“Greenwashing” and the Need for Third-Party Green Certification

In an interview published in the July/August 2011 issue of Green Building & Design, designer John Cantrell of HOK Atlanta comments,

“There’s more greenwashing than ever before because everyone’s trying to innovate.  As designers, we have to be knowledgeable about the compositions of these so-called “sustainable” products because people trust our opinions.  What’s starting to surface is the importance of third-party certifications.  I believe that verification is one of the most important parts of this process, and I am always pushing for third-party certification even in selection and specification of our materials and assemblies.”

Mr. Cantrell is most certainly too generous in his assessment that the rise in greenwashing is purely the result of a drive to innovate, particularly if you accept the pejorative definition of greenwashing as, “the act of misleading consumers regarding the environmental practices of a company or the environmental benefits of a product or service.” 

Regardless, the point about the importance of third-party certification is dead on.  Consider this sign, observed in May 2011 at Riverfest in Little Rock, Arkansas:

Greenwashing?  It’s certainly a possibility, but since no one – not the state or local government, and not, to my knowledge, any private entity – is in the business of certifying and verifying these claims, they can be made at will and with little regard for accuracy or veracity. 

The problem is compounded by the fact that the proponents of false green claims do not have much to fear by way of liability.  The biggest stick against greenwashing in Arkansas is the Arkansas Deceptive Trade Practices Act, which generally prohibits false, deceptive, and unconscionable practices in business, commerce, or trade.  A green claim about a product or service, made with the intent of distinguishing the product or service from one not supported by a green claim, falls into this category.  But here’s the rub: as a private citizen, to bring a claim under the Arkansas Deceptive Trade Practices Act, you need to have suffered “actual injury.”  Generally, this means money damages, though there is good law suggesting that other types of injury – personal injury, for example – would also suffice.

Consider this hypothetical, suggested by the Riverfest ride photo: of all the rides at Riverfest, you are swayed by the green claim, part with a dollar or two, and ride the ride powered by vegetable oil.  The claim turns out to be false; the ride is diesel powered.  Have you been deceived in business, commerce or trade?  Absolutely.  Have you been actually injured?  Sure, to the tune of a dollar or two.  Are you really going to sue over that injury?  And, perhaps more importantly, are you going to be able to find a lawyer willing to take a case with almost no damages?  The choice is yours, but I suggest that your time, energy, and money are better spent elsewhere.  (There is also the possibility of a class action, but it suffers from the same problem of de minimis damages.) 

A lawsuit is simply an inefficient, and inelegant, solution to the greenwashing problem. 

This is not an improbable hypothetical.  Take a moment today – fifteen minutes is probably enough – and count the green claims you see during that time.  At the same time, count the number of those claims that also claim to be verified by an independent third party.  The gap will be obvious.  As will the solution. 

(The “third party verifications” may be false as well – but that is a subject for another day.)

(Department of Read this Cool ‘Zine: www.gbdmagazine.com)

(Department of Definitions: the quoted definition of “greenwashing,” and numerous other materials regarding greenwashing, can be found at www.sinsofgreenwashing.com)

Arkansas Legislative Update: SB 164 and The Arkansas Deceptive Trade Practices Act

My last post was based on the legal theory that greenwashing is an illegal deceptive trade practice in Arkansas. One hole in this theory is the problem of “standing.” “Standing” is lawyer-speak for the condition of being able to sue. For example, one consequence of being injured in a car accident is that your injury gives you the right to sue the person who caused the injury. If you merely read about the accident in the newspaper, you have no right – or “standing” – to sue the responsible party on behalf of your friend.


The Arkansas Deceptive Trade Practices Act expressly grants standing to the Arkansas Attorney General and to private citizens (sometimes called “private attorneys general”). The Arkansas Attorney General always has standing to sue, and can seek injunctive relief as well as the recovery of damages and civil fines. Private attorneys general, however, can sue only if they suffer “actual damage or injury” as a result of a deceptive trade practice. (Department of Legal Citation: this provision can be found at Ark. Code Ann. § 4-88-113(f)). In other words, the mere fact that you discover an act of greenwashing does not mean that you can sue to stop the practice.

It turns out some members of the Arkansas Legislature are attempting to tinker with this aspect of the ADTPA. SB 164 proposes to add the following language to the ADTPA:

Proof of reliance upon a deceptive or unconscionable trade practice is not required to obtain the relief authorized by this chapter.

At first blush, SB 164’s proposed amendment would appear to strengthen the ADTPA as a weapon for combating greenwashing. After all, if one does not need to “rely” on the greenwashing (i.e., to actually fall for the deception) to have the right to sue, prosecuting alleged greenwashers just got easier, right?

Wrong. Here’s why:

We know from a recent decision of the Arkansas Supreme Court, Baptist Health v. Murphy, that private citizens do not have the right to seek injunctive relief under the ADTPA. This means that private citizens can only recover money damages under the ADTPA. And, of course, you must suffer money damages before you can recover them.

