Walking the Fine Lines of Green Labeling – What You Can ...€¦ · Jay Eckhardt, Stoel Rives,...

Walking the Fine Lines of

Green Labeling – What You Can Say So You Don’t Have To Pay

Jay Eckhardt, Stoel Rives, LLP Heidi McCloskey, Textile Exchange

Moderator: Amy Roberts, OIA

#RV2011

Walking the Fine Lines of Green Labeling:

What You Can Say So You Don’t Have to Pay

Joseph (“Jay”) [email protected]

Outdoor Industry Association2011 Rendezvous, Portland, OR

October 5, 2011

The Problem

“[W]hat companies think green claims mean

and what consumers really understand

are sometimes two different things.”

-- FTC Chairman Jon Liebowitz, October 6, 2010

2

FTC Consumer Protection

Broad Regulatory Authority

• Federal Trade Commission Act*

• Authority to challenge . . .

“. . . unfair or deceptive acts or practices. . . .”

*15 U.S.C. § 45(a) 3

Broad Regulatory Authority

FTC Defines GreenwashingClaims Addressed in the Prior Green Guides*

• Compostable

• Recyclable

• Recycled Content

• Refillable

• Ozone Safe

• Source Reduction

• “Free of” and nontoxic

• Degradable (photo and biodegradable claims)

*16 C.F.R. § 260.1 et seq. 4

•

October 2010: New Green Guides

New Types of Claims• Renewable Materials• Renewable Energy• Carbon Offsets• Seals and Certifications

Claims Not Directly Addressed• Organic • “Natural”• “Sustainable”• No ban on general benefit claims

No indication when new Guides will become official – 2011. . . 2012?5

Renewable Materials (Mis)perceptions of Consumers: 30% -- “made with renewable materials” signifies additional environmental attributes

45% -- “renewable” materials means “recycled” materials

53% -- products made with renewable materials means products are “recyclable”

Key Guidance: Disclose, Clarify, Explain• The material used • How the material is sourced• Why the material is renewable• The proportion of materials that is renewable

6

Seals & Certifications

Potentially Deceptive• Unqualified seals or certifications

• Self-awarded seal implying third-party certification

• Third-party seal based solely on membership in an organization

• Seals or certifications awarded by trade associations

FTC “Endorsement Guides” also cover Seals & Certifications (16 C.F.R. § 255 et seq.)

7

Unqualified seals or certifications

FTC Priorities

Recent Enforcement; 2010-2011

3.1 Million --- Consumer Complaints Filed

130 --- Enforcement Actions

99% --- Success Rate With Prosecutions

78 --- Warnings to Retailers (“bamboo-based” fabrics)

0 --- Green Guides Enforcement Actions

1 --- Green Guides Enforcement Action in 2011

8

Greenwashing Complaints?

TOP COMPLAINTS SUBMITTED TO FTC Calendar 2009

RANK %* CATEGORY

1 21 Identity Theft2 9 Third Party and Creditor Debt Collection3 6 Internet Services4 6 Shop-at-Home and Catalog Sales5 5 Foreign Money Offers and Counterfeit Check Scams6 4 Internet Auction7 3 Credit Cards8 3 Prizes, Sweepstakes and Lotteries9 3 Advance-Fee Loans and Credit Protection/Repair10 2 Banks and Lenders11 2 Credit Bureaus, Information Furnishers and Report Users12 2 Television and Electronic Media13 2 Health Care14 2 Business Opportunities, Employment Agencies and Work-at-Home Plans15 2 Computer Equipment and Software

* Percent of total complaints received.Source: Federal Trade Commission Performance & Accountability Report, Fiscal Year 2010, available at: http://www.ftc.gov/opp/gpra/2010parreport.pdf 9

Who Else is Watching?

• State Enforcers– California, Indiana, Maine, and others

• Watchdog Groups– Greenpeace, ForestEthics, TerraChoice

• Competitors– National Advertising Division, state & federal courts

• Consumers– Mainly Californians, but others too

Many Stakeholders Can Challenge Green Marketing Claims

10

States Are In the Game

• All 50 states have consumer protection laws• Several states incorporate the Green Guides

– California– Indiana– Maine– Minnesota– Michigan– Rhode Island

• California– “Prove it” rule*– 2010 friendly demand letters regarding green claims

* Cal. Bus. Prof. Code §17580 11

•

NGOs on the Watch

• GreenPeace– “Detox Challenge” to apparel and

footwear manufacturers– Campaign against Volkswagen:

www.vwdarkside.com

• ForestEthics– Challenge to Sustainable Forestry

Initiative

• TerraChoice– Seven Sins of Greenwashing– Ecologo program

12

Head to Head Competition

• Procter & Gamble v. Seventh Generation– National Advertising Division of Better Business Bureau– Seventh Generation challenged for “hazardous chemicals” claims

• Bag Wars: Chico Bags v. Plastic Bag Makers– Federal District Court, District of South Carolina, Lanham Act*– Chico Bags challenged for claim that only 1% of plastic bags are recycled

* 15 U.S.C. §1125(a)13

Consumer Class Actions

• Fiji Water v. California Consumers– “Every drop is green” – Self-certification claim – case dismissed– “Carbon negative water” – Deception claims concerning carbon offsets

1515• SC Johnson: Windex, Pledge, Shout

– “Greenlist” self certification– California & Wisconsin consumer complaints– Undisclosed settlement– Greenlist program continues

Greenlist

14

•

Practical Advice

15

Practical Advice

16

Resources

17

Walking the Fine Lines of

Green Labeling – What You Can Say So You Don’t Have To Pay

Jay Eckhardt, Stoel Rives, LLP Heidi McCloskey, Textile Exchange

Moderator: Amy Roberts, OIA

#RV2011

Walking the Fine Lines of Green Labeling What You Can Say So You Don’t Have To Pay

Heidi McCloskey I Textile Exchange

I’m sustainable

Trust me (I do yoga)

Welcome to Sustainability…

Integrity in business is about more than just purity of intentions: it means understanding and taking all of the necessary steps to ensure that positive change is being achieved for the environment and/or communities. This involves understanding the sustainability issues being addressed, having a life-cycle approach, and taking steps to verify the truth and accuracy of all claims being made, and being transparent.

