Need Help Talking To Dad About Milk?

The UK’s Advertising Standards Authority (ASA) recently investigated advertising by Oatly for advertisements that allegedly overstated the environmental benefits of the popular oat-based beverage. Here’s an example:

The first TV ad, seen on January 16 2021, featured a man sneaking into his home and putting a bottle of milk in the fridge. He was interrupted by his son who said, “What have we here? Cow’s milk? Really?” Large, on-screen text stated “NEED HELP TALKING TO DAD ABOUT MILK?”. Smaller text at the bottom of the screen stated “Oatly generates 73% less CO2e vs. milk, calculated from grower to grocer. To verify see www.oatly.com/helpdad”.

The ASA found the “Need Help Talking to Dad About Milk” ad to be misleading not because the life cycle assessment conducted to support the claims was not sufficiently robust to support a benefit. Rather, the substantiation was limited to Oatly’s Barista Edition but the ad and the disclosure could reasonably be understood to apply to all Oatly products. Because of this gap, the ASA found the ads misleading.

What’s the takeaway? The ASA’s decision, which also covers four other ads, is worth a read by any food company considering how to substantiate environmental claims. There are valuable insights from a technical perspective, including detailed discussion of life cycle analyses for Oatly’s product as well as the dairy, meat, and transportation industries.

There is also a focus on less complex but equally important features for food marketers – such as the consumer understanding of what is included in references to the “meat industry” or the “dairy industry”. Because consumers could interpret “dairy and meat” more narrowly than how Oatly did, the ASA found the claim "Today, more than 25% of the world's greenhouse gases are generated by the food industry, and meat and dairy account for more than half of that" to be misleading.

Stepping back, the biggest issue with Oatly’s advertising wasn’t that the company didn’t have robust substantiation for some claims. It appears that they did. The claims reasonably conveyed didn’t match the limitations and definitions in their substantiation, though, and this wasn’t made clear to consumers.

Last week, New York lawmakers announced a bill aimed at imposing sustainability reporting requirements on the fashion industry. If passed, the Fashion Sustainability and Social Accountability Act would generally require major fashion retailers to map their supply chains, make various disclosures on their websites, and commit to reducing their environmental impact.

The law would broadly apply to fashion retail sellers and manufacturers with more than $100 million in gross revenue that do business in New York. These companies would have to use good faith efforts to map a minimum of 50% of their suppliers by volume across all tiers of production, from raw material to final production. Based on this exercise, companies would have to disclose certain information on their websites, including:

• A supply chain mapping and disclosure, with information about the company’s suppliers.
• An impact and due diligence disclosure, including a social and environmental sustainability report, with information on due diligence policies and activities conducted to identify, prevent, and mitigate potential adverse impacts, including the findings and outcomes of those activities.
• An impact disclosure on prioritized adverse environmental and social impacts within 18 months after enactment of those policies, including information on greenhouse gas emissions, volume of materials produced, recycling efforts, median wages of workers of prioritized suppliers, and the company’s approach for incentivizing supplier performance on workers’ rights.
• A disclosure about what targets the company has for impact reductions and for tracking due diligence implementation and results, including estimated timelines and benchmarks for improvement.

Although activists (and even some members of the fashion industry) have expressed support for the bill, there is no doubt that companies will be required to devote a lot of time, money, and effort into compliance, and that they will be required to disclose information (such as supplier lists) that they may otherwise consider to be confidential.

We are monitoring developments in this legislation and will post on major developments here.

Last week, Jessica Rich wrote about the FTC’s rulemaking plans for 2022. Make sure you read that post for a detailed analysis of what the Commission is planning. As we looked at which of those topics have generated the most interest on Ad Law Access recently, we wanted to point you to where you can find additional information.

