BAFU Guidance further specifies the statutory requirements for such claims, including in light of the general prohibition of false or misleading statements under article 3(1)(b) UCA.

2. General Requirements for Climate-Related Claims

A climate-related claim within the meaning of article 3(1)(x) UCA encompasses any statement – regardless of its form – that conveys objectively verifiable facts about the climate impact of a company or a product (including services). Such claims may be quantitative (e.g., «carbon neutral» or «net zero») or qualitative (e.g., «climate-friendly» or «reduced carbon footprint»). The provision also applies to disclosures made pursuant to legal requirements, including sustainability reporting under articles 964a et seqq. of the Swiss Code of Obligations.

Climate-related claims must comply with certain general principles, in particular the following:

• Clarity: The BAFU Guidance requires that climate-related claims be presented in a manner that is clear, specific and tailored to the target audience so that they are readily understandable. For example, claims must make transparent their scope – i.e., whether they apply to an entire product or company or only to discrete elements – and their temporal dimension, namely whether they describe a current condition or a future objective. Where relevant, the underlying reference periods must also be specified (e.g., «50% reduction by 2030 compared to 2020»). In addition, all information necessary to properly interpret the claim must be disclosed at the same time and in close proximity to it. Such information must be easily accessible, for example via a web link or QR code.
• Accuracy, burden of proof and evidentiary standards: Climate-related claims must be substantively accurate. The BAFU Guidance requires that such claims be based on current data and sound scientific evidence, and that they be updated within a reasonable period if the underlying basis changes. Although advertisers are not required to obtain independent third-party verification in advance, they bear the risk that, absent supporting evidence, a claim will be deemed unfair in the event of a dispute. This risk is heightened by the fact that article 3(1)(x) UCA effectively shifts the burden of proof to advertisers (see Section 5 below).

3. Treatment of Carbon Offsetting in Climate-Related Claims

A central issue following the enactment of article 3(1)(x) UCA is whether, and to what extent, climate-related claims may take into account carbon offsetting measures – i.e., emissions reductions or removals occurring outside a product’s life cycle or a company’s value chain, including through the acquisition of carbon credits.

The BAFU Guidance draws a clear and consequential distinction between product-level and company-level claims:

• Product-level claims may not be based on offsetting measures outside the product life cycle. The BAFU Guidance takes the view that claims such as «carbon neutral» create the impression that emissions associated with the product have been directly reduced. Reliance on external offsetting measures would therefore be misleading from a consumer perspective and is not permissible.
• Company-level claims, by contrast, may, in principle, incorporate offsetting measures outside the value chain – but only subject to stringent conditions. In particular, the BAFU Guidance requires adherence to the mitigation hierarchy, meaning that emissions must first be reduced within the company’s own operations and value chain to the greatest extent feasible. In addition, any offsetting must meet high standards of environmental integrity and quality and must exclude double counting. Where offsetting is undertaken to satisfy a legal obligation, this must be clearly disclosed as such.

4. Specific Requirements for Common Climate-Related Claims

The BAFU Guidance provides more granular direction on the use of climate-related terminology commonly employed in practice:

• For company-level claims, the terms «carbon neutral» or «GHG neutral» are permissible only where there is no net increase in greenhouse gas emissions across the entire value chain. This presupposes that emissions have been reduced to the maximum extent technically feasible and economically reasonable and that any residual, hard-to-abate emissions are fully offset through credible negative emissions. In practice, the use of these terms at the product level is effectively excluded, as such claims cannot rely on offsetting measures outside the product life cycle.
• The BAFU Guidance treats the terms «climate neutral» or «climate positive» as inherently problematic. Given current scientific limitations, comprehensive neutrality with respect to all climate-relevant effects (beyond greenhouse gas emissions) cannot be reliably demonstrated. Their use is therefore strongly discouraged.
• At the company level, the terms «CO₂ compensated» or «with carbon offset» are permissible only if the scope and quality of the offsetting measures are transparently disclosed. Absent quantitative clarification (e.g., «50% offset»), these statements risk implying full compensation. At the product level, their use is not permitted, as external offsetting cannot substantiate product-specific claims.

Qualitative claims, given their inherently broad and potentially ambiguous nature, are subject to heightened substantiation and disclosure requirements:

• Claims like «climate friendly» or «climate-conscious» require that the relevant activities are designed to minimize adverse impacts on the climate system. They may not be based on offsetting measures outside the value chain or product life cycle.
• «CO₂-reduced» or «reduced carbon footprint»: Such claims must be anchored in a clear and meaningful benchmark (e.g., a prior product version, an industry standard or a defined base year). The asserted reduction must be quantitatively substantiated and may not be achieved through external offsetting.
• «Environmentally friendly», «green» or «sustainable»: These broad claims generally require a demonstrable and material reduction in climate impact and must be carefully substantiated in light of their wide interpretive scope.

5. Implications for Companies and Advertisers

The BAFU Guidance provides helpful clarification of the requirements applicable to climate-related claims but does not fully resolve the legal uncertainty introduced by article 3(1)(x) UCA. While it offers a structured framework for commonly used green claims, it also sets a high bar for their use – one that, in certain cases, approaches a de facto prohibition.

The practical impact on corporate communications is significant. Companies should therefore reassess their use of climate-related claims and ensure that such statements are grounded in recognized methodologies and robust underlying data. Particular caution is warranted for claims relating to «carbon neutrality» or similar concepts, which carry an elevated risk of being considered misleading.

Article 3(1)(x) UCA requires that climate-related claims be supported by «objective and verifiable criteria». In effect, this places the burden on the advertiser to substantiate the claim, which is also the position taken in the BAFU Guidance.

As a result, companies face an increased risk of civil claims by private parties or consumer organizations, as well as complaints before the Swiss Fairness Commission. Depending on the circumstances, criminal or administrative liability may also arise.

Although the BAFU Guidance constitutes an administrative ordinance and is not formally binding on courts, it is likely to carry considerable weight in practice. Courts typically follow such guidance where it reflects a reasonable interpretation of statutory requirements. Companies are therefore well advised to review their sustainability communications proactively and ensure that climate-related claims align with the standards set out in the BAFU Guidance.