It’s April, which means it’s time for Earth Day. But for so many consumers, sustainability is top of mind all year. Consumers are constantly seeking out products and services that they can feel good about using and purchasing. And marketers want to tout what their company is doing to be good to the environment. As a result, the marketplace is flooded with claims that our household cleaners are “non-toxic” and our packaging is “recyclable” along with many other environmental benefit statements for products and services.
To avoid what’s commonly known as “greenwashing,” marketers need to ensure that statements made about the environmental benefit of their products or services are clear, truthful, and evidence-based. A top resource in this area is the Federal Trade Commission’s “Green Guides,” which can help companies avoid making environmental benefit claims that can attract regulators and mislead consumers. While the Green Guides are not FTC regulations, they provide detailed guidance on the types of claims that the FTC considers deceptive under Section 5 of the FTC Act, which broadly prohibits “unfair or deceptive acts or practices in or affecting commerce.” (15 U.S.C. § 45(a)(1).) Although these Guides have not been updated in almost 10 years, they remain instructive when it comes to a review of environmental benefit claims.
One of the most critical lessons in this area is that marketers should avoid making broad unqualified environmental benefit claims – such as “green” or “environmentally friendly” – because these claims are confusing to the consumer and difficult to substantiate. What does it really mean when a product is environmentally friendly? Consumer perception data collected by the FTC showed that claims of this nature are likely to suggest that the particular product has far-reaching, specific environmental benefits. Very few products would be able to live up to the attributes that consumers understand from these claims, and so broad unqualified claims should be avoided.
Instead, marketers should qualify general claims with the specific environmental benefits and attributes that are relevant, and those qualifications should be clear, prominent, and specific. For example, marketers regularly state that their product packaging is “recyclable.” However, if recycling facilities for that product packaging are not readily available in a certain area, the marketer must provide the consumer with that context. As such, the advertisement or packaging could state “This product may not be recyclable in your area” or if the facilities are more limited, then something stronger may be needed, such as “This product is recyclable only in the few communities that have appropriate recycling programs.”
Environmental benefit claims can take many other forms, such as the use of certifications and seals. Those seals and certifications are considered endorsements by the FTC, and therefore trigger additional requirements. A marketer must ensure that the seal or certification shown actually conveys the basis for the endorsement, and must also disclose any material connections that may impact the consumer’s purchasing decision.
Moreover, the Green Guides contain guidance on the use of many common environmental benefit terms like “biodegradable” and “renewable” as well as comments on carbon offset programs. Notably, the Green Guides do not address use of claims of products that are “sustainable,” “natural,” and “organic” because other agencies outside the FTC have guidance on these terms. If the FTC does eventually update the Green Guides, there may be additional clarity on these terms and others that have become more commonly used since the Guides were last updated.
We’ve seen an increase in regulatory scrutiny and class action filings in this area over the past few years, as environmental benefit claims have increased in emphasis and prominence. This April, in honor of Earth Day, consider a review of your advertising claims to ensure that any claims of environmental benefit are legally compliant. It’s important to examine both the express claims (actually stated) and implied claims (reasonably interpreted from what is present or omitted) that are contained in an advertisement when conducting this review. The claim itself will dictate what level of substantiation is needed, and you must have sufficient evidence to support the reasonable takeaways from any claims in an ad.