• The FTC will review its Guides Against Deceptive Pricing and its Guide Concerning Use of the Word “Free” and Similar Representations. Although most of the activity in these areas has taken place at the state level, it will be interesting to see what the FTC adds to the ongoing conversation. (Click here for more coverage on pricing claims.)
• The FTC will review its Guides for the Use of Environmental Marketing Claims. A lot has changed since the Guides were last updated in 2012 and, as we’ve noted before, the lack of clarity in certain areas is leading to an increase in lawsuits and other challenges. (Click here for more coverage on green marketing.)
• The FTC is still analyzing and reviewing the public comments it has received as part of its review of the Children’s Online Privacy Protection Rule (or “COPPA”). That hasn’t stopped the FTC and other regulators for brining enforcement actions, though. (Click here for more coverage on children’s privacy.)
• The FTC is still analyzing and reviewing the public comments it has received as part of its review of the Endorsement Guides. As we’ve noted, this has been a hot topic, and the FTC recently sent out 700 warning letters, which could signal upcoming enforcement. (Click here for more coverage on endorsement issues.)

We’ll keep you posted, as these develop. In the meantime, rest up over the holidays because 2022 could be a bumpy year.

Everlane advertised some of its apparel as “Safer For The Environment: This product is dyed with bluesign®-approved dyes, which are safer for dyehouse workers and better for the environment.” Bluesign is a third-party certification that assesses chemical safety standards in the textile industry and evaluates their impact on human health and the environment. Product certification requires auditing and verification that the manufacturing process complies with Bluesign’s rules and chemical safety standards at each step of the supply chain. Everlane relied on its bluesign certification where 12% of its mills and 10% of its factories are bluesign-certified and noted its goal of fully adopting Bluesign certification by 2025.

When reviewing this claim, NAD considered the reference to the Bluesign third-party certification as a qualification for the general environmental benefit claim. NAD determined that while the Everlane claim is qualified as it pertains to why the product is safer (use of bluesign®-approved dyes), there was no immediate reference to Bluesign as an independent certification on the specific product page where the “safer for the environment” claim appears. We interpret that to mean that NAD thought referencing the certification was similar to a general environmental benefit claim without explaining more about the certification. Thus, NAD recommended that Everlane explain that Bluesign is an independent third-party certification designed to remove harmful chemicals from the environment.

NAD also evaluated whether or not the certification provides a reasonable basis for the claim. While NAD found Bluesign to be a reliable and effective third-party certification body for assessing chemical safety, it noted that Bluesign assesses only one out of five areas in which a material’s environmental impact is typically assessed. For example, a widely recognized material assessment tool in the fashion industry, the Higg Material Sustainability Index (“MSI”), evaluates the environmental impacts of a material in five areas, and chemical composition is just one of those areas. In addition, NAD concluded that consumers may not recognize the nascent state of Everlane’s adoption of Bluesign certification. Based on this assessment, NAD recommended that Everlane qualify the claim to clearly convey that Bluesign has a more limited environmental impact on environmental practices and Everlane’s nascent incorporation of the certification.

This serves as a reminder for fashion companies wanting to demonstrate their efforts and commitment to the environment to consider whether any claim they want to make needs language to explain the claim or otherwise clarify any limitations.

Katrina Hatahet, a law clerk with Kelley Drye & Warren, assisted in the drafting of this post.

Product Content Claims

Everlane made claims about the number of recycled bottles that had been used in certain products, such as a parka (“60 plastic bottles renewed”) and a sweatshirt (“15 plastic bottles renewed”). To substantiate the claims, the company provided evidence that it works with plastic pellet producers to calculate the amount of plastic needed to produce a fixed amount of yarns, figures out how much yarn is used in a product, and uses an average bottle size to calculate the number of bottles that were renewed.

Everlane used the same type of data to support a broader claim that, to date, the company had “recycled over nine million plastic bottles.” Everlane provided evidence of the number of garments it had produced using recycled plastic since 2018 and, using the same math, calculated the number of bottles that had been recycled since then. NAD determined that the math checked out in both cases and that Everlane had a reasonable basis to make both claims.

Aspirational Claims

In addition to claims about current practices, Everlane advertised that it intended to remove virgin plastic from its entire supply chain by 2021. As we’ve mentioned in recent posts, aspirational claims can be tricky to substantiate because you can’t prove what hasn’t happened. But that doesn’t mean that you can just rest on good intentions. NAD has held that “an advertiser must be able to demonstrate that its goals and aspirations are not merely illusory and to provide evidence of the steps it is taking to reach its stated goal.”

In this case, Everlane relied heavily on its Global Recycled Standard (or “GRS”) certification. GRS is an international standard that relies on well-established international and regulatory guidance (including the FTC’s Green Guides) for what constitutes recycled content. GRS also has stringent rules for third-party certification of chain of custody of recycled materials, content claims, social and environmental production practices, and chemical restrictions across manufacturing processes.

