The NAD[1] recently referred certain green marketing claims made by LEI Electronics Inc. (LEI) regarding its Eco Alkalines batteries to the FTC after the company stated it would not comply with the NAD’s decision and recommendation. LEI Elecs., Inc. (Eco Alkalines Batteries) NAD Report No. 5927 (Feb. 5, 2016).

LEI’s “Green” Battery Claims. LEI’s competitor Energizer Brands LLC (Energizer) filed a challenge with the NAD regarding LEI’s advertising claims touting the environmental benefits of its Eco Alkalines batteries, including several “carbon neutrality” statements. For example, LEI claims that “every purchase is carbon neutral” and that “by purchasing Eco Alkalines batteries, you’re doing your part to reduce the CO2 and climate change impact brought about by the production, distribution, and disposal of alkaline batteries.” The advertising appeared on a combination of the company’s website, an online commercial, and product packaging.

NAD Finds “Green” Claims Lack Substantiation. The NAD relied on the FTC’s Green Guides in finding that LEI lacked substantiation to support its claim. The Green Guides state that an advertiser should not make a carbon offset claim unless the emission reductions “have already occurred or will occur in the immediate future.” Absent that showing, the advertiser “should clearly and prominently disclose if the carbon offset represents emission reductions that will not occur for two years or longer.” While LEI relied on third-party certifications and a “life cycle assessment” that calculated the batteries’ carbon footprint, the NAD found this was insufficient since the Green Guides state that third-party certifications do not eliminate a marketer’s obligation to ensure that it has competent and reliable scientific evidence to substantiate environmental claims. The NAD concluded that third-party certifications alone were insufficient to substantiate LEI’s carbon neutrality claims, and recommended that LEI discontinue the claims.

LEI, however, refuses to do so. As such, the NAD has referred the claims at issue to the FTC for further review.