Third Party Verification Terms

• Standards:• Regulatory

• Farm – i.e. EU Regulation, NOP • Voluntary

• Fiber flow – i.e. OE 100 • Processing - i.e. GOTS, bluesign

• Certification body - i.e. Control Union, IMO

• Certificate - i.e. Transaction certificate, scope certificate.

• Label - i.e. care label, content label, company name.

• Mark

• Traceability and transparency.• Differentiation from other

‘green’ claims. • Credibility among consumers access to expanding markets.

• Marketing and PR opportunities.

• Confidence in the supply chain. • You are ‘getting what you paid

for’. • Conformance to legal standards

and protection against litigation.

Benefits of certification

RC100RC BLENDED

• water emissions • air emissions • resource productivity • OHAS • chemicals • energy use

RC BLENDEDRC100

CCS

Labeling Labeling

Chemical

Social

CCS

Enviro

Labeling

Chemical

Social

CCS

Enviro

Labeling

CCS

energy use

Labeling Labeling

Organic farm standard


Recycled input standard


CCS

RC100RC BLENDED


RC BLENDEDRC100

CCS

Labeling Labeling

Chemical

Social

CCS

Enviro

Labeling

Chemical

Social

CCS

Enviro

Labeling

CCS

energy use

Labeling Labeling





CCS

Organic farm

CCS

B2B Verification

RC100RC BLENDED


RC BLENDEDRC100

CCS

Labeling Labeling

Chemical

Social

CCS

Enviro

Labeling

Chemical

Social

CCS

Enviro

Labeling

CCS

energy use

Labeling Labeling





CCS

RC100RC BLENDED

CCS

Labeling Labeling

CCS



Content Claim

RC100RC BLENDED


RC BLENDEDRC100

CCS

Labeling Labeling

Chemical

Social

CCS

Enviro

Labeling

Chemical

Social

CCS

Enviro

Labeling

CCS

energy use

Labeling Labeling





CCS

Chemical

Social

CCS

Enviro

Labeling

Chemical

Social

CCS

Enviro

Labeling



Product Claim

RC100RC BLENDED


RC BLENDEDRC100

CCS

Labeling Labeling

Chemical

Social

CCS

Enviro

Labeling

Chemical

Social

CCS

Enviro

Labeling

CCS

Labeling Labeling





CCS

• water emissions• air emissions• resource productivity• OHAS• chemicals• energy use

RC BLENDEDRC BLENDEDRC100

energy use

LabelingLabeling

Full Production Claim

• Biobased = products composed wholly or significantly of biological ingredients – renewable plant, animal, marine or forestry materials.

• Biopreferred Program • Biobased product procurement program for Federal agencies • Voluntary labeling initiative for broad-based marketing of

biobased products.

• OE 100 and OE Blended • CCS + organic farm certification +

logo/labeling guidelines • All organically produced materials • 3rd party certification

OE Standards v3

• CCS + recycled input certification + logo/labeling guidelines

• Will apply to all recycled inputs • 3rd party certification

RC 100 and RC Blended

GRS v3

• Working group: Textile Exchange, Levis, H&M, Central Textiles, Hong Kong Non-Woven, ICEA, Control Union, and Martex

• CCS • Chemicals • Source certification and FTC definition • 3rd party certification

GRS v3

1. Choose a standard or verification method.

2. Confirm with your suppliers.

3. Use accredited certification agencies.

4. Ask for transaction certificates.

5. Verify labeling and logo use.

Essential Steps

PREVENTING ISSUES

• Know your supply chain well, including sub-contractors. • Ensure they understand what is required for various sustainability production

and standards. • Ensure that the organic fiber is grown to the standard required in the market(s)

where the final products are being sold. • Choose internationally recognized standards. • Work with reputable certifiers • Request transaction certificates with all shipments. • Use a Track and Trace System, for maximum transparency.

Goals Impact on Industry: maximizing the number of companies ‘doing the right

thing’

Communication and Education: creating and disseminating clear and useful information

Standards: have a complete and effective set of standards that are being actively used and that make a meaningful contribution to the integrity of the industry

Certification: influence certification processes to be effective and efficient

Projects: take on special projects that further our integrity mandate and that generate revenue for TE

Staff: ensure a base level of understanding of integrity for all TE staff, and develop Integrity team members to have a deep level of expertise and to grow and develop in their roles

Standards • OE 100 and OE Blended • Global Recycle Standard (GRS) • Global Organic Textile Standard (GOTS) • Content Claim Standard (CCS) • System improvements Training and Education • Guides and brochures on labeling laws, standards, and the certification process • Resource to textile companies and organizations needing support or guidance on certification issues • Presentations at industry events, and participation in other organizations initiatives. Stakeholder Engagement • Consortium on Organic Cotton Integrity • Partnering in a study to evaluate the cost and effectiveness of certification and/or a tracking service • Legislation (FTC, NOP)

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