a. Carbon Claims: While the US Guide focuses on
carbon offsets, other guidelines cover not only that but also
"carbon neutral" and similar claims – namely, New
Zealand, Australia, Norway, the UK and ISO 14021.
Guidelines in the latter jurisdictions specify what you need to
put in your ads by way of qualification – for example,
identifying: i) which elements of the life cycle you have
"offset"; ii) which "Scopes" ofemissions have
been offset (Scopes 1, 2 and/or 3, under the Greenhouse Gas
Protocol); iii) what offset scheme you've used; and/or iv)
sources of further information about the offset scheme.
b. Public Access to Your Substantiation: The US
Guide doesn't recommend, as do ISO 14021 and jurisdictions like
Canada and the UK , that companies either release to the public
information that verifies a claim or at least provide access to the
information on request.
Indeed, ISO 14021 and the UK add the strict kicker that if your
claim relies on confidential information for its verification, you
shouldn't make the claim. Canada's Guide doesn't go
quite that far. It says that if your claim is based on confidential
information, you should be prepared to make the substantiation
available to a regulator, if asked.
c. Encouraging Bad Environmental Practices: The
US Guide doesn't prohibit ads from showing scenes that would
encourage pollution or harm to the environment, as some European
guidelines and Brazil's guidelines do.
d. Making Consumers Feel Guilty: The US Guide
doesn't prohibit, "techniques which manipulate
consumers' emotions or conscience," as Norway's
guidelines do. Examples of unfair claims in Norway are, "Think
of the polar bears: buy energy-efficient insulation." and
"Drink coffee with a better conscience."
e. Guidelines for Specific Products: The US
Guide doesn't include special guidelines directed to certain
product categories, as some other countries have done for vehicles,
electricity, energy for house heating, decorative coatings, growing
media, greeting cards and cleaning products, for example.
f. Sustainability Claims: The FTC declined to
delve into claims of "sustainability." Not so in some
other guides. ISO 14021 was clear in its original form that no
claim of achieving sustainability should be made. The amendments to
ISO 14021 say that no "unqualified" claim of
sustain-ability should be made (though without offering any details
on the kinds of qualifications that would be appropriate).
Granted, "sustainability" is a bit of a thicket. A
good illustration comes from a 2008 case in which Cotton USA was told by the UK selfregulatory
Advertising Standards Authority ("ASA") not to call its
cotton "sustainable". The advertiser argued that its
cotton was natural, biodegradable and renewable and met the
criteria of sustainability put forward by a number of major
organizations (including the UN) – namely, economical
viability, environmental protection and social responsibility.
The challenger was not having any of it and submitted that
cotton was a pesticide and insecticide-intensive crop that could
seriously deplete groundwater; and, furthermore, that cotton
growers in West Africa were having a terrible time because of
subsidies granted in the US cotton industry.
The advertiser came back saying that current pesticides were
more targeted, less toxic and less persistent in the environment,
that the vast majority of cotton was genetically modified, which
reduced its need for intensive agriculture, that cotton was not
water-intensive, and, furthermore, that there were a number of
reasons the cotton growers in West Africa were having a terrible
time apart from US subsidies. Of course, there was a division of
scientific opinion on a lot of these issues and ASA wasn't sure
how clear it was that genetic modification of the cotton, which had
allowed some of these benefits, wasn't harmful – etc.,
etc. One can see why the FTC would say – OK, this is a
quagmire; we're not going there (at least yet).
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Directors and their corporations may be at a loss to understand what they must do to minimize their risk of environmental liability in light of the recent Ontario Ministry of Environment order and settlement agreement concerning Northstar Canada.
In the aftermath of the Northstar case, it is more important than ever for directors and officers to manage environmental issues proactively and implement policies to help minimize their risk exposure.