InsideCounsel » April 2008
Seals of Approval
“Green” certification marks raise new liability issues.
It seemed like a terrific business opportunity. Consumers and businesses were eager to buy eco-friendly products. So in 1991, Wausau Paper Corp. launched its EcoSoft line of paper towels and tissues, made from 100 percent recycled content.
It wasn’t exactly a success story. The problem: Wausau’s green marketing was lost amidst a welter of other companies’ eco-friendly claims. The number and variety of claims confused potential customers, who weren’t sure which products were truly green. So purchasers often stopped responding to green marketing.
Wausau didn’t give up. In late 2003, it got Green Seal to certify its EcoSoft products as environmentally friendly. Green Seal, an independent nonprofit, tests a wide variety of products and services and inspects manufacturing plants to determine whether a product or service meets Green Seal’s environmental standards. If it does, the product or service can display the Green Seal certification mark.
Once Wausau put the Green Seal certification mark on its EcoSoft products, sales soared. In 2004, the market for paper towels and tissues grew 2 percent, but EcoSoft sales rose 16 percent. In 2005, sales jumped an additional 25 percent, and in 2006 sales shot up 26 percent.
Thanks to the Green Seal mark, Wausau was able to demonstrate that certain products in its line were truly green, which brought in a lot of new customers. This is part of a rapidly growing trend. More companies around the U.S.—including Westinghouse Electric, Sony, Dell, 3M, GE and Toyota—are using certification marks to prove their green credentials and boost sales. They also are finding the certification process often brings other benefits: It pushes businesses to improve their plants and business processes in ways that significantly reduce their costs.
But businesses need to be cautious when using green certification marks. The number of these marks is growing rapidly, and companies should carefully consider the costs and benefits before seeking a certification. Companies also must use certification marks carefully, or they may face liability for deceptive advertising. And this risk is increasing as the FTC and other government officials take a tougher look at companies’ green claims.
“So many [companies] want to put the word ‘green’ on their products, and there’s a host of laws saying when you can and can’t do that,” warns Peter Hsiao, an environmental law attorney in the Los Angeles office of Morrison & Foerster. “Right now this is a very vigorous issue because so many ... businesses and products are tapping into consumer demand for eco-friendly products.”
Avoiding “Greenwash”
As Wausau knows, the right green certification mark can provide a company with a powerful marketing advantage. But not all green certification marks are equal. “There’s been a huge surge [in the past two years] of marks certifying that products meet certain environmental standards,” says Richard Ruzich, an IP attorney in the Chicago office of Duane Morris.
Major green certification marks include: Energy Star (energy conservation), Green Seal (environmental standards for a variety of products), Fair Trade (economic, social and environmental criteria for agricultural products), FSC (ecologically sound forestry management and products) and LEED (eco-friendly buildings). And there are now a host of minor marks. There’s a certification mark for environmentally correct batteries, for instance, as well as a mark for eco-friendly windows and one for Chlorine-free products.
Finally, there are certification marks issued by less-scrupulous groups. These marks have nice green-sounding names, but their standards are so low, they’re virtually meaningless. These marks are just “greenwash,” Ruzich notes.
