Brand protection: How to safeguard against green marketing pitfalls
Our first article in this two-part series covered the challenges around claims relating to "recyclable", "all-natural", and "Made in the USA".
Mollie Hughes, CEO of Softly Solutions, provided insight into some recent high-profile cases, illustrating the importance of understanding and complying with the complex web of regulations governing these claims.
In Part 2, we dive deeper into how brands can navigate these challenges by taking proactive steps to ensure their marketing claims are both accurate and defensible. Hughes discusses the importance of staying informed about relevant regulations, validating claims with solid evidence, and the role of third-party verification in bolstering credibility.
This installment also offers industry best practices for due diligence and advice on how to adapt marketing strategies to keep pace with evolving regulations, helping brands avoid costly legal battles and maintain consumer trust.
CDU: What steps can brands take to ensure their marketing claims, such as "recyclable," "all-natural," and "made in the USA," are both accurate and defensible?
MH: Navigating the complexities of green marketing claims can be a nightmare. It’s important to use modern tools to understand the many moving parts including:
- Relevant Regulations: Stay informed about the regulations specific to your industry and marketing geography. This includes knowing what is legally permissible for claims like “recyclable”, “all-natural”, and “made in USA”.
- Legal Precedents: Research any relevant litigation and case law that provides insights into how similar claims have been challenged in the past. This will help identify potential pitfalls.
- Validate and Substantiate Claims: Make sure your marketing claims are backed by solid evidence. Consider third-party certifications to boost credibility and provide additional assurance to consumers.
CDU: How important is third-party verification in substantiating marketing claims, and what role does it play in mitigating risk?
MH: Though not a requirement for making a claim, third-party verification does add validity, enhancing both legal compliance and customer trust.
However, the FTC Green Guides warns that third-party certification does not eliminate the obligation to ensure evidence to support a claim. (FTC Green Guides §260.6). The legal case of Walker v Nestle USA demonstrates that the most important factor is providing detailed substantiation and proof that your product is what you are claiming, and that it meets federal, state and local regulations.
CDU: How do regulatory bodies typically evaluate the validity of the green marketing claims, and what evidence do they require?
MH: It seems that there are new regulations in the personal care and beauty industry being released daily and it’s difficult to keep up with all of them, especially state regulations. To complicate things even more, there are multiple oversight agencies on the federal level.
- The FTC regulates Green Marketing with the Green Guides as well as general Advertising and Marketing practices.
- The SEC enforces Climate disclosure requirements.
- The FDA oversees MoCRA registration in the beauty industry.
It is important for this industry to stay up to date on all of these requirements.
Furthermore, we anticipate the FTC Green Guides to be updated soon which will add a whole new level of complexity and scrutiny for brands to manage.
Regulatory bodies evaluate the validity of marketing claims based on the specific allegation and context of each case, as their primary responsibility is consumer protection. Here are some key points to consider:
- Consumer Perspective: Always consider the average product user's viewpoint. Ask whether the claim makes sense or if it could be misleading. This approach helps identify potential issues before they arise.
- Scientific and Technical Support: Ensure that you can substantiate your claims with reliable scientific or technical evidence. This may include studies, test results, or expert opinions that validate the claim.
- Documentation: Maintain thorough documentation of all evidence supporting your claims, as regulatory bodies may request this information during evaluations.
CDU: Can you share any industry best practices for conducting due diligence on marketing claims to avoid legal issues?
MH: Here are my suggestions for conducting due diligence:
- Hold suppliers to the same high standards you uphold: Ensure that your suppliers meet the same standards you strive for in your marketing claims. This includes verifying their practices and the quality of their ingredients.
- Document everything: Keep thorough documentation of all claims, substantiation, and supplier agreements. This not only helps in verifying your claims but also provides a defense in case of legal scrutiny.
- Conduct regular audits: Regularly audit your supply chain and ingredients to ensure compliance with regulations and accuracy of claims.
- Stay informed: Use tools such as Softly to keep abreast of changing regulations and industry standards to ensure your claims remain compliant.
By implementing these best practices, brands can conduct effective due diligence on their marketing claims and significantly reduce the risk of legal issues.
CDU: How should brands adjust their marketing strategies to comply with evolving regulations?
MH: What we don’t want is for companies to resort to greenhushing, which is when a business purposely keeps quiet about their sustainability initiatives, even if they are well validated, for fear of being labeled or targeted as greenwashers.
If you’ve found yourself facing legal challenges, the best way to regain trust is by changing your practices.
CDU: What trends do you foresee in the regulation and litigation of marketing claims in the personal care and beauty industry over the next few years?
MH: Not only is the personal care and beauty industry on the radar of regulators, consumers are fighting back. Class action lawsuits having to do with misleading green marketing claims are up over 300% over the past 6 months alone.
Furthermore, more than half of all green marketing claims are considered non-compliant. Keeping up with everything having to do with green marketing is not easy, but the risk is real, the cost is high, and companies need to take it seriously.
CDU: How can brands stay ahead of potential regulatory changes and ensure their marketing practices remain compliant?
MH: One of the best ways to stay on top of regulatory changes is by using a tool such as Softly to alert you of everything you need to make compliant green claims.
Additional resources include attorneys as well as:
- Federal Trade Commission Green Guides (US)
- Green Claims Directive (EU)
- The Green Claims Code (UK)
- BBB National Programs Decisions: National Advertising Division (NAD) (US)
CDU: What advice would you give to new brands entering the personal care and beauty market to avoid the pitfalls of risky marketing claims?
MH: Don’t assume that just because you are a new brand in the market that you are immune to legal repercussions. All size companies are under scrutiny, especially in this industry.
Get off on the right foot from the beginning when making your green marketing claims by using a tool like Softly or the resources listed above.
