Posted: April 28, 2009
Red flags of green marketing
How to maximize your green marketing and avoid "greenwashing"By Andrea Anderson
Today, it seems that every company is anxious to tell its “green” story through advertising that touts the environmental benefits of its products. However, as many companies have learned, embarking on an uninformed and poorly prepared green advertising initiative can severely backfire, exposing a company to investigations and penalties by federal and state agencies, false advertising lawsuits by competitors, and perhaps worst of all, charges of “greenwashing” from the media and the blogosphere. Any one of these consequences can harm corporate identity and brand value, effectively eliminating any benefits that a green marketing campaign may have conveyed.
To minimize these risks and maximize the effectiveness of their green advertising, companies should adhere to the following guidelines for all of their advertising and promotional materials.
Your environmental claims must be accurate and not misleading
While the technical accuracy of your advertising is important, technical accuracy will not necessarily insulate your company from liability. This is because the accuracy of an environmental claim is evaluated from the average consumer’s point of view. For example, the Federal Trade Commission has determined that consumers interpret the phrase “please recycle” on a product to mean that a product is recyclable. Therefore, if product or packaging bearing this phrase is not completely recyclable, the advertising message is deceptive, even though it contains no inaccuracies.
Substantiate your environmental claims
You should substantiate all claims regarding the environmental benefits of a product before you make them. This includes specific, explicit claims as well as implicit claims. And remember that many environmental claims like “degradable” or “compostable” must be substantiated through scientific evidence, such as tests, analyses, research or studies.
Claims should be clear and specific
The more specific an environmental claim is the less likely it is to be misleading. Vague claims that are open to varying interpretations are more likely to be deemed misleading. For example, a claim like “zero carbon” on a product could lead consumers to believe that no carbon dioxide is omitted during the production of the product, when in fact the advertiser merely purchases credits to offset its carbon production. Other environmental claims like “sustainable” or “green powered” are also problematic because they are not clearly defined.
If you do use general terms or catch phrases like “eco-friendly,” “environmentally friendly,” or “sustainable,” you should qualify and explain them clearly so that consumers can understand the nature of your claim. For example, a claim that a compact fluorescent light bulb is “eco-friendly” should explain that the bulb will last longer and use 50 percent to 80 percent less energy than incandescent bulbs.
Avoid fine print
Although general environmental claims like “eco-friendly” and “earth conscious” may be acceptable when qualified and explained, any “qualifications,” “explanations” or “disclaimers” need to be clear and prominent so that they are easy for consumers to read and understand. This means that the explanations should be placed near the claims in a similar font size. Referring consumers to the company website for a full clarification of a claim made on packaging or advertising would probably not be sufficient.
Choose your certifying partners wisely
Today, there are a multitude of “certifying agencies” willing to certify that your product meets their environmental standards. Before you decide to partner with one of these organizations, understand that you may be liable for false advertising if they make inaccurate claims about your products. Therefore, choose certifying agencies with care. Work with reputable industry leaders that have established track records.
Don’t take your suppliers’ claims at face value
Similarly, if a vendor, supplier, or manufacturer makes a deceptive environmental claim to you about its product, and you repeat that claim to consumers, you are liable for false advertising. It makes no difference that you were also misled. Therefore, demand substantiation of all environmental claims made by suppliers and vendors before you include these claims in your advertising.
Take extra care with “hot-button” terms
The Federal Trade Commission has provided detailed guidance for the use of several popular advertising terms, including “degradable,” “compostable,” “recyclable” and “recycled,” among others. Before using any of these terms, you should consult the FTC’s Green Guides for the use of green marketing terms, available on the FTC’s website. Failure to comply with the FTC's guidance could result in a finding that your advertisement is false or deceptive.
New FTC guidance is coming
The FTC first published its guidance on environmental marketing claims in 1998. Since that time, many environmental claims like “sustainable,” “renewable,” “carbon neutral,” “zero carbon,” “wind powered” and “zero waste” have emerged that the FTC has not addressed.
Sensing that consumers may be misled or confused by these new terms, the FTC is in the process of updating its environmental marketing guides to include guidance on the use of recently-coined advertising terms. The FTC will likely publish new proposed guidelines some time during 2009.
Andrea Anderson is a partner in Holland & Hart’s Boulder office. She provides a full complement of trademark related services with an emphasis on strategic counseling and dispute resolution. In addition, a significant portion of Ms. Anderson's practice is devoted to assisting clients with legal issues related to their advertising and marketing claims, including "green advertising" product claims. She can be reached at (303) 473-2700 or firstname.lastname@example.org.