Greenwashing, 0313 SCBJ, SC Lawyer, March 2013, #1

Author:Elizabeth B. Partlow


2013 #1

South Carolina Bar Journal

March, 2013


\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0 Elizabeth B. Partlow

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0You've seen the labels on consumer products: "Eco-friendly." "100% Natural." "Made from sustainable materials." Or you've seen the sign in the hotel room informing you that you can help to conserve the Earth's vital resources just by using that towel a second day. Or the notice on the hand dryer in the restroom that claims electric hand drying is more environmentally friendly than using paper towels. It seems that every company wants to claim that its products and activities are environmentally benign.

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0And no wonder. Study after study indicates people want to buy environmentally friendly products. The Federal Trade Commission (FTC) says that its consumer perception study indicates that consumers perceive "environmentally friendly" or "ecofriendly" to suggest that the product has specific and far-reaching environmental benefits. A 2010 report by TerraChoice, a sustainability and marketing consulting firm now part of Underwriters Laboratories, stated that the number of "greener" products went up by 79 percent between 2008 and 2009 and by 73 percent between 2009 and 2010.1

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0The term "greenwashing" entered the American vocabulary more than 20 years ago to describe the use of vague or unsubstantiated claims that may mislead customers. The Oxford English Dictionary defines greenwashing as "creation or propagation of an unfounded or misleading environmentalist image."

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0The Federal Trade Commission and the Green Guides

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0Like other claims that may be unfair or deceptive, greenwashing claims are subject to enforcement by the FTC under Section 5 of the FTC Act.2 The FTC first published guidance (the "Green Guides") in 1992 to help marketers avoid making misleading environmental claims. Since the last revision of the Green Guides in 1998, both the number and types of environmental claims have increased. The FTC published proposed revised guides in 2010, then considered 5000 comments and the results of its own study of consumer perception before issuing the latest revisions to the Green Guides in October 2012.3

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0The Guides are not regulations, but they represent the FTC's views on the types of claims that may be deceptive. The Guides address general environmental benefit claims, such as "green" and "environmentally friendly, " and more specific claims, such as claims that the product is compostable, degradable or "free-of" certain ingredients. In addition to setting forth general principles, the Guides provide specific examples of claims that the a gency would find deceptive and claims that must be substantiated.

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0General environmental benefit claims.

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0Broad terms like "environmentally preferable" or "eco-friendly" without more explanation and substantiation, will always be considered deceptive. These types of claims are closely scrutinized by the FTC because consumers may interpret them to indicate that a product has no negative environmental impact at all. The Guides offer examples of how marketers may qualify a claim by providing clear and prominent language limiting the claim to a specific and limited benefit. A label that says "Eco-friendly" is deceptive, but a label that says "Eco-friendly: Made with recycled materials" is not deceptive if the limitation is clear and prominent; the marketer can substantiate that the entire product, except for minor or incidental components, is made from recycled material; and making the product with recycled materials makes the product more environmentally beneficial overall (e.g., making the product from recycled materials does not require substantially more energy).

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0Even if a marketer explains, and has substantiation for, the product's specific environmental attributes, the advertisement should not "imply" deceptive environmental claims. The Guides offer the following example of a deceptive implication: A picture of a laser printer in a bird's nest balancing on a tree branch, surrounded by a dense forest, with the words "Buy our printer. Make a change." in green type. Although the advertisement makes no express claim, the FTC believes that the images and text likely convey that the product has far-reaching environmental benefits, which the marketer is "highly unlikely" to be able to substantiate. Additionally, a general environmental claim may be deceptive if it highlights a specific attribute of the product that provides only a negligible environmental benefit. For example, a label that says an area rug has "50 percent more recycled content than before" may be technically true if the percentage of recycled content has increased from two percent to three percent, but the FTC believes such a claim conveys a false impression.

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0Specific environmental claims.

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0Like their predecessors, the 2012 Green Guides address numerous specific types of environmental marketing claims. Several sections are new to the Guides and reflect recent marketing trends. The Guides discuss 13 common specific product claims:

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA01. Carbon offsets: The Guides offer the common-sense observation that sellers should employ competent and reliable scientific and accounting...

To continue reading