Legal Developments Ross D. Petty Editor Babson College Review of Legal Standards for Environmental Marketing Claims Jason W. Gray-Lee, Debra L. Scammon, and Robert N. Mayer, University of Utah B rands increasingly are being positioned to appeal to the environmental concerns of current and potential customers. The percentage of new products making "green promises" increased from 1.1% in 1986 to 12.6% in 1991 (Environmental Protection Agency 1993) and 12.8% for the first half of 1993 (Green MarketAlert 1993c). Recent national audits of environmental claims on package labels have identified several interesting trends (Mayer, Scammon, and Gray-Lee 1994). Some shaving cream brands claim "Contains No CFCs"-though CFCs have been banned since 1978 (EPA 1993). Some laundry deter- gent brands are making multiple environmental claims, such as that the detergent is "biodegradable" and "re- quires less energy to produce and deliver" and the package and scoop are "made from recycled content" and "reduce solid waste." Some brands recently have changed claims in response to public attention. Eveready batteries once claimed "Respect For The Environment" and "Mercury and Cadmium Free" but now read "No Added Mercury and Cadmium." Disposable diapers and plastic trash bags no longer claim degradability. Environmental claims like these receive special scrutiny from regulators and consumer and environmental interest groups because they have unique characteristics that make them especially likely to confuse or mislead consumers (Gray-Lee, Scammon, and Mayer 1993). First, many envi- ronmental claims are credence claims. For example, how would a consumer verify that a brand's packaging actually contains recycled content? Environmental claims may refer to aspects of the brand only indirectly associated with prod- uct use, such as production and shipping methods that may be less environmentally harmful than other methods. Sec- ond, sellers often do not have complete control over the ben- efits they would like to claim. Materials may be recyclable in some but not all communities, and even in those commu- nities where they are recyclable, the seller must depend on consumer and community recycling efforts to divert the brand from the waste stream to realize the claimed benefit. Finally, consumers may misperceive brand benefits because terms commonly used in environmental claims are either overly familiar or complex. How much and what type of ben- efit is present in a product with a claim using an overly fa- miliar term like "Environmentally Friendly"? Consumers may be confused by, ignore, or make assumptions regard- ing the credibility of claims that use scientific terms like "photodegradable." In the following discussion, we review legal actions taken against marketers making allegedly false environmental claims and important and relevant state reg- ulations, compare these with the Federal Trade Commis- sion (FTC) Guides for the Use of Environmental Marketing Claims (FTC 1992), and conclude with an analysis of these actions and implications for future regulatory policy. Impli- cations for marketers are suggested when appropriate. Case-by-Case Legal Actions Recognizing the potential for consumer deception in environ- mental claims, industry groups and local, state, and federal agencies have been especially active in bringing suits against some of the more blatantly deceptive environmental claims-for example, the National Advertising Division of the Better Business Bureau (NAD), the New York City De- partment of Consumer Affairs (NYCDCA), the Task Force of State Attorneys General (TFSAG), and the FTC (EPA 1993). Between late 1990 and June 1992, these groups brought 48 cases against marketers making environmental claims. Since then and during the first ten months of 1993, the FTC alone has issued an additional 16 consent orders ob- taining marketers' agreements to cease making allegedly de- ceptive environmental claims. Legal actions have involved general claims, such as "environmentally friendly"; the ef- fect of a brand on the solid waste system, such as "degrada- bility" and "recyclability,"; and the impact of a brand on the atmosphere, such as "contains no CFCs.' , General Claims General claims pose a problem because they are so vague that they either are meaningless or imply the virtually unsub- stantiatable assertion that a brand presents no harm to the en- vironment. General claims that have been criticized include Chemlawn's "safe" pesticides (New York Attorney Gen- eral), Redmond Products, Inc.'s "environmental formula" Aussie aerosol hair spray (FTC), Rockline, Inc.'s and A.V. Olsson Trading Company's "environmentally friendly" cof- fee filters (NAD), Revlon's "environmentally safe" hair sprays (NYCDCA), and Nationwide Industries' "environ- mentally friendly" aerosol tire inflator (FTC). The FTC ar- gued that Redmond Products' general claim, though based on the brand's use of a non-ozone depleting aerosol, falsely implied the absence of any ingredient in the brand that might harm the environment, when in fact the brand con- tained VOCs, which contribute to ground level smog (FTC 1993b). Mobil Oil and First Brands both consented to the FTC request that they refrain from making general claims like "safe for the environment" or "environmentally Vol. 13 (1) Spring 1994, 155-167 Journal of Public Policy & Marketing 155