The ‘green wave‘ of sustainability now includes, and will increasingly include, an aspect of litigation. Why litigation and what will be litigated?

As sustainability becomes increasingly regulated, litigation is inevitable. This week we saw movement towards increased threat of litigation in two key areas; greenwashing and climate change. While I will focus on the Federal Trade Commission (FTC) move to prosecute misleading environmental claims, the week also included a ruling that states can bring litigation against utilities that emit greenhouse gas emissions.

Let’s take a look at greenwashing claims. The “green wave” has witnessed an increased number of products with green claims. In June 2009, the FTC charged Kmart Corp., Tender Corp., and Dyna-E International, Inc. with making false claims that their paper products were biodegradable. According to the FTC the products do not degrade in landfills.

In August 2009, FTC charged four companies—Jonno, Mad Mod, Pure Bamboo, and Bamboosa—for claiming to have used an “environmentally friendly” method to make biodegradable, antimicrobial clothes from 100 percent bamboo fiber. However, according to the FTC, these clothes were actually made with rayon with no resultant “green qualities.”

As of this week, Jonno, Mad Mod, Pure Bamboo, Kmart, and Tender have settled FTC complaints while the FTC charges against Dyna-E International and Bamboosa remain in litigation.

The FTC views the marketplace as chaotic with numerous vague green claims and an overwhelming flood of consumers in need of help in sorting out what is real from what is false. The FTC has prosecuted 37 companies for allegedly making false energy or environment claims since 1990. Twelve of these were prosecuted over the past decade.

These prosecutions reflect FTC’s aim to police a chaotic marketplace teeming with ambiguous labels, such as “all-natural” and “non-toxic”. But experts warn that FTC and its limited staff are overwhelmed by growth in the green-products sector, which leaves consumers increasingly vulnerable to deception.

Help on the way: Washing away the greenwash

There may be some help on the way as the FTC moves ahead to update their “Guides for the Use of Environmental Marketing Claims,” known as the “Green Guides.” The updated guides are intended to address new green claims such as “sustainability” and “carbon neutral” – which is no small task.

My strong recommendations are to ensure that sustainability performance is quantified to develop proof points prior to making any marketing claims. Not only do companies run the risk of damage to their brands but the FTC will be watching and you run the risk of litigation.

Quantitative performance is critical in crafting product claims and, at the very least, will come in handy in the event you and your company show up in a deposition.

Image via Krassy Can Do It