SB 164 does nothing to change the requirement that private attorneys general – the very folks most likely to pursue greenwashers – must have suffered “actual damage or injury” before they can sue under the ADTPA. Consider: will a person who has not “relied” on the deceptive trade practice be able claim that they have been actually damaged or injured by the practice? It seems unlikely.

I suspect that SB 164 is a response to a ruling by a judge that the ADTPA required reliance. I leave the question of whether or not that is necessary and appropriate to the collective wisdom of our legislature and our Governor, who just happens to be a lawyer. But if the Arkansas Legislature wants to make the ADTPA a more useful arrow in the quiver of consumer protection, then it should consider giving private attorneys general the right to seek injunctive relief.

Is Greenwashing Illegal in Arkansas?

“Greenwashing” is “the act of misleading consumers regarding the environmental practices of a company or the environmental benefits of a product or service.”  Consider a disposable plastic water bottle which I have seen for sale at convenience stores throughout Little Rock.  The label reads something like, “This bottle contains 30% less plastic.”  Less plastic than what?  A nuclear reactor?  A glass bottle?  And, more importantly, does it contain 30% more plastic than it needs too?

This leads to the subject of this blog: is greenwashing illegal in Arkansas?

The answer, at least in some instances, is yes.

Here’s one reason why:

The Arkansas Deceptive Trade Practices Act prohibits a wide range sneaky, underhanded, and fraudulent behavior, including “knowingly making a false representation as to the characteristics, ingredients, uses, benefits, alterations, source, sponsorship, approval, or certification of goods or services or as to whether goods are original or new or of a particular standard, quality, grade, style, or model” and the use of “any deception, fraud, or false pretense” in connection with the sale or advertisement of any goods or services.

This, of course, is a fair description of greenwashing, reduced to its essence: a claim that a product or service is “green,” when, in fact it is not.

Thus, instances of greenwashing, if they are egregious enough and cause consumers monentary damage, will violate the ADTPA.  And violators should definitely beware: the Act provides for both civil and criminal liability, as well as for injunctive relief.

In future posts, I’ll examine some specific types of greenwashing, and some specific claims, against the Arkansas Deceptive Trade Practices Act, as well as some of the difficulties with seeking relief and proving a case under the ADTPA.  Stay tuned.

(Department of credit where credit is due: my definition of greenwashing is taken from one of several excellent websites hosted by environmental marketing group TerraChoice, The Sins of Greenwashing, found online at http://sinsofgreenwashing.org/.) 

(Department of citation: the sections of the ADTPA quoted above can be found at sections 4-88-107(a)(1) and 4-88-108(1) of the Arkansas Code.)

Five “Green Law” Issues to Look for in 2011

Green Leasing. Arkansas is a landlord-friendly state. Evictions are expensive due to the filing fees and because a lawyer is required, but they are also straight-forward proceedings, and the end result is generally clear: material lease violations mean eviction. Leases in green buildings, however, present new and unique issues. Consider the tenant who leases space in a LEED-certified building that is subsequently decertified, or the landlord of a LEED-certified building faced with a tenant who engages in conduct that threatens certification. In these situations, the tradition remedies of possession or money damages may not be appropriate. This means the parties, and their lawyers, will need to do some new thinking, and they will need to do it on the front end when they are drafting the lease.

LEED as the New Building Code. The City of Little Rock’s resolution that all new city buildings be LEED-certified raises interesting issues because it treats the LEED requirements as though they were building codes. But they are not. LEED standards are aspirational and were designed to codify best practices. Treating them as building codes means using them for an unanticipated purpose, likely with unanticipated consequences. What happens if a new building fails the standard? What is the mechanism of enforcement? Do we really mean to give the U.S. Green Building Council power over our local municipal buildings? Is LEED even the right standard? Why not Energy Star? What happens when the city refuses to pay a contractor who, despite best efforts, has failed to deliver a certified building? The LEED standard was not made for this type of duty. Send in the lawyers.

Green Washing and False Green Claims. Green Washing involves misrepresentations (or outright lies) regarding the “green” or “sustainable” characteristics of place, product, process, or service. Envision a granite countertop advertised as “recyclable.” All things being equal, green-conscious consumers will prefer this product over the granite countertop that is not advertised as “recyclable.” And yet, if there are no places where granite countertops can actually be recycled, then the “recyclable” claim is meaningless. Likewise, even if there are recycling opportunities for granite, if the countertop is made from virgin granite, the “recyclable” claim is misleading. These are examples of green washing, and they related directly to claims that I have seen made in 2010 in the Arkansas sustainasphere. In eight days, on December 9, 2010, the comment period for the FTC’s proposed green guidelines related to green claims will end, and the new guidelines will be final and go into effect sometime in 2011. All making green claims should take notice, and be prepared. And consider this: are those who make false green claims violating the Arkansas Deceptive Trade Practices Act?

