Greenwashing enforcement ramping up in the US

Dianne Saxe

15 years ago

Consumer interest in conserving energy and protecting the environment is leading to a surge in environmental marketing. Many of these “green” claims are confusing, and some are frankly fraudulent. There has been relatively little enforcement of greenwashing claims in Canada, but other countries are getting more serious about it. For example, the US Federal Trade Commission has responded to the “virtual tsunami of environmental marketing” by updating its Rules for consumer disclosure, and by prosecuting misleading green claims, false energy savings claims, and bogus gas-saving devices.

In June, for example, the FTC launched three new enforcement actions, alleging that K-mart, Tender Corp. and Dyna-E International falsely claimed that their products were biodegradable. (Similar claims are commonly made in Canada). According to the FTC, none of the defendants could prove that their products would actually decompose into elements found in nature within a reasonably short period of time after customary disposal. That is because most solid waste is disposed of in landfills, incinerators, and recycling facilities, none of which allow the “biodegradable” products to completely break down and return to nature within a reasonably short period of time. (Same in Canada.) K-mart and Tender settled the Commission’s charges; Dyna-E is in administrative litigation.[1]

Other FTC cases have targeted “green” advertising claims, such as claims that a product or its packaging is recyclable, non-toxic, or ozone safe. The Commission also recently targeted marketers of home insulation for overstating the insulating properties of their products. The defendants agreed to pay a $155,000 civil penalty, revise the challenged claims, and substantiate any future energy-related efficacy claims. Four new cases were launched in August.

According to the FTC, companies must compete on the basis of legitimate advertising claims and consumers must be able to rely on those claims. The Commission, therefore, will continue its efforts to ensure the truthfulness and accuracy of environmental marketing. For more details, see “It’s Too Easy Being Green: Defining Fair Green Marketing Principles”, June 9, 2006. Other countries are also taking enforcement action against greenwashing, including the Netherlands and the UK Advertising Standards Authority.

However, allegations of “greenwashing” may be confusing or unclear without necessarily being illegal. Opinions differ on, for example, the illustrations on Greenpeace’s website: http://stopgreenwash.org. Please take a look and let us know what you think.

[1] K-mart Corp., File No. 082-3186 (June 9, 2009) (accepted for public comment);Tender Corp., File No. 082-3188 (June 9, 2009) (accepted for public comment);Dyna-E Int’l, et al., Docket No. 9336 (June 9, 2009).