NAD Reviews Claims made by Nest Labs for its ‘Learning Thermostat,’ Finds Advertiser Can Support Claims at Issue

New York, NY – Dec. 1, 2017 – The National Advertising Division had determined that Nest Labs, Inc., can support the claims made in a print ad that ran in the New York Times.

NAD is an investigative unit of the advertising industry’s system of self-regulation. It is administered by the Council of Better Business Bureaus.

The claims at issue included:

• “Nest Learning Thermostats have saved 7.3 billion kilowatt-hours of energy.”
• “What if everybody in America had a Nest Learning Thermostat?  We’d save enough energy to light up each house in this country for a year.  Enough to take dozens of power plants off the grid.”
• “When people save energy with the Nest Thermostat, a tiny leaf appears.  They see it and think they’re lowering their energy bills, saving a few bucks.  And they are.  But they’re also saving something bigger.”

NAD also considered whether the advertising at issue implied that Nest Learning Thermostats provide a general environmental benefit or energy-efficiency or energy-savings benefit.

NAD has long recognized that advertising claims regarding the environmental benefits of products can influence the purchasing decisions of consumers who are concerned with sustainability and environmental issues and it is important that environmental benefits are promoted in a responsible manner that does not exceed the scope of the supporting scientific evidence.

Because consumers cannot typically verify for themselves the truth of environmental claims, advertising self-regulation plays a significant role in ensuring that such claims are truthful, accurate and non-misleading.  Further, with respect to its review of the messages conveyed by environmental benefit claims, NAD seeks to harmonize its efforts with the guidance provided in the FTC Green Guides.  It is against that background that NAD reviewed Nest’s claims.

In response to NAD’s inquiry, the advertiser explained that the 7.3 billion kWh figure represented the amount of energy saved, cumulatively, by the Learning Thermostats since March 2012. To support this claim, the advertiser submitted a calculation that was based in part on empirical measurements reported in three energy savings studies.

Following its review, NAD determined that the studies offered by the advertiser were reliable and that the calculation relied upon by the advertiser provided a reasonable basis for the claim. Further, NAD found that the advertiser could support its express energy-savings claims.

After reviewing the advertiser’s environmental claims in the context of the advertising as a whole, NAD determined that the advertisement did not convey an unqualified general environmental benefit message. Finally, NAD determined that the advertisement did convey a message that the Nest Learning Thermostat provides an energy-efficient or energy-saving benefit and concluded that the message was supported.

Nest, in is advertiser’s statement, said the company “supports NAD’s mission of upholding truth and accuracy in advertising and appreciated the opportunity to participate in NAD’s self-regulatory process.”

Note: A recommendation by NAD to modify or discontinue a claim is not a finding of wrongdoing and an advertiser’s voluntary discontinuance or modification of claims should not be construed as an admission of impropriety. It is the policy of NAD not to endorse any company, product, or service. Decisions finding that advertising claims have been substantiated should not be construed as endorsements.