California-based meal delivery service Gobble Inc. made some changes to its advertising, just in time for Thanksgiving. On November 18, 2015, the National Advertising Division (NAD) of the Council of Better Business Bureau announced that Gobble agreed to discontinue certain “eco-friendly” claims made regarding its packaging materials and business.
As part of the NAD’s ongoing monitoring of advertising (and not in response to a competitor’s claims), the NAD requested Gobble provide substantiation for certain “eco-friendly” claims that appeared on Gobble’s website, including:
- “Are the packaging materials eco-friendly? Yes! We’ve selected insulated liners that are biodegradable so that you can dispose of them in your trash with minimal impact on the environment.”
- “The boxes that we use to package your kits are also 100% eco-friendly and made entirely from previously recycled materials.”
- “Thank you for helping our efforts to build a sustainable and eco-friendly business.”
In response to the NAD request, Gobble stated that it had a good faith belief that those claims were true when made, but voluntarily agreed to discontinue the claims permanently. The NAD reminded readers that voluntary discontinuance of claims should not be construed as an admission of impropriety.
Background on the NAD
Some readers may not be familiar with the NAD, which is run by the Council of Better Business Bureaus (CBBB), the national hub of locally situated Better Business Bureau organizations in the US and Canada. Companies can challenge their competitors’ ads before the NAD in a voluntary proceeding that is confidential. (There is a filing fee.) The NAD also monitors advertising and can investigate claims on its own initiative, as the NAD stated occurred in the Gobble matter. The NAD program is part of the advertising industry’s process of voluntary self-regulation. If the NAD finds that changes should be made to an advertisement, the company is not required by law to make those changes, but can appeal within the CBBB. Even if the company loses on appeal, it is still not required to make the changes, but if it does not, the CBBB can refer the matter to the Federal Trade Commission or other federal or state government regulator. Frequently, however, the company agrees to change its ads in response to the NAD proceeding, as Gobble did in this instance.
Standards for eco-friendly claims
We had previously written about the FTC’s “Green Guides” when the FTC updated them in 2012. The Green Guides provide guidance to the marketplace describing the types of environment claims the FTC may find constitute deceptive advertising in violation of Section 5 of the Federal Trade Commission Act. The “Green Guides” cover a wide array of topics ranging from general environmental benefit claims, to carbon offsets, to degradable claims, to renewable energy claims.
Relevant to the claims previously made by Gobble, with respect to the term “eco-friendly,” the FTC recommended the marketer take several steps in order to avoid a deceptive environmental claim:
A claim, such as “Eco-friendly: made with recycled materials,” would not be deceptive if: (1) the statement “made with recycled materials” is clear and prominent; (2) the marketer can substantiate that the entire product or package, excluding minor, incidental components, is made from recycled material; (3) making the product with recycled materials makes the product more environmentally beneficial overall; and (4) the advertisement’s context does not imply other deceptive claims.
The FTC also provided guidance on substantiating environmental marketing claims:
[A] reasonable basis often requires competent and reliable scientific evidence. Such evidence consists of tests, analyses, research, or studies that have been conducted and evaluated in an objective manner by qualified persons and are generally accepted in the profession to yield accurate and reliable results. Such evidence should be sufficient in quality and quantity based on standards generally accepted in the relevant scientific fields, when considered in light of the entire body of relevant and reliable scientific evidence, to substantiate that each of the marketing claims is true.
This matter serves as a reminder of the high level of substantiation the FTC expects with respect to eco-friendly claims.