South Korea introduces new financial penalties for greenwashing

SOUTH KOREA – Under a draft law, the South Korean Ministry of Environment plans to introduce a fine of up to three million won (US$2,300) for companies that mislead the public about their environmental impacts.

Under the new law, the ministry needs to follow a complex process to determine the penalty amount. The new regulation is expected to simplify the process and allow the ministry to take a stronger stance on greenwashing.

In response to the new law, environmental organizations such as Solutions for Our Climate (SFOC) say there also needs to be regulation around greenwashing branding companies, which are not advertisements to sell specific products but to promote a company’s general brand image.

“On a similar note, regulators need to closely monitor greenwashing companies’ business plans and be ready to challenge companies even at the planning stage if the plans contradict what the companies are advertising,” said Jihyeon Ha, head of legal operations at SFOC.

“Also, as more companies begin to use offsets to promote their products as ‘green’ or ‘carbon neutral,’ they should be obligated to display disclaimers around the limitations of offsets.

“Lastly, there should be specific guidelines or regulations around the need for companies to disclose specific amounts of emissions to back up any green claims in advertising.”

The ministry of environment will release a set of guidelines against greenwashing later this year.

The move follows a string of warnings issued by the environment ministry to major energy and steel companies in the country, recommending “evidence-based, factual” advertising, according to documents provided by National Assembly member, Sungjoon Jin.

SK Enmove, was an accused company hit with legal action last year by Seoul-based SFOC for using questionable offsets to promote oil products as “carbon neutral.”

The regulator also gave SK Energy, POSCO and GS Caltex administrative guidance for greenwashing advertisements.

“Companies should be on alert. The recent move from the South Korean environment ministry shows that climate litigation plays a key role in strengthening regulation. Three million won may not be a lot, but it’s a step in the right direction,” says Ha.

The fine comes as more countries have begun battling greenwashing. Last August, France announced it would ban fossil fuel advertisements, including fossil gas, later this year.

The EU is also expected to publish an “anti-greenwashing law” that will ban ecological claims unless backed by evidence, says SFOC.

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