As we all begin to bundle up for a chilly holiday season, I can’t help but reminisce about and pine for the warm Florida weather last month at the ANA Masters of Advertising Law Conference. I am also continuing to reflect on the lively panels and discussions at ANA.
One discussion that I keep thinking back on was a panel, which featured Better Business Bureau’s National Programs Executive Vice President Mary Engle, on today’s top five sustainability marketing trends. The panel kicked off by highlighting recent updates in the sustainability marketing arena, including discussion of the ongoing review of the FTC’s Green Guides and recent enforcement action by state and federal regulators as well as lawsuits brought by private plaintiffs.
So, without further ado. Here are the five trends highlighted at this event.
Trend No. 1: Multiple Sources of Risk
Advertisers need to be on special alert when it comes to sustainability marketing claims. There has been a recent focus in this space from the FTC, NAD, State Attorneys General, international regulators and NGOs, as well as class actions. The FTC recently filed another complaint against a company that advertised its products as made from bamboo when they were in fact made of an entirely different substance. NAD has also repeatedly reiterated that environmental claims should be truthful and not be overstated. State Attorney Generals have also indicated enforcement interest in this area. One state AG filed a complaint against a company for marketing its products as recyclable when there were no facilities in the state that would recycle the product. Regulators around the world are also taking a closer look at broad aspirational claims related to a company’s environmental impact. And of course, NGOs like Truth in Advertising (TINA) remain vigilant in investigating companies making environmental claims.
Trend No. 2: Aspirational Claims
- What are they? As one of our previous blog posts explained, aspirational claims are statements about what a company intends to do, most commonly used for environmental, social and corporate governance (ESG) issues.
- What to watch out for? The line on where aspirational claims cross over into deceptive and misleading territory remains unclear. NAD has found that companies can make sustainability claims as long as they have a reasonable basis for those claims. However, NAD has been careful to explain that aspirational claims with a fixed date, such as committing to achieve “net zero by 2050,” are misleading if the company has not developed fleshed-out plans or taken any concrete steps to achieve that goal.
- Practical tips: Ms. Engle emphasized that the level of substantiation required to support an aspirational claim should be proportional to how significant the aspirational goals are. Another important one: Avoid claims with specific dates if achieving goals by those dates is not realistic.
Trend No. 3: Carbon Claims
- Scrutiny over carbon claims seems to be increasing dramatically. New California legislation is requiring more disclosures for companies marketing or selling carbon offsets. California has also seen a proliferation of class action suits against major companies in this space. Although the law is supposed to take effect on January 1, 2024, the bill’s sponsor recently wrote a letter to the Chief Clerk of the Assembly, alerting her that the new compliance date would be pushed to January 1, 2025.
- Practical tips: Don’t rely blindly on third-party certification – you need rigorous substantiation of your own. Be careful of phrases like “carbon-neutral” and “net-zero” because there are no uniform definitions of these phrases.
Trend No. 4: Seals and Certifications
These claims are an area of interest for regulators lately, especially in light of the fact that the FTC Green Guides and Endorsement Guides reference these types of certifications. The FTC’s proposed rule on fake reviews highlighted previous cases in which companies created their own certifications, dubbed “selfie seals” by the FTC, and failed to disclose this information to consumers. NAD has also made it clear that these certifications should only be awarded when a company goes above and beyond a prevailing industry practice.
- Practical tips: Have your own substantiation for your claims when you are relying on a third-party certification. Ms. Engle noted that these certifications require additional scrutiny because they provide an extra element of validity to the consumer.
Trend No. 5: Packaging Claims
It may be time to closely reconsider recycling claims, especially in California. A recently passed California law will make it very difficult to make recycling claims. The FTC has also demonstrated interest in recycling claims when it hosted a recyclability workshop and could eventually be updating its guidance on such claims. Some courts, however, remain unbothered by the fact that items are marketed as recyclable even when there is no actual location where the items can be recycled.