Green Claims are Increasing — So are Liability Risks

Sometimes it’s a fine line between boasting about your packaging sustainability gains and being truthful to consumers. Knowing where that line is, and not crossing it, can keep you out of court though.

Sheila Millar, Partner at respected law firm Keller and Heckman, walked attendees through do’s and don’ts in a September 24, 2024, webinar organized by the American Institute for Packaging and the Environment (Ameripen).

Sheila Millar; Keller and Heckman

Millar leads Keller and Heckman’s consumer protection regulatory practices and brings deep experience to a range of public policy and regulatory matters, including advertising and promotions, sustainability and environmental claims, connected products, privacy, cybersecurity, and product safety. She counsels United States and international businesses on compliance questions and processes, represents them in regulatory enforcement matters, and advocates on their behalf before federal and state legislative and regulatory bodies.

Updates to FTC’s Green Guides, and advanced recycling discussions.

The hour-long event covered a lot of ground, including updates and explanations about the Federal Trade Commission’s Green Guides (which are seen as de facto national standards), and a review of claims for recyclable, refillable, renewable, recycled content, and compostable.

Related:Gutsiest Moves in Packaging Sustainability this Year

We learned about the difference between the Mobius loop recycling symbol (left) and chasing arrows symbol used for the resin identification code or RIC (right), along with recent changes.

Canva

She also walked us through some of the different state laws that muddy the situation because of inconsistent requirements. And Millar admits to “heated discussions now” about litigation challenging claims around advanced recycling and the popular established practice of mass balance.

Moderator Dan Felton, Executive Director of Ameripen, first explained and then questioned: If a company is going to make a recycled-content claim using mass balance, the actual package may not contain the amount of recycled content in the claim or may not have any recycled content. How will this pan out as advanced recycling evolves?

Millar boils it down to: Disclosures must be truthful and not misleading. “How do you properly communicate information that, at the core of what the FTC Guides say, diverts products from the waste stream in a way that [the consumer] will meaningfully understand?” she asks.

The “greenhushing” hedge.

Millar also talked about “greenhushing.” That’s when brands are less willing to tout their advances in packaging sustainability in labeling for fear of litigation — especially considering the rise of complaints and more criticisms today.

She identified six reasons why criticism and litigation of environmental claims is increasing:

1. Industry has seen limited enforcement, historically, from the FTC.

2. Many state regulations focus on claims for plastics.

3. New requirements for Environmental, Social, and Governance (ESG) reporting and other requirements add to the mix.

4. Attorneys General investigations are targeting claims.

5. The global legal landscape is becoming more complex.

6. “Greenwashing” legal challenges are on the rise.

“We want companies to be able to talk about their environmental attributes truthfully … As the rules of the game have changed, and more … regulations come out, it does become somewhat harder,” Millar said. “We do see what we call ‘greenhushing,’ where people become less and less willing to talk about their environment advances for fear of litigation. But we want to make sure that claims are truthful as well.”

Key takeaways and tips:

• Almost every business makes green claims.

• Laws are changing.

• Laws are inconsistent.

• Litigation and enforcement risks are increasing.

• Bottom line: Complete risk elimination is not possible, but good processes can help businesses reduce and manage risks while still making impactful claims that are relevant to their products.

Here is what brands can and should do, though, to mitigate their risks:

Be data driven.

Substantiate/qualify claims.

Improve your processes.

More to learn about recycling claims and labeling requirements.

This was the first webinar in a series from Ameripen designed to offer guidance and insights to address the profusion of complexity, uncertainty, and lawsuits. The next webinars are:

Session 2: “Legislative Pathways: State or Federal?” will discuss federal legislative proposals for standard definitions for nationwide use.
Tuesday, October 29, 1:00 pm ET (10 a.m. PT)
Presented by Joe Dages of Steptoe & Johnson

Session 3: “Recommendations for Applying On-Pack Claims and Labels in 2025 and Beyond” discusses popular programs such as How2Recycle and Smart Label and how they might relate to future laws.
Tuesday, November 12, 1:00 p.m. ET (10 a.m. PT)
Led by Paul Nowak, Executive Director of GreenBlue, BPI, How2Recycle, and Smart Label

Register here to attend or view past session(s) on-demand.