NOVEMBER
LEGAL RAMIFICATIONS
OF GREEN MARKETING
MARKETING YOUR GREEN CONSTRUCTION
PRACTICES IN AN UNCERTAIN WORLD
MICHAEL A. NESTEROFF, LANE POWELL PC
C OLU M NS :: L AW
Legal ramifications
of green marketing
MARKETING YOUR GREEN CONSTRUCTION PRACTICES
IN AN UNCERTAIN WORLD
MICHAEL A. NESTEROFF
As clean tech and sustainability practices
continue to gain footing in the private
sector with an increasing number of
businesses, large and small, adopting
“green” practices, the construction
industry has not been left behind. In
fact, developers, builders, designers and
contractors all have been vying to establish
and enhance their green credentials for
the same reasons as businesses in other
sectors—for the good of the environment,
to save costs and foster goodwill with
customers. Any company, however, that
adopts these new practices and wants to
tell the world about it also needs to be
aware of how easily their credibility and
cost savings can be lost if they overstate
or misstate the environmental benefits,
a practice that’s become known as
“greenwashing.”
The retail sector’s strides towards
incorporating sustainability into their
businesses have received considerable
attention. For example, Wal-Mart
established their Supplier Sustainability
Assessment and Procter & Gamble created
its Supplier Environmental Sustainability
Scorecard. These programs push their
vendors and suppliers to compile data
and report on energy usage, greenhouse
gas emissions, water use, waste disposal,
purchasing guidelines and raw material
sources. This year Wal-Mart also
encouraged its 100,000 suppliers to report
their carbon footprint data to the Carbon
Disclosure Project, an independent
voluntary registry for carbon and
sustainability data.
The building sector is no different,
indeed, even as the recession has hit
developers and contractors particularly
hard, programs to certify green buildings
have proliferated. The most well known is
the U.S. Green Building Council’s Design
LEED certification, joined by others such
24 :: BUILDERnews | November 11
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as BuiltGreen, Green Point Rated and
Energy Star. The main reasons for going
the green building route are to save energy
and reduce operating costs, but a building
project’s green credentials also can be an
important selling point.
Sometimes, however, the building
or the product doesn’t live up to its green
marketing claim. This could be due to
claims that may have left out important
contradicting information or there wasn’t
valid data to support the representations or
the term used, such as “recycled,” which is
too vague to have any real meaning. That’s
when claims of greenwashing not only
can damage your hard-earned goodwill
and reputation, but also cost you money to
defend a lawsuit brought under the Federal
Trade Commission Act or one of many state
consumer protection laws that prohibit
making unfair or deceptive claims. In other
cases, a breach of contract claim might arise
from unfulfilled green representations or
warranties in the agreement.
The Federal Trade Commission
(FTC) has issued Green Guides to help
businesses avoid liability for false or
misleading environmental marketing
claims. The FTC issued a revised version
of the Green Guides last fall and requested
additional input on a number of areas.
After receiving public comment, the FTC is
now preparing a final rule.
The revised Green Guides can be
summarized in two simple principles:
(1) don’t make unqualified general
environmental benefit claims, and (2)
be careful about the use of terms like
“degradable,” “compostable,” “ozone-safe/
ozone-friendly,” “recyclable,” “made with
renewable materials/renewable energy”
and “free of/non-toxic.” The key is to be
able to substantiate your environmental
marketing claims through sufficient
evidence, both in terms of quality and
“Claims of greenwashing not only can
damage your hard-earned goodwill and
reputation, but also cost you money to
defend a lawsuit.”
quantity, based on generally accepted
scientific standards concerning the
particular product or practice.
Even though this is an attempt
by the FTC to clarify what it means to
substantiate a claim, there still could be a
wide range of interpretation and, therefore,
plenty of room for exposure. Although the
Green Guides do not have the force and
effect of law, they nevertheless represent
a benchmark for evaluating green claims
since the Green Guides have been subject
to considerable vetting through workshops
and public comment. Consequently,
a developer or contractor seeking to
capitalize on its green practices in order
to rise above the competition in a tough
economy would do well to be familiar with
the guides, the public comments and FTC’s
rationale for the revisions.
MICHAEL A.
NESTEROFF
is a Shareholder at the
Lane Powell PC law firm,
where he is a member
of the Construction
and Environmental
Litigation Practice Group
and also chair of the
Firm’s Sustainability
and Climate Change
Industry Team. He
can be reached at
206.223.6242, nesteroffm@lanepowell.com or
Twitter: @USClimateLaw, or visit our blog, the
Sustainability & Climate Change Reporter at
http://sustainabilityclimatechangereporter.com.