This series, “It isn’t easy being green,” will provide a brief overview of the major legal issues associated with “green” marketing claims and offer a practical framework for analyzing and reducing risk.
The color of the new millennium is definitely green. Over the past 10 years there has been a veritable explosion of the “green machine,” spawning a whole lexicon of green language, green expectations and green statements. Indeed, the green movement has hit mainstream USA in a tangible way—at the current pace it is projected that “green marketing” will account for more than $3.5 trillion in spending by 2017. Major retailers, including Wal-Mart Stores Inc., have reported a strong uptick in consumer demand for “green” and “organic” products even in a flagging economy, while the number of green products has skyrocketed virtually overnight, with growth of as much as 500 percent since 2009.
The question is, at what risk? When do green promises or representations cross the boundary from being aspirational statements to enforceable promises? And when does a clever marketing turn of phrase create litigation or regulatory risk? Opting out of the green revolution is not an option for most companies. Opting in responsibly is a business mandate.
The transparency imperative
Riding sidecar to the growing demand for green products and services is an insistence on greater transparency and meaningful substantiation of green claims. The rallying cry suggests a growing intolerance for greenwashing and related “sins.”
The term “greenwashing” is not a new one. It was coined in 1986 in reference to the hotel industry practice of encouraging reuse of towels as a green initiative, even though many hotels were making little to no effort to reduce energy waste.
In broad terms, “greenwashing,” “greenpuffing” and the “green sheen” refer to the practice of inflating the stated green benefit of an act, product or practice, typically for the purpose of achieving a marketing, public relations or profits goal. The exponential increase in “green claims” (including claims that products are natural, biodegradable, eco-friendly, non-toxic, carbon-neutral, sustainable and “certified green”)has sparked corresponding skepticism about the accuracy of those claims. While certain product categories (i.e., paper products, beauty products) are now seasoned players in the green game, other product categories, such as cleaning supplies, are relative newcomers to the field.
Neophytes to the green marketing world should expect heightened scrutiny of green claims. Newer entrants into the field, including toys and electronics, have received poor marks on reliability and accuracy of allegedly green attributes from watchdog organizations, suggesting an evolving rigor with respect to product review.
A subspecies of the broader category of false advertising claims, “greenwashing” claims typically center on exaggerations—and in some instances outright fabrications—of a product’s green characteristics. Over the past few years, “seven sins” of greenwashing have emerged as the touchstone for evaluating overly ambitious green claims.
- Sin of the hidden trade-off: One of the most common greenwashing sins, this refers to the practice of highlighting one purportedly green attribute of a product, while ignoring equally or more important qualities that, when considered in totality, would prevent the product from claiming the title “green”. For example, paper manufactured from a sustainably harvested forest may not qualify as “green” if the production process itself resulted in high rates of water and air pollution or greenhouse gas emissions. The result is an exaggerated and unsubstantiated green claim.
- Sin of no proof: Companies should be able to prove all green claims (like all marketing claims) by referencing specific and accessible supporting data. Products that are touted as “green” without the benefit of appropriate substantiation are guilty of this sin.
- Sin of vagueness: Making sweeping statements such as “The product is ‘all natural,’” when there is no reasonable basis for a consumer to understand any limitation on the designation falls under the heading of overly vague.
- Sin of irrelevance: This occurs where a product touts some attribute that is meaningless to consumers attempting to make environmentally preferable product selections. For example, touting a product as “chlorofluorocarbon (CFC)-free” sounds like a good thing, but is rendered meaningless with the understanding that all products are CFC-free, since CFCs are banned by law.
- Sin of lesser of two evils: Classic examples of the “lesser evil” sin include the “fuel efficient” SUV or the “organic” cigarette. Although these products might do well in a head-to-head comparison in their narrow product category, these “green” claims ignore the environmental impact of the category as a whole.
- Sin of fibbing: This is perhaps the least frequent and most aggressive type of green claim—the one that is simply made up.
- Sin of worshipping false labels: A developing area of concern, this sin refers to products that implicitly or expressly reference third-party endorsements where no such endorsement exists.