Latest Cases from the NAD on Environmental Claims Provide Helpful Practice Tips for Marketers

“Brand owners and trademark counsel alike should also be on the lookout for overreaching environmental marketing claims.”

https://depositphotos.com/8195927/stock-photo-environmentally-friendly-seal.htmlFrom consumer goods to cutting-edge industries like blockchain and crypto, consumers want more environmentally-friendly solutions. And advertisers, in response, are rushing to tout their sustainability-focused corporate missions and product solutions. In recent decisions, Butterball, Georgia-Pacific, and Everlane, the National Advertising Division (NAD) of BBB National Programs provided useful and detailed guidance on how advertisers can support sustainability claims and avoid making unqualified general environmental benefit claims that could mislead consumers.

In addition to marketing lawyers, brand owners and trademark counsel alike should also be on the lookout for overreaching environmental marketing claims. Taglines, word marks, and even logos (e.g., including imagery creating the impression that a product is more sustainable) may contain environmental advertising claims that, unless substantiated, may land the brand in a class action, NAD, or Federal Trade Commission (FTC) challenge.

Butterball: Definitive Claims Conveying a General Environmental Benefit Message versus Aspirational Claims

The first case involved claims that Butterball, a turkey producer, made in its 2018 Corporate Social Responsibility (CSR) Report about its environmental practices. Animal Outlook, a non-profit animal protection charity, brought a NAD challenge against Butterball alleging that the statements about environmental responsibility made in its report (as well as other statements concerning humane treatment and claims that its turkeys were “natural”) were unsubstantiated and thus misleading. Butterball’s CSR report claimed that Butterball is “making good food in the most responsible and sustainable way” and that it “recognizes its responsibility to protect the planet.” Animal Outlook argued that these claims conveyed unsubstantiated messages that Butterball “exceeds industry standards for environmental stewardship, protects the environment in all aspects of its business, and uses environmentally friendly practices.” Relying on the  FTC Green Guides, the NAD reminded advertisers that “marketers should not make unqualified environmental benefit claims” “[b]ecause it is highly unlikely that marketers can substantiate all reasonable interpretations” of these claims. .The NAD also noted that in its most recent revision to the Green Guides, the FTC stated that “sustainability” has “no single environmental meaning.”

With these principles in mind, the NAD agreed with Animal Outlook that the term “sustainable” when used in connection with the phrase “the most responsible and sustainable way” could be construed by consumers to mean that “Butterball’s practices are optimized in relation to their impact on the environment”—a claim not supported by the evidence in the record. The NAD thus recommended that Butterball discontinue this phrase or modify it to avoid conveying an unqualified general environmental claim.

By contrast, for the claim that Butterball “recognizes its responsibility to protect the planet,” the NAD turned to its reasoning governing aspirational claims in advertising, arguing that this statement denotes a goal to improve environmental practices and not a message that Butterball has already achieved a particular level of sustainable business practices. Ultimately, the NAD found the efforts and improvements described in Butterball’s CSR Report (e.g., reduced environmental footprint, reduction in waste per pound of product produced, reduction in electricity usage) were sufficient to support the “vague non-specific aspirations” conveyed by this claim even though they would not be sufficient to support a “definitive, general environmental benefit claim.”

Georgia-Pacific: Placement of Qualifiers for ‘Sustainable’ Claims Is Key

In Georgia-Pacific, the NAD articulated a more specific rule for using the term “sustainable” in advertising. There, the NAD challenged environmental claims Georgia-Pacific made in advertisements for its bath tissues including the statements:  “Premium comfort made sustainably” and “premium design with the environment in mind.”  Turning, once again, to the FTC Green Guides, the NAD stated that “with respect to general environmental messages, ‘marketers should use clear and prominent qualifying language that limits the claim to a specific benefit or benefits.’”  This means that the unqualified general environmental benefit claim should be placed in a proper context that appropriately limits the meaning of the term to specific environmental benefits.

Accordingly, the NAD determined that on the front of the advertiser’s package the “premium comfort made sustainably” claim was not sufficiently tied to the qualifying language detailing the specific environmental benefits. But on the back of the package, the NAD found that this same general sustainability claim was “more directly tied to the qualifying language” about the advertiser’s manufacturing process and contribution to healthy forests and that iteration of the claim was thus substantiated. Similarly, the “premium design with the environment in mind” claim made on the advertiser’s website was appropriately limited by specific claims when it was accompanied by a prominent “learn more” link directing consumers to the advertiser’s sustainability page.

