As green marketing proliferates, so does the risk of greenwashing allegations - from consumer class actions, state and federal regulators, competitors, and even investors. On top of that, new legislation is constantly changing the compliance landscape, leaving retailers to navigate a maze of new and often vague rules and regulations.
Anticipated Updates to The Green Guides The Federal Trade Commission's "Guides to the Use of Environmental Marketing Claims" (16 C.F.R. § 620) are the most frequently cited authority on the best practices a company should when touting their environmental efforts.1 The "Green Guides", as they are commonly known, are intended to help marketers avoid making environmental marketing claims that are unfair or deceptive under Section 5 of the FTC Act, 15 U.S.C. § 45. Generally speaking, they address a central theme – a representation or omission about a "green" product, product component, or retailer's practices is "deceptive if it is likely to mislead consumers acting reasonably under the circumstances and is material to consumers' decisions." (See here for more information.)
While they are not legally binding, the Green Guides are regularly cited by courts, state and federal regulators when bringing enforcement actions, arbitral bodies, and plaintiffs bringing consumer class action lawsuits when determining how reasonable consumers may interpret challenged claims. Additionally, several states--including California, Maine, Rhode Island, and New York--have explicitly adopted significant portions (or all) of the Green Guides into state law.2 Although some states incorporate the idea that the Green Guides are a "safe harbor" or a defense to a claim that a state environmental marketing law may be violated, in practice those provisions may be of limited utility. This is because compliance with the Green Guides is, in some cases, a question of fact that Courts are reluctant to address at early stages in litigation.
Steptoe's Retail & E-Commerce Practice outlines the most important guidelines and prominent litigation trends, and shares some tips for how retailers can reduce the risk of seeing red from trying to sell green, in the attached Need to Know Guide.
Footnotes
2 Some states have enacted stricter requirements relating to environmental issues. California, for example, has multiple green advertising laws, including a longstanding prohibition on "any untruthful, deceptive, or misleading environmental marketing claim, whether explicit or implied," and requires advertisers to maintain records supporting all green claims. Cal. Bus. & Prof. Code § 17580.5(a). The same statute incorporates compliance with the Green Guides as a safe harbor
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