The law states that using a “chasing arrows symbol, a chasing arrows symbol surrounding a resin identification code, or any other symbol or statement” on a product or package to indicate that it is recyclable, “or otherwise directing the consumer to recycle the product or packaging” is deceptive or misleading, unless the product or package is considered recyclable pursuant to specific criteria to be developed by the state’s Department of Resources Recycling and Recovery.

The Department is required to publish standards on or before January 1, 2024, specifying what sorts of material types and forms are considered recyclable. Among other things, the material type and form must be collected by recycling programs for jurisdictions that collectively encompass at least 60 percent of the population of California, and they must be sorted into defined streams for recycling processes by large volume transfer or processing facilities. The standards will be updated every five years.

Fortunately, the law provides a grace period for products or packages that are manufactured up to 18 months after the Department issues its standards. A similar 18-month grace period will be available after each five-year update, provided that a product or package met the recyclability requirements under the previous version of the standards. There are also other narrow exemptions for items that are covered by other state recycling laws, such as certain kinds of batteries and beverage containers.

The new law will create challenges for marketers because it is likely that a product that could be advertised as “recyclable” under the FTC’s Green Guides will not be able to be advertised as such in California. That said, the FTC has indicated that it will initiate a review of the Green Guides in 2022. Although it’s too early to predict what will come out of that review, it wouldn’t be surprising if the Commission also updates its standards for “recyclable” claims. Stay tuned.

The FTC’s Green Guides state that advertisers should not make broad, unqualified general environmental benefit claims.” Such claims “are difficult to interpret and likely convey a wide range of meanings” beyond what an advertiser can support. Because advertisers must be able to support all reasonable interpretations of a claim – not just the one they intended – this can be a problem. Instead, advertisers “should use clear and prominent qualifying language that limits the claim to a specific benefit or benefits.”

The front of the Quilted Northern packages prominently advertised: “Premium comfort made sustainably.” Georgia-Pacific argued that other statements on the front of the package – such as “3 trees planted for every tree used” and “energy efficient manufacturing” – served to qualify the claim to specific benefits. NAD didn’t agree, in part, because while the claim appeared at the top of the package, the qualifying language appeared at the bottom, and there were a lot of other things in between.

The same “sustainability” claim appeared on the back of the package. Right below that, however, Georgia-Pacific included qualifying language. NAD noted that the claim and qualifiers “appear in the same style of font over a unified background, suggesting that the statements should be read together.” Thus, “in this context, in direct proximity and integrated with qualifying language, consumers viewing the product label are not likely to miss or ignore that the claim is tied to the specifically described benefits.”

If you’re making green claims, this case demonstrates how difficult it can be to make these types of claims in a way that withstands scrutiny. If you aren’t making green claims, congratulations on reading this far. This case is still important because it illustrates some of the boundaries of what you can do with disclosures. The more your disclosure is separated from the claim, the harder it may be for you to argue that the disclosure effectively qualifies the claim.

The decision covers a lot of ground. For today, though, we’ll focus on an issue that we previewed earlier this year – the distinction between claims about what a company has already done versus what it plans to do.

Georgia-Pacific advertises that “3 trees [are] planted for every tree used.” In support of its claim, the advertiser explained that when it produces its paper products, it sources trees from “working forests” where a tree is regrown for each tree used. In addition, it has an agreement with the Arbor Day Foundation in which the Foundation has agreed to plant two trees for every tree used during the production process. Based on this evidence and a spreadsheet showing how the company tracked how many trees were used and planted, NAD determined that the claim was substantiated.

Georgia-Pacific also advertised that it planned “to plant 2 million new trees by the end of 2021.” Aspirational claims can be tricky. Because they inherently involve things that have not yet occurred, it can be harder to substantiate them. Still – as the pending lawsuit against Coca-Cola demonstrates – that doesn’t mean that they are off-limits to a challenge. NAD noted that if an “aspirational claim includes specific, objective goals . . . it is incumbent on an advertiser to provide evidence that it is committed to its stated goal and has taken action to realistically reach it.”

In this case, the evidence Georgia-Pacific presented to support its “3 trees planted for every tree used” claim also helped to support the aspirational claim. Its tracking document showed how many trees had been used in 2021 and projections of how many more would be used. When considered in conjunction with the evidence that Georgia-Pacific planted three trees for each of those used, NAD determined that the claim was supported by a reasonable basis in evidence.

Whether you’re talking about what you’ve done, what you’re doing, or what you plan to do for the environment, it’s important to have evidence to back that up. What you need for future aspirational claims may vary, but make sure you have a reasonable plan to achieve your goal and that you can demonstrate that you’ve made some progress on that path. Simply having an aspiration is not going to be enough.

Next week, we’ll look at another type of claim addressed in the decision – claims about “sustainability.”

The complaint – which is based largely on a PETA article – alleges that the life cycle assessment tool Allbirds uses to identify the carbon footprint of its products does not assess the environmental impact beyond the manufacturing of the shoes. Because it excludes things like the impact of wool production on the environment, it understates the environmental impact. Moreover, the complaint alleges Allbirds bases its carbon footprint figures on “the most conservative assumption for each calculation,” so that it can make more aggressive claims.

The plaintiff also argues that Allbirds makes “misleading animal welfare claims,” including by advertising “happy sheep” that live the “good life.” Based on the PETA article, the plaintiff alleges that the sheep may not be quite so content.

Although the FTC’s Green Guides provide guidance on various types of environmental claims, there isn’t a lot of clarity on the types of claims mentioned in this complaint. It’s too early to predict how this case will turn out, but this case and others like it – such as the lawsuit against Coca-Cola we wrote about this summer – suggest that plaintiffs will take advantage of that lack of clarity and continue to challenge ESG initiatives.

These types of lawsuits aren’t new. As more companies have started to develop Environmental, Social, and Governance (“ESG”) goals and to make claims about their progress towards achieving those goals, we’ve seen more suits challenging the accuracy of those claims. But this lawsuit is a little different.

While most lawsuits target claims about past or present results (which, in many cases, can be proven or disproven), the current lawsuit targets many aspirational and forward-looking statements (which are inherently harder to prove or disprove).

Here are a few examples of the claims Earth Island Institute cites in their complaint:

• “Our planet matters. We act in ways to create a more sustainable and better shared future. To make a difference in people’s lives, communities and our planet by doing business the right way.”
• Coca-Cola plans to “make 100% of our packaging recyclable globally by 2025.”
• “Scaling sustainability solutions and partnering with others is a focus of ours."
• “Part of our sustainability plan is to help collect and recycle a bottle or can for every one we sell globally by 2030.”
• “We’re using our leadership to achieve positive change in the world and build a more sustainable future for our communities and our planet.”

It’s too early to tell how this case will turn out, but companies that make claims based on future ESG goals will want to pay attention. If the court allows the case to go forward, it could suggest that companies will have to take greater care when talking about future goals.