It’s hard to know where to begin when describing all the claims that were at issue in a recent NAD proceeding involving a challenge by Energizer to claims made by LEI Electronics (“LEI”) for its Eco Alkalines brand batteries. It’s safe to say, however, that if you’re looking for an easy way to recharge your power over the Federal Trade Commission’s (“FTC”) Green Guide requirements, you could read NAD’s decision in this matter and feel pretty juiced up.
Energizer’s challenge included alleged claims that its competitor’s batteries were eco-responsible; that they were “carbon neutral”; that they were recyclable and made from recycled materials; that they are non-toxic; that they have no environmental impact; and that they are biodegradable. (See what we mean?) Oh, and there were some actual performance claims thrown into the challenge as well.
Most of the “green” disputes were resolved rather easily. For example, the advertiser agreed to discontinue claims that its batteries had no environmental impact and to clarify that its packaging and not the batteries were made in part from recycled content. The advertiser also agreed to clarify that while its packaging was recyclable, the availability of recycling options for the batteries themselves were more limited. However, NAD was not provided with evidence that—irrespective of availability—the battery components were actually recyclable. Similarly, with respect to the non-toxic claim, although the advertiser agreed to qualify the claim, it also failed to provide NAD with evidence to support even a qualified claim.
What is, though, most interesting (at least to us) is the carbon neutral claim. It is here that LEI and NAD firmly locked horns and ultimately earned LEI a referral to the FTC. LEI conducted its own life cycle assessment (“LCA”) () to calculate the carbon footprint of its batteries. Based on that assessment it then purchased offsets through carbonfund.org and carbonNZero to bring itself into a carbon neutral state. LEI’s LCA was reviewed by both third-party certifiers and deemed adequate.
NAD faulted LEI’s carbon neutral claim in two respects. First, NAD cited the requirement in the FTC’s Green Guides that any carbon offset must occur within two years of emissions it is offsetting (absent a disclosure to the contrary). LEI, NAD said, had presented no evidence as to the time period involved in the offsets it had purchased, which included projects such as reforestation where any offset could conceivably be some time off. NAD’s decision in this regard may put pressure on third-party certifiers to be more transparent about the timing of the offsets they provide to the extent they are not doing so already.
Second, NAD had concerns about the LCA because it looked at carbon emissions associated with the Company’s Canadian distribution and recycling operation rather than the United States. The Company had argued that the two were quite comparable and that, in any event, the two third-party certifiers had accepted the LCA. In deciding this issue, NAD had less FTC guidance to rely upon because, as any Green Guide nerd knows, the FTC has declined to provide specific advice on how to conduct an LCA. The FTC, in its Statement of Basis and Purpose, said it would not mandate that an LCA be certified by a third party or be conducted pursuant to a particular ISO requirement. Instead the FTC said that the usual principles of competent and reliable scientific evidence would apply.
Because LEI indicated to NAD that it would not discontinue its carbon neutral claims, NAD has referred the matter to the FTC. Stay tuned to see if the FTC coaxes LEI back to NAD or perhaps decides to wade into what constitutes a well-conducted LCA. No matter what the outcome, however, advertisers that have been confidently relying upon third-party certifiers for carbon neutral claims may want to take a second look.