How does one avoid getting sued for making "green" product claims? Use the internet.
That's one piece of advice from Jason Kravitz, a partner at law firm Nixon Peabody, who spoke at Greentech Media's Greening the Supply Chain conference in Boston earlier this month.
"Think long and hard before you put green claims on your packaging," said Kravitz, who laid out the legal landscape for dealing with so-called "greenwashing" and what companies can do to avoid being slapped with that label.
"If you are somewhere in the grey area, you can put [green claims] on your website – those can be changed quickly without much problem."
From bricks to lipsticks, manufacturers are developing and marketing goods that are supposed to require less energy to produce, be gentle on the environment after disposal and be good for your health. Industry giants such as PepsiCo and Chevron are sending executives to conferences to tout their love of renewable energy and efforts to reduce emissions.
Investors are eager to pump money into startup green product developers. Serious Materials, a maker of windows that supposedly provide better insulation than regular walls, recently raised $60 million.
Walmart's plan to create eco labels for its products – and require its suppliers to track and report their emissions – could intensify the debate over how to separate real claims from false ones.
Already, the Federal Trade Commission is making some attempts to referee8 this issue. Earlier this year, the FTC filed complaints against K-Mart, Tender Corp. and Dyna-E and said the companies' biodegradable paper products really aren't that at all.
K-Mart made that claim with its American Fare brand of paper plates. Tender's product was its Fresh Bath moist wipes, and Dyna-E's was a line of compressed dry towels.
Kravitz represented Cambria Heights, N.Y.-based Dyna-E, which initially wanted to fight the FTC. K-Mart and Tender both settled quickly and agreed to modify their claims and explain what part of the product was biodegradable.
In a statement about the three cases, the FTC said that "with the recent growth in "green" advertising and product lines, the agency will continue its efforts to ensure that environmental marketing is truthful, substantiated, and not confusing to consumers."
The issue, Kravitz said, is the vague definition for "biodegradable." According to the FTC, the term can be used only if companies "have scientific evidence that their product will completely decompose within a reasonably short period of time under customary methods of disposal."
Since the paper products by the three companies unusually end up in landfills, incinerators or recycling centers, they aren't likely to "biodegrade within a reasonably short time," the FTC said.
Kravitz, of course, sees a big problem with that line of reasoning. Many landfills, by design, create an anaerobic environment, so even food scraps wouldn't decompose quickly, he said.
"You have to ask if an apple is biodegradable under the FTC definition," Kravitz said. "My strategy was to ask for a five-year stay [on the FTC complaint] and track an apple. My client said that was very clever but how would that help him?"
Dyna-E finally decided to settle and agreed to the FTC's requirements to provide scientific evidence to substantiate its claims and submit compliance reports to the FTC.
The FTC has developed a green guide that aims to help companies craft their environmental claims. It's been around since 2002 and was updated in 1996 and 1998.
The FTC is now considering changes to the green guide. It began reviewing the guide in 2007 and held a public workshop last year.
Kravitz said the FTC lacks the resources to fully enforce its rules, partly because it's not a priority. That could change within a year, he added.