Reigning in Misleading Green Marketing Claims – Part I

To protect consumers from false green product claims and assist companies with establishing consistent and uniform ways to promote their products’ green attributes, a number of countries have enacted federal laws and guidelines aimed at regulating the use of green marketing terms.

The following policies and regulations from the federal governments of the U.S., Canada, and Australia serve as good examples:

Australia

The Green Marketing and Trade Practices Act of 1974 states that businesses must not mislead or deceive consumers in any way and carries serious penalties for companies that fail to meet these requirements.

The two main provisions of the law include the prohibition of 1) misleading and deceptive conduct and 2) making false or misleading representations about specific aspects of goods and services. False representations are more serious than general misleading or deceptive conduct and can carry serious penalties, including fines of up to $1.1 million (Aus).

The Australian Competition & Consumer Commission (ACCC) advises companies that wish to make environmental claims about their products and services to adhere to the following guidance:

• Be honest and truthful

• Detail the specific part of the product or process to which the claim(s) refers

• Use language that an average person can understand

• Explain the significance of the benefit(s) of the claim(s)

• Be able to substantiate the claim(s) (ACCC 2008)

The ACCC also cautions companies and advertisers not to use the terms “green,” “environmentally friendly,” or “environmentally safe,” as they are too vague and invite consumers to assign a wide range of meanings that may or may not be true (ACCC 2008).

Canada

To help harmonize how environmental labels and claims are used in Canada, the Canadian Standards Association (CSA) in 2008 adopted CAN/CSA-ISO 14021-00, Environmental labels and declarations — Self-declared environmental claims (Type II environmental labelling).

At the same time, it also developed a companion guidance document entitled CAN/CSA-ISO 14021 Essentials, which incorporates the most current, internationally accepted information and best practices on the use of environmental claims (CSA 2008). Essentials also explains relevant provisions in three Canadian federal laws that apply to products and companies making environmental claims:

Competition Act: “A federal law governing most business conduct in Canada. It contains both criminal and civil provisions aimed at preventing anti-competitive practices in the marketplace. The act contains provisions addressing false or misleading representations and deceptive marketing practices in promoting the supply or use of a product (or service) or any business interest.”

Consumer Packaging and Labelling Act: “Requires that prepackaged consumer products bear accurate and meaningful labelling information to help consumers make informed purchasing decisions. The act prohibits the making of false or misleading representations and sets out specifications for mandatory label information such as the product’s name, net quantity, and dealer identity.”

• Textile Labelling Act: “Requires that consumer textile articles bear accurate and meaningful labelling information to help consumers make informed purchasing decisions. The act prohibits the making of false or misleading representations and sets out specifications for mandatory label information such as the generic name of each fibre present and the dealer’s full name and postal address or a CA identification number” (CSA 2008).

CAN/CSA-ISO 14021 itself sets out 18 requirements for self-declared environmental claims and offers guidance and verification methodologies to ensure that claims adhere to these requirements. The requirements specify that claims shall be:

• Accurate and not misleading

• Substantiated and verified

• Relevant to that particular product and used only in an appropriate context or setting

• Presented in a manner that clearly indicates whether the claim applies to the complete product, a product component or packaging, or an element of a service

• Specific as to the environmental aspect or environmental improvement which is claimed

• Not restated using different terminology to imply multiple benefits for a single environmental change

• Clear and comprehensible to avoid misinterpretation;

• True to the final product and its relationship to any and all environmental trade-offs

• Presented in a manner that does not imply that the product is endorsed or certified by an independent third-party organization when it is not

• Not, either directly or by implication, suggest an environmental improvement that does not exist or exaggerate the environmental aspect of the product to which the claim relates

• Not be made if, despite the claims being literally true, they are likely to be misinterpreted by purchasers or are misleading through the omission of relevant facts;

• Relate only to an environmental aspect that either exists or is likely to be realized during the life of the product

• Presented in a manner that clearly indicates that the environmental claim and explanatory statement should be read together

• Specific and, if a comparative assertion of environmental superiority or improvement is made, make clear the basis for the comparison

• Presented in a manner that does not lead purchasers, potential purchasers, and/or users of the product to believe that the claims are based on a recent product or process modifications when, in fact, the claims are based on a pre-existing but previously undisclosed characteristic

• Not be made where they are based on the absence of ingredients or features which have never been associated with the product category

• Reassessed and updated as necessary to reflect changes in technology, competitive products, or other circumstances that could alter the accuracy of the claims

• Relevant to the area where the corresponding environmental impact occurs (CSA 2008)

CAN/CSA-ISO 14021 considers the terms “green,” “environmentally friendly,” and “ecological” or “eco” to be “examples of vague claims (that) should be reserved for products/services whose life cycles have been thoroughly examined and verified,” noting that “such far-reaching claims could be misleading or deceptive, as every product made is consumable and has an impact on the environment.”

The policy also admonishes manufacturers to avoid making environmental claims that are vague, non-specific, incomplete, irrelevant, and/or cannot be supported through verifiable test methods (CSA 2008).