Environmental Advertising Ahead; Proceed With Caution

According to Kermit the Frog, it’s not easy bein’ green. Promoters of environmentally friendly or "green" products soon find out how difficult it can be. Many industries face detailed advertising regulations for claims that food products are "organic" or have specific health benefits, and all advertising is subject to federal and state laws prohibiting misleading or deceptive claims.

Environmental claims in particular are often unintentionally misleading or deceptive if not written with care. Technically true claims are misleading if not adequately qualified. For example, paper plates may be "biodegradable" in theory, but because they do not degrade under normal landfill conditions, federal regulators have determined that the term is misleading. The Federal Trade Commission (the "FTC") publishes nonbinding guidance regulations to help advertisers understand how the FTC evaluates environmental claims. 16 CFR pt 260 (the "Guides").

Because the Guides are not preemptive law, advertisers must also consider various state-law enforcement and possible private actions by competitors or consumers when navigating the potential minefield of environmental advertising. At the same time, several states officially recognize and follow the Guides in evaluating environmental claims. The Guides provide examples of both acceptable and unfair uses of specific claims, such as "environmentally friendly," "degradable," "compostable," "recyclable," "recycled content," "source reduction," "refillable," and "ozone safe." If carefully followed, the Guides can help avoid FTC action against an advertiser for environmental marketing.

Washington and Oregon approach environmental advertising under general prohibitions of deceptive or misleading practices, but several other states specifically regulate environmental claims. Rhode Island, for example, takes the extreme position of prohibiting certain terms like "degradable" and "environmentally safe" on all products,² while California requires advertisers to keep a public file, including a summary of the basis for the environmental claim, a list of measures taken to reduce environmental impact of the product, a history of any previous violations of law associated with the product, and a statement of compliance with the Guides.³ Violation of California’s advertising code is punishable by up to six months’ imprisonment or a fine of up to $2,500 per violation. Each person within the unfair ad’s projected audience counts in a potential violation, so fines can be substantial.

Before using environmental claims in nationwide promotions or labeling, it is important to consider the laws of each state that the promotion could reach. Conducting scientifically valid public-opinion surveys showing the public perception of specific claims or possible implied claims is a good idea, particularly with more general environmental claims. Surveys are most useful in states like Washington and Oregon, which have general "misleading, deceptive, or unfair" standards of liability. Without such documentation, it is very difficult to refute an accusation that a claim is misleading under possible, even outlandish, interpretations. With consumer-survey validation, it is possible to defend the environmental claim and show in good faith that consumers are not misled or confused.

One of the most prevalent forms of environmental marketing is the promotion of recycled content in products or packaging. Recycled-content claims are considered misleading unless the content is recovered or otherwise diverted from the "solid-waste stream," either during a manufacturing process (preconsumer) or after consumer use (postconsumer). Preconsumer content must be material diverted from the solid-waste stream in production, excluding scrap re-used in the same process. Manufacturers are sometimes surprised to learn that the FTC does not allow regular reclamation or reuse of materials within a production process to be promoted as recycling. Postconsumer content is somewhat easier to define and substantiate because products that have been used by consumers are presumed part of the solid-waste stream under the Guides, and they generally meet the public perception of "recycled."

The Guides apply to all environmental claims included in labeling, advertising, promotional materials, and all other forms of marketing, whether asserted directly or by implication, through words, symbols, emblems, logos, depictions, product brand names, or any other means.4 Press releases are also considered promotional materials under the same restrictions as other advertising. An implicitly environmental logo alone is subject to the same FTC scrutiny as express claims and runs a high risk of being considered an unqualified claim of environmental benefit. Unqualified claims of environmental benefit are very difficult to substantiate. While not all logos are presumed to make environmental claims, when designing and using an environmentally related logo, advertisers should consider unintended implications that a consumer might see in the logo, as well as the intended message.

The final evaluation of environmental claims is inherently subjective because it depends on what consumers see in a message regardless of the advertiser’s intent. The FTC and state enforcement officials will respond to consumer calls and conduct public-opinion surveys to determine whether consumers are being misled or deceived. To reduce the risk that legitimate environmental claims can be challenged, it is important to review the Guides and the laws of states where the advertising will appear and to carefully qualify and explain the basis of environmental claims. Advertisers should also consider conducting preliminary consumer surveys to document the public perception of a promotion and to help gauge public reaction to or misunderstanding of environmental claims.

1 - Arizona, California, Illinois, Indiana, Maine, Maryland, Massachusetts, Minnesota, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, and Wisconsin have all enacted laws or regulations pertaining to environmental advertising. The laws of these states (and any foreign jurisdiction in which a product might be sold, particularly Canada) should be considered before an environmental advertising program is implemented. A number of states have refrained from or modified environmental advertising regulations in light of the Guides, which were drafted with the input and cooperation of several states’ attorneys general.

2 - RI Gen Laws § 23-18.14-3.

3 - Cal Bus & Prof Code § 17580. 16 CFR § 260.2.