Yesterday, Stoel Rives' Salt Lake City office hosted a seminar on Advertising Law with Catherine Lake, Josh Gigger, and myself presenting. As part of the seminar, I offered some tips on avoiding legal problems when advertising the environmental friendliness of your goods or services. Here is a summary of those tips:
Making false or misleading green claims in advertising, even if unintentional, can get you in trouble with the FTC and with consumers and competitors suing under the Lanham Act and a number of other state and federal laws. To help avoid these problems, here are five tips to consider when making green claims in advertising, including on packaging and labels:
1. Substantiate your claims.
The claim must be based on competent and reliable evidence and the basis must exist at the time the claim is made. Objective scientific research (test, studies, etc.) by qualified experts using generally accepted procedures to produce reliable results is normally sufficient to satisfy the "competent and reliable" requirement. Because the evidence must exist when you make your claim, you cannot rely on research conducted after you make the claim as proper substantiation. Companies making green claims should keep documentation and other records showing proper substantiation.
2. Be specific.
Does the claim apply to your manufacturing process, your packaging, your product, of some combination of the three? For example, if you use the word "recyclable" without any qualifications, that claim is misleading unless every component of the product and packaging is recyclable (excluding minor incidental components like the plastic lid on a soda pop bottle). You also need to be clear about how you define your advertising terms. What do you mean by "Eco Friendly" or "Ozone Safe"? Courts and the FTC tend to give very literal interpretations that include every ambiguity to such claims and therefore, clarity on the part of the advertiser is essential.
3. Qualify your claims.
If Tip #2 requires you to be more specific with your claim, you must qualify that claim with clear, prominent, and understandable language. The larger the font and the closer the statement appears to the green claim, the less likely you are to have a problem. Avoid fine print and legalese as much as possible.
4. Accurately present your claims
Comparative advertisements need to be accurate. If you advertise the product as having "50% more recycled content", it is not clear what you are comparing; it could be another version of your product or a competitor's product. A claim may be literally true but misleading: "50% More Recycled Content!" when the recycled content went from 2% to 3%. Consumers and the FTC are probably looking for something a little more substantial than 2% to 3% when products make such claims.
5. Be truthful
Finally, and perhaps most obviously, make sure your claims are true. Avoid making claims that are half-truths or otherwise leave out crucial facts. For example, fruit labeled as "organic" that uses three times as much water in the growing process. Also, toting a product as "All-Natural" in an attempt to set the product apart from competing products can be misleading because various harmful "all-natural" ingredients like arsenic, lead, or mercury are not likely to come to mind when a consumer sees the ad. Using marks or symbols that give the impression of third-party approval or certification is also misleading and has led to problems for a number of companies.
These tips are based on the FTC's Guides for the Use of Environmental Marketing Claims, or "Green Guides". For an interesting study on false or misleading green claims, check out TerraChoice's "Greenwashing Report".