Tips for Navigating the "Greenwashing" Landscape

“Greenwashing”—a word play on “whitewashing”—occurs when a company “spends more time and money claiming to be ‘green’ through advertising and marketing than actually implementing business practices that minimize environmental impact.” What Is Greenwashing?, Greenwashing Index. Society is certainly concerned with caring for the environment and rewarding companies that produce environmentally favorable products, but society and the government are also concerned with holding corporations accountable for “green” claims made in marketing appeals. With accountability in mind, on October 1, 2012, the Federal Trade Commission (FTC) revised the “Green Guides” (more formally known as Guides for the Use of Environmental Marketing Claims)—a set of parameters “designed to help marketers ensure that the claims they make about environmental attributes of their products are truthful and non-deceptive.” Press Release, Fed. Trade Comm’n, FTC Issues Revised “Green Guides” (Oct. 1, 2012). Since then, the commission has brought enforcement actions against numerous companies whose claims of “greenness” are misleading. This article surveys the 2012 revisions and recent FTC enforcement actions, state regulation and enforcement, and the public’s efforts to hold corporations accountable through discourse and private actions.

Federal Regulation—The “Green Guides”
Section 5 of the Federal Trade Commission Act, 15 U.S.C. § 45(a)(1), addresses unfair and deceptive competition methods, and the Green Guides are the FTC’s administrative interpretation of section 5 in an environmental context. Although the Green Guides are not binding on the FTC, the public, or corporations, the FTC can bring enforcement actions pursuant to section 5 if a marketer makes a claim that is inconsistent with the guides.

The guides cover multiple subject matters, but three themes are evident: (1) claims that are scientifically unsubstantiated, (2) claims that emphasize the environmental benefits of one aspect of a product without acknowledging other detrimental aspects, and (3) certifications and seals of approval. See Guides for the Use of Environmental Marketing Claims, 16 CFR 260 , 77 Fed. Reg. 62122 (Oct. 11, 2012).

Scientifically unsubstantiated claims. The FTC wants marketers to avoid claims that cannot be scientifically substantiated. For example, claiming that X product is “green” or “eco-friendly” is too broad. Such claims should be qualified in a manner that is “clear, prominent, and specific.” Similarly, “competent and reliable scientific evidence” must support any claim that a product reduces carbon emissions, is compostable, or is non-toxic.

Disproportional emphasis on certain environmental benefits. The FTC also encourages marketers toward claims that are forthright about all aspects of a product rather than claims that emphasize one environmental benefit without acknowledging the costs of “greenness” or other aspects that reduce any overall environmental advantage. The guides provide specific instructions for the following types of claims:

Carbon Emission Reduction Claims	Claims must “disclose whether the offset purchase pays for emission reductions that won’t occur for at least two years.”
Compostable Claims	Claims must be qualified if the product cannot be composted “at home safely or in a timely way.”
Degradable Claims	Unqualified claims must be accompanied by proof that the “entire product or package will completely break down and return to nature within a reasonably short period of time after customary disposal.” A “reasonably short period” is one year.
Free-of Claims	Product cannot “have more than trace amounts or background levels” of the “free-of” substance. It is “deceptive to claim that a product is ‘free-of’ a substance if it is free of one substance but includes another that poses a similar environmental risk.”
Recyclable Claims	Claims must be qualified “when recycling facilities are not available to at least 60 percent of the consumers or communities where a product is sold.”
Refillable Claims	Claims must be qualified unless “a way to refill the package” is provided.

Certifications and seals of approval. Finally, the Green Guides emphasize that because certifications and seals of approval may act as endorsements, marketers should (1) “disclose any material connection to the certifying organization”; (2) use only certifications and seals that “clearly convey the basis for the certification”; otherwise, “the seals or certifications are likely to convey general environmental benefits”; and (3) “identify, clearly and prominently, specific environmental benefits” if the basis for a certification is not provided.

Federal Enforcement
The FTC has brought the following enforcement actions related to the 2012 Green Guides:

In all of these cases, companies settled the FTC charges, and the FTC issued orders prohibiting the companies from continuing their misrepresentations and requiring them either to back the claims with “competent and reliable scientific evidence” or to stop making them. Of course, failing to comply with FTC orders can result in substantial fines. Press Release, Fed. Trade Comm’n, Four National Retailers Agree to Pay Penalties Totaling $1.26 Million for Allegedly Falsely Labeling Textiles as Made of Bamboo, While They Actually Were Rayon (Jan. 3, 2013).

