Eco-Claims and Green Branding: The Importance of Being Earnest
As consumers are becoming more sensitive to the environment, companies are trending toward branding their goods and services with eco-friendly claims such as “carbon-neutral,” “natural” and the like.
February 22, 2018 at 02:15 PM
6 minute read
To quote Kermit the Frog, “it's not easy being green”—this goes for all businesses who strive to tap into the hearts, minds and wallets of the green-conscious consumer. As consumers are becoming more sensitive to the environment, companies are trending toward branding their goods and services with eco-friendly claims such as “carbon-neutral,” “natural” and the like. Sadly, not all claims are made the same, sometimes, such claims are just instances of “greenwashing”—the deceptive use of green marketing that can mislead customers. Thus, regulators, stakeholders and consumers are increasingly scrutinizing eco-claims and demanding transparency—consumers want to know what they are paying for. While intentions may be good in sending out the message that your company's products or services are eco-friendly in some respect or another, the bugaboo for counsel is whether your claims are actually eco-compliant. This article will provide a brief overview of industry and regulatory standards around eco-claims and green-branding, case studies and guidelines for best practices.
Who 's Watching?
Eco-claims/green-branding are policed and prosecuted by various sources—regulatory bodies (governmental and industry), competitors and consumers (or their watch-dogs, including class action plaintiffs attorneys). It goes without saying that exposure by any one of these sources can negatively impact a company's reputation.
On the regulatory front, the Federal Trade Commission (FTC) prosecutes such claims under Section 5 of the FTC Act, which prohibits deceptive acts and practices in commerce. Under Section 5, marketing claims must be accurate and reasonably substantiated by competent and reliable evidence. The FTC also issued its “Guides for the Use of Environmental Marketing Claims,” a.k.a. the “Green Guides,” which set out general principles and guidance to its position on terms like “eco-safe,” “renewable,” “organic,” etc.
In addition, state enforcement agencies can regulate and take action against companies making eco-claims. For example, states such as California, Michigan and Maine adopted legislation that incorporate the FTC's eco-advertising guidelines. States also have their own guidelines around terms such as “biodegradable,” “recyclable,” etc.
Outside the government, various organizations engage in self-regulation by providing third-party certification. A certification mark is owned by an entity that allows other businesses to use the mark if it meets certain standards. Such marks include LEED certification, USDA Organic, and ECOLOGO. These organizations also provide strict guidelines on how to use such marks.
Finally, social media represents the court of public opinion. While social media is a fantastic platform for advertising, it is also a popular avenue for calling out companies making questionable marketing claims. For example, Cosmetic Warriors Ltd (owner of Lush brand products) was slammed by bloggers who found that its allegedly “handmade,” “natural” and “fresh” products contained preservatives like parabens. With social media driving consumer awareness, it is crucial to a brand's reputation to avoid a social media fiasco.
Every Industry Impacted
Eco-claims affect almost every industry, the below examples are a small sampling of claims from various industries to illustrate the importance of making proper eco-claims.
In 2016, Honest Company, founded by Hollywood star Jessica Alba was peppered with lawsuits in California and New York after a Wall Street Journal report showed that its “all natural” home and personal care products contained sodium lauryl sulfate, a known skin irritant. In the California class action, plaintiffs brought claims of negligent misrepresentation and violations of California's Consumer Legal Remedies Act, False Advertising Law and Unfair Competition Law. The Honest Company eventually reached a $1.55 million settlement with plaintiffs. See The Honest Company Sodium Lauryl Sulfate SLS Marketing and Sales Practice Litigation, No. 2:16-ml-027919-AB-RAO (C.D. Ca 2016).
Kimberly-Clark Corp. was also hit with a class action for making misleading “natural” statements about its Huggies diapers and wipes in Franjul v. Kimberly-Clark, No. 15-cv-06200, (S.D.N.Y. 2015). The products, while packaged with “pure and natural” and “natural care” statements, contained chemicals and potentially harmful ingredients. For example, the Huggies Natural Care Wipes contained sodium methylparaben, a chemical banned in the European Union as it can strip pigment from the skin. Plaintiffs asserted violations of the Magnusson-Moss Warranty Act, breach of warranty, among other claims and the parties ultimately settled.
In 2014, the FTC brought a case against American Plastic Lumber, Inc. (APL) for misleading consumers about its plastic lumber products. The FTC went after APL for marketing its products as made out of post-consumer recycled content when most of its products generally contained less than 79 percent post-consumer content, and, about 8 percent of its products contained no post-consumer recycled content at all.
As noted above, while certification marks are a good way to communicate green branding, misuse of certification marks can lead to trouble. Consumers brought a class action against Whirlpool Corp. (Whirlpool) over its use of the Energy Star certification mark on its KitchenAid refrigerators in Dei Rossi v. Whirlpool, Case No. 2:12-cv-00125 (E.D. Ca 2016). An investigation launched by the Department of Energy, however, revealed that KitchenAid appliances did not meet Energy Star standards. Plaintiffs brought claims for breach of express warranty and violation of California consumer protection law, among other claims. The court found that placement of a certification mark on a product could serve as an express warranty. The parties eventually settled.
