Call to Action: Improve Green Marketing and Avoid Greenwashing

Apr 22, 2021, 09:00 AM by Eric Unis, Attorney, National Advertising Division

April 22 may be Earth Day but, for many brands, marketing the environmental benefits of their products is a year-round activity. A growing number of consumers use their purchasing power on products made in more environmentally friendly and sustainable ways. In a recent Forbes article on corporate responsibility of environmental, social, and governance (ESG) claims, BBB National Programs President and CEO Eric D. Reicin cited a 2020 Capgemini report that noted “about 79% of consumers are changing their purchase preferences based on social responsibility, inclusiveness, or environmental impact.” 

Green marketing can be a strong marketing tool for companies to differentiate their sustainable approach to business and help consumers choose more sustainable products. But with the variety and volume of green marketing today, does it? Are environmental claims supported so that consumers can make choices that help the planet? 

While some observers call for more rigorous standards, governmental guidelines regulating environmental marketing already exist. Industry self-regulation also plays an important role in leveling the playing field on green marketing so that consumer purchases align with their environmental goals.

 

What Is Greenwashing?

Misleading environmental claims in advertising are perceived to be so prevalent and impactful that they have their own name. Greenwashing is when companies provide irrelevant, exaggerated, or false information regarding a product’s environmental benefits. These misleading claims are difficult to distinguish from accurate claims. Often consumers cannot evaluate environmental claims on their own while looking at an ad or a product on a physical or virtual store shelf. While many companies act in good faith, others may exploit consumers’ sincere concerns about the environment. 

Among the consequences of pervasive and unaddressed greenwashing are confusion and even skepticism on the part of consumers who may have little faith in environmental claims and become discouraged in the belief that their choices matter. Greenwashing therefore threatens the progress of real improvements to sustainability and efforts to lessen humanity’s impact on the environment.

In a recent sweep of 500 websites, the International Consumer Protection Enforcement Network (ICPEN) found that 40% of green claims made online could be misleading consumers. A Canadian environmental marketing agency created a framework for identifying the many forms of troublesome environmental claims called the Seven Sins of Greenwashing, including such practices as patently false claims, truthful claims that hide the trade-offs in environmental choices, or broad claims supported by narrow environmental benefits. 

Companies genuinely wish to proudly communicate to consumers the environmental benefits associated with their products. But advertising may nevertheless reasonably convey to consumers that those benefits are greater than they are. In the U.S., guidance from the Federal Trade Commission (FTC) can help companies avoid pitfalls in their green marketing. 

 

 

The FTC Green Guides

Concerns about greenwashing are not a new phenomenon. The FTC first published its “Green Guides” in 1992. The Green Guides, last updated in 2012, explain standards for truth in green advertising, consistent with the FTC’s power to police deceptive practices in advertising. 

Pointing to research conducted for the Green Guides, former FTC Chairwoman Edith Ramirez stated that the FTC found that “consumers hear general assertions about a product’s eco-friendliness as statements that an item has no negative impact on the environment…We also found that if a certification or seal of approval used in an ad does not convey the basis for the recognition, either through the name or some other means, consumers will believe that the product offers a general environmental benefit.” 

Under the Green Guides, it is deceptive to misrepresent that a product offers a general environmental benefit. Unqualified general environmental benefit claims are difficult to interpret and likely convey a broad range of meanings to consumers. As with any form of advertising claim, advertisers are responsible for substantiating all reasonable interpretations of their environmental claims. 

While the Green Guides do address some specific greenwashing concerns, for instance the use of carbon offsets, the Green Guides do not set standards for the use of many common terms like “natural” and “sustainable.” Companies must therefore be especially mindful of consumers’ evolving understanding of these terms and how they are used in context. 

For example, if “sustainable” is used to describe a product, would a reasonable consumer interpret that to mean that manufacturing the product has no negative impact on the environment? If so, the marketer must be able to substantiate that impression – a likely impossible task. The Green Guides note that “depending on context, ‘sustainable’ may convey a wide range of meanings.” The preferable alternative is to effectively narrow the claim by specifying the particular benefit.

 

The Role of Self-Regulation

Government enforcement efforts cannot easily keep up with the amount of dubious or questionable environmental claims or the many forms of nuanced and evolving green marketing. Enter independent advertising self-regulation and BBB National Programs’ National Advertising Division.

Advertising self-regulation plays an important role in ensuring the truth and accuracy of claims consumers cannot evaluate themselves, including environmental claims. The National Advertising Division was established in 1971, the year after the first Earth Day, to review national advertising for the truth and accuracy of its claims. Often when taking up cases about environmental claims, whether it’s a challenge brought by a company or the advertising in question was discovered through regular monitoring of the marketplace, the National Advertising Division cites principles found in the FTC Green Guides and applies that guidance on a range of issues. 

By bringing challenges to NAD when they see misleading or overly broad environmental claims that threaten consumer trust, competitor companies can push each other toward the best practices in environmental marketing set forth in FTC guidance. If an advertiser does not agree with NAD’s case decision, they can appeal to BBB National Programs’ appellate body, the National Advertising Review Board

Below are just a few example cases in which competitors used the National Advertising Division (NAD) forum to promote truthful and non-misleading environmental advertising:

  • Baby food containers. NAD considered the advertiser’s unqualified claim that its glass containers are “the ultimate in sustainability.” The advertiser presented evidence that glass has a lower carbon footprint on average than comparable-sized PET plastic containers. NAD determined that although this benefit was real, it related to only one factor of “sustainability” (carbon footprint), and conveyed a message that glass baby food jars provide far-reaching environmental benefits over competing types of packaging. As a result, NAD concluded that the sustainability carbon footprint evidence was not a good fit to support the broad message conveyed. 
  • Laundry detergent. NAD found that consumers viewing the advertiser’s claims on product packaging that the detergent is “plant-based” and imagery on the bottle could reasonably take away the unsupported message that the product is 100% “plant-based.” NAD recommended that when the term “plant-based” is used, the advertiser clearly and conspicuously disclose the limitations of the claim--that the product is in fact 75% plant-based--and avoid the implication that the product is 100% plant-based or that the detergent’s “powerful cleaning power” is derived solely from plant-based ingredients.
  • Reusable bottles. More and more companies are designing product packaging to eliminate the need for single-use plastic by replacing some of the items traditionally sold in disposable plastic bottles with reusable bottles and dry replacement tablets. While NAD agreed that consumers were not misled when buying “forever” bottles because the bottles can be used over and over again, and broken bottles were replaced free of charge, NAD recommended that the advertiser modify the claim “better for your home and our planet” to clearly indicate the specific environmental benefits of its packaging. NAD also recommended that the claim “bad for germs, good for earth” be modified to identity the specific ways in which products and packaging are “good for the earth.”
  • Cookware. Nonstick pans with ceramic coatings were advertised as “Eco Friendly.” The pans were also advertised as not having any potentially dangerous chemicals and being “completely PTFE-free.” While it was accurate to claim that the products did not contain PTFE, NAD determined this single attribute was not sufficient to support the broad claim that they were “Eco Friendly” or that they were an overall better environmental choice than competing products.

 

One of the many takeaways from these cases is that the better practice is often to avoid “generalized” environmental claims and images that might overstate the environmental benefits of a product and instead clearly communicate which of the product’s specific key attributes provide which specific environmental benefit. 

Companies seeking to reduce their impact on the environment by adopting sustainable business practices should tailor their advertising to explain the environmental benefits those practices provide. Real improvement to corporate sustainability will be accelerated when there is a collective commitment to truthfully advertising environmental benefits.

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