Building on its decision in Butterball, the NAD also evaluated Georgia-Pacific’s aspirational claim (as seen on its sustainability page) that it plans “to plant 2 million new trees by the end of 2021.”  The NAD found that this claim was substantiated given the current projections the advertiser provided.

Everlane: What Marketers Should Pay Attention to When Relying on Third-Party Certifications

Everlane involved virgin plastic reduction, use of recycled plastic, and “safe for the environment” claims in connection with apparel products.

First, the NAD addressed Everlane’s aspirational claim, albeit one that “set[] a specific goal, conveying a message that requires substantiation”:  “No New Plastic:  There are already over 8 billion tons of plastic on our Planet—and they’re not going away. So in 2018 we set out to remove virgin plastic from our entire supply chain by 2021.”  The NAD found this qualified general environmental benefit claim substantiated largely based on the advertiser’s compliance with the Global Recycled Standards (“GRS”). Important for the NAD was that the GRS “has established stringent rules for third-party certification of chain of custody,” including third-party audit of individual orders to ensure that each item is GRS-compliant.

The NAD then considered the following claim, based on the advertiser’s work with Bluesign, a third-party certification for safety of chemicals:  “Safer For the Environment:  This product is dyed with bluesign®-approved dyes, which are safer for dyehouse workers and better for the environment.”  Generally, the NAD held, claims relying on a third-party certification—“a certification that is independent and based on scientific standards, enforced and audited by the certifier, with the origins of the seal clearly identified—reasonably convey the message that the advertiser’s practices are consistent with the certification even if consumers do not necessarily know the specific standards that certification requires.”  Here, because there was no reference to Bluesign being an independent certification, the NAD decided consumers would not understand the “safer for the environment” claim to mean that the practices were consistent with the Bluesign standards. Accordingly, the NAD recommended that Everlane explain what Bluesign certification is and what it generally entails.

Next, the NAD looked at whether the Bluesign certification—which assesses chemical safety—supported the “reasonable takeaways from Everlane’s claim that its garments are safer for the environment.”  The NAD found it did not. Specifically, the Bluesign certification relied on a cradle-to-grave life cycle analysis to measure environmental impacts of materials in five areas, only one of which was chemistry. Because Everlane’s claim did not clarify that chemistry was only one of the several factors to consider when calculating the product’s environmental impact, the broad claim was a poor fit for the narrower certification. Moreover, only a relatively small percentage of Everlane’s mills and factories were Bluesign-certified, and the “nascent incorporation” of the certification in Everlane’s clothing line was also unclear from the claim.

The Takeaways

These recent NAD decisions provide a helpful roadmap on how advertisers should approach claims that their products or business practices are sustainable. Because terms like “sustainable,” standing alone, convey a broad general environmental benefit message that is difficult (if not impossible) to substantiate, the following guidance may be helpful to ensure the claims are narrowly-tailored and defensible:

  • Avoid general environmental benefit claims as they are nearly impossible to substantiate. Broad terms, such as “sustainable,” should be used in a context where it is clearly and conspicuously tied to specific environmental benefits (e.g., plastic reduction, carbon footprint, etc.)—converting the statement into a qualified general environmental benefit claim, which is permissible (so long as substantiated).
  • Whether a claim is properly qualified will often depend on where the qualifier appears in advertising in relationship to the broad “sustainable” claim. As with other types of claims, a fine print explanation on the back of a package of specific environmental benefits may not be enough to sufficiently qualify a bold, general environmental claim plastered all over the front of the product’s packaging.
  • Aspirational environmental claims may not merely be illusory and must still be substantiated. When tied to specific environmental outcomes (e.g., plastic reduction by a certain date), the claim must be properly qualified, and the anticipated environmental outcome supported by reliable evidence. For example, an advertiser touting its plans for more sustainable business practices through reduction of carbon footprint by 2030 should be able to provide concrete plans/projections substantiating these goals.
  • Credible third-party certifications help mitigate risk when making environmental claims. When relying on suppliers, certifications that incorporate third-party audit mechanisms for suppliers and chain of custody will prove much more useful for substantiating the claims. Marketers should check, however, that the certification is a good fit for the advertising claim. For example, when a certification only supports one aspect of reduced environmental impact, it may not be used to support a very broad claim (e.g., “safer for the environment”).

The FTC has announced that it will be revising its Green Guides in 2022, and this revision may provide a more definite standard for unqualified general environmental benefit claims or even a definition of “sustainable” for advertising claims.

The quotes contained in this article are citations to the NAD case reports, available at https://bbbprograms.org/OnlineArchive.

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