Environmental claims, including those related to carbon reductions, need to be better defined and policed, stakeholders have told the Federal Trade Commission as it considers revisions to guidance long used by industry.
Environmental watchdog groups are taking aim at “climate-friendly” and more general claims about companies’ environmental track records that may not be fully supported. Most business groups and companies also are seeking clarity, though not all believe the FTC needs to make significant revisions.
The issue of environmental marketing claims is getting more attention in the courts and by oversight bodies. The Better Business Bureau’s National Advertising Division, for instance, recently recommended that meatpacker JBS stop making claims related to its goal of achieving “net zero” emissions by 2040.
The Institute for Agriculture and Trade Policy told the FTC that without “a clear regulatory framework for climate marketing claims, organizations and citizens have resorted to the courts.
“At least 20 climate-washing cases have been filed before courts in the U.S., Australia, France and the Netherlands since 2016, while a further 27 cases have been filed before nonjudicial oversight bodies (such as advertising standards boards),” IATP said in comments to the commission that emphasized the competitive advantage deceptive claims can confer.
In its Feb. 15 decision, BBB’s NAD said “while the record provides evidence of a significant preliminary investment JBS has made toward reducing emissions by 2040, it does not support the message conveyed by the claim that JBS has a plan it is implementing today to achieve net zero operational impact by 2040.”
In a statement that is part of the NAD document, JBS said it would appeal to the National Advertising Review Board. “We continue to believe that the express messaging in the challenged claims, and our entire net-zero by 2040 campaign, truthfully communicates our intent to achieve net-zero emissions by 2040.” The company's website continues to include the commitment.
FTC took note of the “proliferation of environmental benefit claims” since the guides were last revised in 2012, including claims not addressed in the guides.
“Before making a purchase, many American consumers want to know how a product contributes to climate change, or pollution, or the spread of microplastics,” FTC Chair Lina Khan said in asking for comments.
FTC Chair Lina Khan
“Businesses have noticed,” she said. “Walk down the aisle at any major store — you're likely to see packages trumpeting their low carbon footprint, their energy efficiency, or their quote-unquote ‘sustainability.’”
“For the average consumer, it's impossible to verify these claims,” Khan said. “People who want to buy green products generally have to trust what it says on the box.”
The problem is, the guides don’t clearly define what constitutes a “sustainable” practice. The FTC decided it didn’t have enough information to define the current version. Nor do the guides get into carbon marketing beyond guidance surrounding “carbon offset” claims.
“It is deceptive to misrepresent, directly or by implication, that a carbon offset represents emission reductions that have already occurred or will occur in the immediate future,” the current version says.
The Consumer Brands Association, which represents the consumer packaged goods industry, said the commission needs more input.
“The guides currently do not offer guidance related to the majority of climate change claims,” CBA said. “These claims, including ‘net zero,’ ‘carbon neutral,’ ‘low carbon,’ and ‘carbon negative,’ have become popular in recent years.”
“We encourage the FTC to conduct and solicit additional consumer perception testing to identify consumers’ interpretations of these claims, including through a dedicated workshop and additional round of comments,” CBA said.
IATP urged the FTC “to monitor and seek clarifications from the USDA on its promotion of ‘climate-smart’ food products, without a meaningful definition, standard or monitoring. Under its current use, the term ‘climate-smart’ is not serving consumers nor is it sending clear signals to the market.”
The National Milk Producers Federation, however, said the current guidance on carbon offsets is “straightforward” and any changes should “leverage relevant globally-accepted frameworks and protocols.”
NMPF also said FTC shouldn’t even try to define or offer guidance on what is or is not “sustainable.”
“As a sector with a long track record of involvement in national and international sustainability efforts, we know that there is no clear-cut definition of sustainability,” NMPF said. “Within agriculture, as an example, local weather and soil conditions vary to such an extent that the practices that contribute to ‘sustainability’ depend on that local context.”
Food & Water Watch and about five dozen other groups, including the Center for Food Safety, quoted FTC’s response to comments on the last revision that “when consumers purchase carbon offsets, they expect that they are supporting a reduction in greenhouse gas emissions.”