The FTC repeatedly emphasizes its interest in consumers and their right to reliable information about the products they are purchasing. “Whether they’re buying diapers or dishwashers, consumers base their purchasing decisions on claims about a product’s attributes. . . . Consumers can count on the FTC to make sure claims made by marketers are meeting the standards for truthfulness, accuracy, and substantiation.” Press Release, Fed. Trade Comm’n, Down to Earth Designs, Inc. Settles FTC Charges That Its Environmental Claims for Diapers and Related Products Were Deceptive (Jan. 17, 2014).

State Regulation and Enforcement
In addition to federal regulation, several states also have statutory schemes that specifically address misleading environmental marketing claims, and, of course, many states’ general consumer protection laws apply to such claims as well. See, e.g., Fla. Stat. §§ 501.201, 817.41; Cal. Civ. Code §§ 1750, 1780, 17200. Notably, because the Green Guides are not binding, they do not preempt state law, but neither does compliance with state law necessarily preclude an FTC enforcement action.

Public Discourse and Consumer Enforcement
Federal and state governments are not the only groups on alert for deceptive environmental marketing claims. The public is as well. In 2007, Kevin Tuerff launched the Greenwashing Index, “a way for consumers to identify companies that are honestly trying to be better environmental stewards rather than simply trying to save money or make cosmetic changes that make no difference for the environment at all.” Glenn Swain, “On the Alert for Misleading Ads,” N.Y. Times Blog (Nov. 16, 2011).

The Greenwashing Index asks five questions to determine the honesty of marketing claims: (1) Does the ad mislead with words? (2) Does the ad mislead with visuals or graphics? (3) Does the ad make vague claims or claims that are seemingly not provable? (4) Does the ad overstate or exaggerate how green a company’s product or service is? (5) Does the ad leave out or mask important information to make the green claim sound better? Using these questions, consumers rate an advertisement as to its authenticity, and the index totals the ratings to give an advertisement an overall score. Consumers can also leave comments regarding the accuracy of specific marketing claims. See Greenwashing Scoring Criteria, Greenwashing Index.

A cursory review of the Greenwashing Index reveals ratings of claims made in a variety of industries—e.g., agriculture, energy/utilities, food/beverage, and health care. Although the ratings are primarily focused on television/video advertisements rather than on written claims or product packaging, the site nevertheless allows the public to play a “regulatory” role and hold corporations accountable for the accuracy of environmental marketing pitches. Similar entities also intent on holding corporations accountable are TerraChoice Environmental Marketing, Inc., which discusses and chronicles greenwashing onwww.sinsofgreenwashing.com, and the Greenwashing Blog, www.thegreenwashingblog.com, which seeks to help consumers discern which companies are “genuinely interested in providing their customers a truly greener choice.”

Private Lawsuits
Private lawsuits are, by far, the most costly result of misleading environmental marketing. Two recent cases serve as good examples of the vigilance with which corporations must approach their efforts to market products as “green.” In 2011, SC Johnson & Son Inc. settled false advertising claims regarding the “Greenlist” logo on their Windex products. The lawsuits, two proposed class actions brought by consumers, alleged, among other things, that (1) the logo implied independent certification of environmental friendliness when it actually was simply an internal designation and (2) the product was not environmentally beneficial because it contained synthetically made cleaner toxic to humans and animals.See Koh v. S.C. Johnson & Son, Inc., No. C-09-00927, 2010 WL 94265 (N.D. Cal. Jan. 6, 2010). Similarly, in 2012, a class action was filed against Dole Food Company, Inc., alleging that the company “markets and sells its bananas as though they were farmed in an ecologically friendly and otherwise sustainable manner,” when in fact “some of Dole’s bananas . . . are produced in a way that destroys natural ecosystems,” contaminates water, and “poisons local residents.” See generally Complaint, Laderer v. Dole, No. CV12-09715 CAS (AGR), 2012 WL 5815734 (C.D. Cal. Nov. 13, 2012).

Although both SC Johnson and Dole settled the class actions and avoided associated litigation costs, the companies certainly did not avoid the public relations nightmare that inevitably comes with allegedly misrepresenting a product’s “greenness.”

Conclusion
In sum, companies cannot be glib about their environmental marketing pitches. Do you have clients that make environmental marketing claims in their product packaging, written materials, or audiovisual advertisements? Consider a conversation or a training session that advises them of the boundaries and potential pitfalls in this area. Encourage them to establish procedures for regularly reviewing all claims for compliance with the Green Guides and state law. Above all, claims must be accurate and scientifically supportable. Misrepresenting a product’s benefits is more than just legally unsound. It is a reliable way to generate negative publicity in the eyes of a public that is ever-growing and ever-more concerned about our world’s environmental future.

Republished with permission. This article first appeared in American Bar Association on June 16, 2015.