What You Can Do to Be Eco-Compliant
While eco-claims are appealing for a myriad of reasons it should also be approached cautiously. To ensure you claims are not misleading, counsel should review advertising material and content for regulatory and claim compliance. It is also important to stay on top of new regulations, laws and litigations in one's industry. As green claims are likely here to stay and with increased scrutiny, ultimately, you will likely spend less “green” if you make sure your claims are eco-compliant.
Michelle Mancino Marsh is a partner at Arent Fox's intellectual property group. She practices in the areas of unfair competition/false advertising, trademark, copyright and patent law, anti-counterfeiting/anti-piracy, internet law and fashion and wearable technology law. Her clients span a broad range of industries including fashion and retail, food and beverage, computer software and hardware, educational services, financial and consulting services, pharmaceutical, and media and entertainment.
Janice Phaik Lin Goh is an associate at Arent Fox's intellectual property group and practices in the areas of licensing, trademark, advertising and marketing, copyright, and e-commerce. Her work includes reviewing advertising and packaging content, policing, clearing and enforcing trademarks, and drafting license agreements for clients across various industries.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllNewly Public Biotech Startup Hires Life Sciences Veteran as GC
Prof's Stinging Conclusion: Lawyers for Purdue Pharma Were 'Overzealous Accomplices in Corporate Misconduct'
6 minute readSage Therapeutics Axes GC After Drug-Pipeline Failures Force Cost-Cutting
After Guiding Illumina Through Harrowing Merger Fight, GC Charles Dadswell to Depart
Trending Stories
- 1Thursday Newspaper
- 2Public Notices/Calendars
- 3Judicial Ethics Opinion 24-117
- 4Rejuvenation of a Sharp Employer Non-Compete Tool: Delaware Supreme Court Reinvigorates the Employee Choice Doctrine
- 5Mastering Litigation in New York’s Commercial Division Part V, Leave It to the Experts: Expert Discovery in the New York Commercial Division
Who Got The Work
J. Brugh Lower of Gibbons has entered an appearance for industrial equipment supplier Devco Corporation in a pending trademark infringement lawsuit. The suit, accusing the defendant of selling knock-off Graco products, was filed Dec. 18 in New Jersey District Court by Rivkin Radler on behalf of Graco Inc. and Graco Minnesota. The case, assigned to U.S. District Judge Zahid N. Quraishi, is 3:24-cv-11294, Graco Inc. et al v. Devco Corporation.
Who Got The Work
Rebecca Maller-Stein and Kent A. Yalowitz of Arnold & Porter Kaye Scholer have entered their appearances for Hanaco Venture Capital and its executives, Lior Prosor and David Frankel, in a pending securities lawsuit. The action, filed on Dec. 24 in New York Southern District Court by Zell, Aron & Co. on behalf of Goldeneye Advisors, accuses the defendants of negligently and fraudulently managing the plaintiff's $1 million investment. The case, assigned to U.S. District Judge Vernon S. Broderick, is 1:24-cv-09918, Goldeneye Advisors, LLC v. Hanaco Venture Capital, Ltd. et al.
Who Got The Work
Attorneys from A&O Shearman has stepped in as defense counsel for Toronto-Dominion Bank and other defendants in a pending securities class action. The suit, filed Dec. 11 in New York Southern District Court by Bleichmar Fonti & Auld, accuses the defendants of concealing the bank's 'pervasive' deficiencies in regards to its compliance with the Bank Secrecy Act and the quality of its anti-money laundering controls. The case, assigned to U.S. District Judge Arun Subramanian, is 1:24-cv-09445, Gonzalez v. The Toronto-Dominion Bank et al.
Who Got The Work
Crown Castle International, a Pennsylvania company providing shared communications infrastructure, has turned to Luke D. Wolf of Gordon Rees Scully Mansukhani to fend off a pending breach-of-contract lawsuit. The court action, filed Nov. 25 in Michigan Eastern District Court by Hooper Hathaway PC on behalf of The Town Residences LLC, accuses Crown Castle of failing to transfer approximately $30,000 in utility payments from T-Mobile in breach of a roof-top lease and assignment agreement. The case, assigned to U.S. District Judge Susan K. Declercq, is 2:24-cv-13131, The Town Residences LLC v. T-Mobile US, Inc. et al.
Who Got The Work
Wilfred P. Coronato and Daniel M. Schwartz of McCarter & English have stepped in as defense counsel to Electrolux Home Products Inc. in a pending product liability lawsuit. The court action, filed Nov. 26 in New York Eastern District Court by Poulos Lopiccolo PC and Nagel Rice LLP on behalf of David Stern, alleges that the defendant's refrigerators’ drawers and shelving repeatedly break and fall apart within months after purchase. The case, assigned to U.S. District Judge Joan M. Azrack, is 2:24-cv-08204, Stern v. Electrolux Home Products, Inc.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250