Will LEED survive? The answer is yes, but it’s going to be an interesting journey because of a class-action lawsuit filed in federal court in New York in October, Gifford v. USGBC. The Gifford suit challenges the very essence of the LEED certification regime, contending that LEED lacks an empherical, scientific basis, does not result in buildings that are more energy efficient, and steers consumers away from energy efficiency certification programs that do achieve greater efficiency. This lawsuit has it all – allegations of fraud and wrongdoing, misrepresentations, anti-competitive and monopolistic behavior, deceptive trade practices, even criminal racketeering. It is sensational, and I predict that as the case progresses at least three things will happen. First, there will be copycat lawsuits. Second, the USGBC will make some interesting changes to the way in which is promotes and manages the LEED brand. And third, the alleged class will not be certified and the case will be dismissed before trial.

LEEDigation and the Arkansas Deceptive Trade Practices Act. To me, the allegations in the Gifford case with the greatest staying power are those that LEED constitutes a deceptive trade practice. Most states, including Arkansas, have a statute that prohibits businesses from engaging in deceptive, unlawful, and unconscionable practices in business, trade, and commerce. (For a classic example, think rolling back an odometer.) To date, there has not been much LEEDigation in Arkansas. But it is coming, and I predict it will come in 2011. Consider the energy efficiency guru who “guarantees” a certain level of LEED certification and then fails to deliver. The injured party will likely be able to swear out a complaint that the guru violated the Arkansas Deceptive Trade Practices Act. Likewise, many in the sustainable blogosphere are predicting that either (a) there is a wave of LEED-decertification coming or (b) that there are numerous buildings that should be decertified but, for a myriad of reasons, will not be. Either way, the end result is LEEDigation, and if there is actual injury a cause of action for violating the Arkansas Deceptive Trade Practices Act is a natural fit.

It Ain’t Easy Claiming Green Part II: Know the Seven Sins of Greenwashing

The public comment period for the Federal Trade Commission’s new proposed guidance for green claims ends on December 10, 2010. I expect the guidance to become final sometime in early 2011. If you are in the business of making some kind of green claim, you need to be preparing.

One way to begin preparing for the new FTC guidance is to get fluent with the “Seven Sins of Greenwashing.” The Seven Sins of Greenwashing are the product of several years of study by environmental marketing gurus Terrachoice Environmental Marketing. Starting way back in 2007, Terrachoice sent researchers into big-box stores throughout North America. The researchers wrote down every green claim on every product they encountered, along with supporting evidence and other stuff important and obvious to researchers.

Terrachoice found that there was a lot of “greenwashing” going on – that is, “the act of misleading consumers regarding the environmental practices of a company or the environmental benefits of a product or service.”

It also turns out that, once identified, greenwashing practices were easily categorized. Hence, “The Seven Sins of Greenwashing.” So, without further ado, here they are:

Sin of the Hidden Trade-Off. A claim suggesting that a product is “green” based on a narrow set of attributes without attention to other important environmental issues. Paper for example, is not necessarily environmentally-preferable just because it comes from a sustainably-harvested forest. Other important environmental issues in the paper-making process, such as greenhouse gas emissions, or chlorine use in bleaching may be equally important.

Sin of No Proof. An environmental claim that cannot be substantiated by easily accessible supporting information or by a reliable third-party certification. Common examples are facial tissues or toilet tissue products that claim various percentages of post-consumer recycled content without providing evidence.

Sin of Vagueness. A claim that is so poorly defined or broad that its real meaning is likely to be misunderstood by the consumer. “All-natural” is an example. Arsenic, uranium, mercury, and formaldehyde are all naturally occurring, and poisonous. “All natural” isn’t necessarily “green”.

Sin of Worshiping False Labels. A product that, through either words or images, gives the impression of third-party endorsement where no such endorsement exists; fake labels, in other words.

Sin of Irrelevance. An environmental claim that may be truthful but is unimportant or unhelpful for consumers seeking environmentally preferable products. “CFC-free” is a common example, since it is a frequent claim despite the fact that CFCs are banned by law.

Sin of Lesser of Two Evils. A claim that may be true within the product category, but that risks distracting the consumer from the greater environmental impacts of the category as a whole. Organic cigarettes could be an example of this Sin, as might the fuel-efficient sport utility vehicle.

Sin of Fibbing. Environmental claims that are simply false. The most common examples were products falsely claiming to be Energy Star certified or registered.

Obviously, the Sins of Greenwashing represent a marketing, and not a legal, viewpoint. But, as we will see in future posts, they represent a useful tool for navigating through the new FTC guidelines and for analyzing whether a particular claim complies with state law – for example, the Arkansas Deceptive Trade Practices Act.

More information about the greenwashing and the Sins of Greenwashing can be found here:http://sinsofgreenwashing.org/

(Department of Authorized Use: Terrachoice requests that folks seeking to use the greenwashing studies get appropriate approval from Terrachoice. Accordingly, I sought, and received, permission to use and reproduce The Sins of Greenwashing.)