Advisories April 11, 2022

Food & Beverage / Environment, Land Use & Natural Resources Advisory: Making Environmental Marketing Claims: A Balancing Act

Executive Summary
Minute Read

Our Food & Beverage; Environment, Land Use & Natural Resources; and ESG Advisory Groups outline regulatory and litigation developments in environmental claims on product labels and provide insights on how marketers can mitigate risk for products marketed in the United States and globally.  

  • Regulatory developments: Green Guides updates and new state legislation
  • SEC climate disclosure rules and litigation challenges on the rise
  • Best practices

“Green” claims and commitments—from “recyclable” to “sustainable” to third-party certified—are proliferating on product labels and websites, in corporate reports, in Securities and Exchange Commission (SEC) filings and investor communications, and in other media. Regulators, investors, consumer class action attorneys, nongovernmental organizations (NGOs), and competitors alike are paying attention. Labeling and advertising claims that highlight a product’s environmental impact are increasingly scrutinized. Accusations of “greenwashing” abound. How can marketers tout environmental benefits while avoiding scrutiny?

Regulatory Developments: FTC Green Guides Update and New State Legislation

In recent years, marketers of food, consumer goods, and services have increasingly been making use of environmental marketing claims to meet consumer demand for products and services with environmentally friendly attributes, as well as to ensure alignment with sustainability pledges levied by retailers. Understanding how these claims are regulated at the federal and state levels is the first step in ensuring statements comply with applicable requirements.

At the federal level, environmental marketing claims are subject to the Federal Trade Commission (FTC) Act of 1914, which declares unlawful “unfair or deceptive acts or practices in or affecting commerce.” The FTC Guides for the Use of Environmental Marketing Claims (“Green Guides”) establish the FTC’s “current views about environmental claims” and describe situations when claims may or may not be consistent with the FTC Act, helping marketers avoid making claims that are unfair or deceptive under Section 5 of the FTC Act. Some states (e.g., New York) have adopted portions of the FTC Green Guides into state law.

Importantly, the Green Guides themselves are not binding but are nevertheless an important tool that industry can use to ensure claims conform to federal guidance. And the FTC can take action “if a marketer makes an environmental claim inconsistent” with the Green Guides. Over the past several years, the FTC has initiated enforcement actions against marketers targeting various environmental claims, such as “Green Promise” and “Eco Assurance” seals, VOC-free claims, and certified organic, among others, as violations of the FTC Act. While the FTC and state enforcement action targeting environmental claims has been relatively sparce over the past several years, should resources permit, we expect increased regulatory enforcement given consumer interest in this space.

Media Contact
Alex Wolfe
Communications Director

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