“In reality,” the groups said, “carbon offset schemes allow polluters to continue polluting and perpetuate environmental injustices, while evidence shows that the supposed offsets are largely ineffectual.”
On the question of “sustainable” products, the green groups said the FTC should say “It is deceptive to misrepresent, directly or by implication, that a food product or brand is sustainable.”
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In particular, they cited animal feeding operations as the types of “intensive production methods” that should not be allowed to make such claims.
Environmental claims by meat companies such as Smithfield, which recently released its latest sustainability report, received particular criticism.
The environmental groups said Smithfield’s website “does not emphasize any of its particular products or a product’s concrete attributes such as price or quality — instead it displays its tagline ‘Good food. Responsibly’ followed by environmental marketing claims: ‘We are good stewards of the environment. We do good in our communities.’”
They said the FTC “should make clear that the Green Guides extend to such claims whether they are linked to specific products or are used to greenwash a brand’s image to manipulate consumer perception and therefore drive purchasing decisions. This reality also should inform the FTC’s enforcement efforts.”
Smithfield’s sustainability report, the cover of which says, “Good is what we do,” includes a foreword from President and CEO Shane Smith saying, “From our farms and feed mills to our processing facilities and transportation network, sustainability is our responsibility as an industry leader and a strategic priority for every part of our business.”
But Tyler Lobdell, an attorney at Food & Water Watch, called the report “internally inconsistent,” pointing to its claim, for example, that the company is “on track” to reduce its notices of violation by government agencies to zero. The report, Lobdell said, notes that in 2022, it received 14 NOVs for operations at company-owned farms and facilities, the most since 2019. Fines in 2022 totaled nearly $336,000, more than five times the amount in 2021.
“At the same time, their website and their brand marketing says 'We are good for the environment, we are good neighbors,'” Lobdell said. “I just don't think that squares objectively.”
In response to questions, Smithfield spokesperson Ray Atkinson said none of the NOVs “represented material violations or resulted in any environmental impact. The majority of the fines involved a single facility that Smithfield acquired from another company, and the citations were for the condition of the facility under the prior owner. We subsequently corrected all issues to the satisfaction of EPA.”
Atkinson also said that in 21 years of issuing sustainability impact reports, “you will see we’ve noted a steady reduction in NOVs.”
The Organic Trade Association said the FTC needs to crack down on “organic” claims made for nonfood items.
“USDA has opened the door to organic certification of nonfood products such as shampoo, household cleaners and mattresses, and it allows the term ‘organic’ to be used on these same products when they are not certified,” OTA said. “This juxtaposition creates a very confusing, if not misleading, situation for shoppers.”
“In the nonfood sector, particularly in personal care, cosmetics, and textiles, it is not uncommon to find products marketed as wholly organic when, in fact, they may only contain little to no organic content,” OTA said.
Here’s a sampling of other comments:
- Nestlé: “One key development that has emerged since the FTC’s last update of the Green Guides in 2012 is the proliferation of state laws addressing environmental claims such as recyclable, compostable, biodegradable, and others. A patchwork of differing requirements at the state level not only makes it difficult for manufacturers to comply across all states, since labeling and distribution are not done on an individual state level, but also can cause consumer confusion.”
- BBB National Advertising Division: “In recent challenges, advertisers have made carbon-neutral claims or set a target date for achieving 'net zero' carbon emissions. Several issues raised by these claims are not addressed specifically in the Guides, including (1) whether there are reliable standards for measuring carbon neutrality or the elements that contribute to a reliable standard; (2) the extent to which carbon offsets can be used to achieve carbon neutrality; and (3) the stage of planning to achieve carbon neutrality that an advertiser must reach before advertising the carbon neutral target to consumers.”
- FMI-The Food Industry Association: “While we do not believe it is feasible for the FTC to create a single definition of the term “sustainable” … we believe general guidance from the FTC on this claim would be beneficial to ensure that sustainability claims are non-misleading.”
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