Regulatory Guidelines for Environmental AdvertisingOctober 2019
As consumer demand for environmentally friendly products continues to rise, businesses are increasingly using environmental claims in their advertising. Below are a refresher on the law and some recent enforcement regarding environmental-advertising claims.
In 1992, the Federal Trade Commission (FTC) issued the “Green Guides” to help businesses avoid misleading or deceptive environmental advertising. See 16 C.F.R. § 260 et seq. The FTC, along with the National Advertising Division (NAD) of the Better Business Bureau and state and federal courts, continue to challenge violations of the Green Guides as well as pursue more traditional legal theories such as false advertising and deceptive and unfair trade practices.
The Green Guides have been revised several times to keep pace with the types of claim being made and with the use of certifications or seals of approval. Currently, the Green Guides address the following types of advertising claims: general environmental benefits; carbon offsets; certifications and seals of approval; compostable; degradable; “free-of”; non-toxic; ozone-safe and ozone-friendly; recyclable; recycled content; refillable; renewable energy; renewable materials; and source reduction. See 16 C.F.R. § 260.4-17.
The Green Guides apply broadly to environmental claims across all media of marketing and advertising, including labeling and promotional materials, and they apply whether such claims are asserted directly or by implication, through words, symbols, logos, depictions, product brand names, or any other means. See 16 C.F.R. § 260.1(c).
The Green Guides contain general principles that apply to all environmental-marketing claims, including qualifications and disclosures; distinctions between whether the marketing claim refers to the product, packaging, or service; overstatements of an environmental attribute; and product comparison claims. See 16 C.F.R. § 260.3.
Section 5 of the FTC Act empowers the agency to evaluate whether a claim made by a business is unfair or deceptive. The Green Guides codify what constitutes an unfair or deceptive environmental claim. See 16 C.F.R. § 260.1(a).
The NAD also may challenge environmental advertising claims. If businesses do not comply with the NAD’s recommendations, the NAD may refer the case to the FTC for possible enforcement.
Additionally, environmental advertising claims can give rise to legal liability under various state laws addressing consumer protection, advertising, and deceptive and unfair trade practices.
Below are examples of recent enforcement actions relating to environmental advertising claims.
In 2017, the NAD challenged a coffee company's environmental claims that its single-serve pods were “certified 100% compostable.” In re Kauai Coffee Company, LLC, Case No. 6078 (NAD May 5, 2017). Although, as mandated by the Green Guides, the coffee company used appropriate qualifying language in much of its advertising to explain that the product cannot be composted at home and that the appropriate composting facilities are not available in most places where the item is sold, it failed to include such disclosures on all advertisements for the pods. See 16 C.F.R. § 260.7. The NAD found that the failure to include the qualifying language next to the claim of compostability in all advertisements was misleading. The NAD therefore recommended that the company discontinue or modify the claims, as well as discontinue its general environmental claims such as, “Don’t trash the Earth with your coffee. Brew & Renew,” because general environmental claims are difficult to support and are more likely to be deemed deceptive.
More recently, in a class action filed in California, another coffee company encountered a challenge to claims that its single-serve coffee pods were “recyclable.” Smith v. Keurig Green Mountain, Inc., No. 18-cv-06690, 2019 WL 2716552, at *1 (N.D. Cal. June 28, 2019). The Northern District of California ruled that due to the pods' size, composition, and lack of a market for reuse, they were not actually recyclable. For example, although the plastic pod was recyclable, the court found that the foil lid was not recyclable and was difficult to remove. The Green Guides state that if a product is rendered non-recyclable because of its size or components—even if the product’s composite materials are recyclable—then labeling the product as recyclable constitutes deceptive marketing. See 16 C.F.R. § 260.12.
Consumer advocacy groups also are increasingly calling attention to what they regard as deceptive or false claims. In June of this year, two consumer advocacy groups filed suit in Washington, D. C. against a meat packer, under the District of Columbia’s consumer protection law regulating deceptive advertisements. They alleged deceptive advertising and marketing of the packer’s chicken products, namely that the company's claims that its products were produced in an environmentally responsible way were false and misleading because of how the chickens are bred, hatched, raised, transported, and killed. See Complaint at 5-8, Food & Water Watch, Inc. v. Tyson Foods, Inc., (D.C. Super. Ct.) (2019 CA 004547 B). The packer also used its website and social media to promote its sustainable practices and commitment to protecting the planet. The suit, which is ongoing, alleges a lack of support for these general environmental claims.
If you need assistance complying with the Green Guides or otherwise crafting environmental-advertising claims, please contact one of our Advertising, Promotions & Social Media attorneys.