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 ® 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.