It is no secret that the development of products and services having environmental attributes has proliferated in recent years. In disseminating these “green” goods and services to consumers far and wide, advertisers have barraged the public with a plethora of marketing claims. However, it is becoming more and more apparent that much of the advertising used by the manufacturers, producers and suppliers of these products is false or misleading in one way or another.
Indeed, in 2007, 2009 and again in 2010, the firm TerraChoice Environmental Marketing, Inc., conducted studies of green marketing claims in the economy. In its 2007 report, TerraChoice found that “[o]f the 1,018 products examined, all but one made claims that are demonstrably false or that risk misleading intended audiences[,]” and in 2009, TerraChoice reported that “more than 98% of ‘green’ products” had engaged in at least one of its advertising no-nos dubbed the “seven sins of greenwashing” showing only a small improvement over this two-year period.
According to TerraChoice’s 2010 report, the level of deceptive advertising declined even further between 2009 and 2010, to about 95.5%. This improvement is not immaterial, especially in light of TerraChoice’s finding that among the 24 stores visited “greener” products also grew by 73%. However, it goes without saying that “greenwashing is still a significant problem.”
The apparent widespread failure on the part of advertisers to communicate accurate and useful information to consumers about the green attributes of a given product or service has the capacity to undermine the credibility of the entire green products industry and, possibly, open the door to greater regulation of commercial speech. In order to avoid turning off consumers (and turning up government oversight), advertisers must understand fully the environmental benefits of what they are trying to sell and the impacts upon the environment they will have during the course of their life cycle and carefully plan how best to communicate this information on product labels, brochures or other promotional items.
Additionally, advertisers of green goods and services should consult with an attorney, who is knowledgeable in the areas of green law and advertising regulation, regarding the legality of their marketing plans. Indeed, good legal counsel is an essential ingredient in formulating a productive and “sustainable” advertising strategy, especially given the resources that consumers, competitors and government agencies have at their disposal to challenge representations that are deceptive, misleading or unfair.
As discussed in Part 1 of our two-part series on the legal risks in green marketing, the Federal Trade Commission has stepped up enforcement of federal law prohibiting unfair or deceptive advertising in the green marketplace. In all likelihood, the FTC’s diligence in this regard will only increase in the coming months once the FTC adopts its amended and supplemented Guide for the Use of Environmental Marketing Claims (“Green Guides”), which the FTC released for public review and comment on October 6, 2010. Therefore, the time is now for businesses with green product lines to work with legal counsel to avoid advertising claims that, for example, contain ambiguous definitions or alleged benefits that either cannot be substantiated or are irrelevant to a consumer’s interest in helping the environment or promoting energy efficiency.