Everlane explained that it does not source GRS-certified materials containing any virgin polymers and only uses recycled polyester and recycled nylon content for its yarns. Also, in accordance with GRS standards, each stage of production is certified by an independent third-party. On its website, Everlane explains how it had achieved 90% completion of its goal and what it is doing to achieve the last 10%. Based on this evidence, NAD found the advertiser has a reasonable basis for its aspirational claim.

Safer for the Environment

Stay tuned for another post, where we’ll look at how NAD analyzed “Safer For The Environment” claim and provide other tips for substantiating green claims.

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.

The Green Guides describe the types of environmental claims the FTC may or may not find deceptive under Section 5 of the FTC Act. The FTC has brought many actions related to green claims, including the recovery of $1.76 million regarding “organic” claims, and we expect that they will continue to bring these types of actions, particularly as the focus on climate change increases. Accordingly, advertisers should carefully review the new Guides and ensure that their green claims comply with the FTC’s standards.

You can find more on the Green Guides, environmental marketing claims, and other key advertising and marketing, privacy, data security, and consumer product safety and labeling legal topics on Kelley Drye’s Advertising and Privacy Law Resource Center.

• Specify that “internet sales” include purchases through mobile device applications;

• Clarify that the option to provide a warning “by electronic device or process” is intended to apply to in-store product purchases at a physical retail location, and that this provision is unrelated to the requirements for warnings provided online for internet purchases;

• Make clear that the tailored warnings provided in the regulations for specific products (such as for food, alcoholic beverages, and furniture) apply to internet and catalog sales; and

• Expressly state that the requirement to provide warnings in alternate/foreign languages applies to the tailored product-specific warnings.

In September 2020, after reviewing feedback on the rulemaking, OEHHA announced that it intended to withdraw the proposed clarifications. Now, the agency has released its final determination and response to comments document in which it explains that the withdrawal was precipitated by stakeholder comments that the supposed “clarifications” in fact represented a “wholesale change” to “the existing safe harbor warning for almost every consumer product.” OEHHA objected to commenters’ characterization of the proposed revisions, particularly the contention that the “current safe harbor regulations do not require businesses selling online to provide both a website warning and a warning on or with the same product.” In OEHHA’s view:

Websites and smart phones can be a part of a safe harbor warning method, but neither are a standalone safe harbor warning method.

With regard to alcohol sales, OEHHA finalized a series of changes intended to codify the terms of a settlement stemming from the California Attorney General’s enforcement action against online sellers of alcoholic beverages. The new provisions include a requirement that Prop 65 warnings provided on-line or in catalogs also must be “provided to the purchaser or delivery recipient prior to or contemporaneously with the delivery of the product.” Such warnings “must be readable and conspicuous to the recipient prior to consumption of the alcoholic beverages,” and must be provided (1) on or in the shipping container or delivery package, or (2) delivered by email or text message as part of the electronic receipt or confirmation of the purchase. These regulations go into effect April 1, 2021.

It is important to remember that the “safe harbor” warning regulations are not mandatory, but, rather, prescribe warning text and methods that are considered de facto compliant. Businesses can use other means of communicating a warning, or different text, but, if so, they run the risk of a plaintiff challenging the sufficiency of the warning as “clear and reasonable.”

Further information is available at OEHHA’s website.

Find out more on Prop 65 on our Kelley Green blog.

The front label of Tide’s Purclean bottle prominently features the product name against a green, leafy backdrop. Directly under that are the words “plant based.” And below that, there is a line, under which are various things, including a “USDA Certified Biobased Product” seal with “75%.”

The challenger argued that consumers are likely to interpret the label to mean that the product is 100% plant-based. Tide countered that the 75% disclosure on the USDA seal, coupled with information on the back of the label, clarified that the product was only 75% plant-based.

NAD agreed with the challenger. “Although the seal discloses the amount of bio-based content, 75%, it does so in very small font such that it does not meaningfully qualify the overarching unsupported message reasonably conveyed to consumers that the entire product is bio-based.”

The battle continued on the back of the label, which featured the headline “A Powerful Plant-Based Clean You Can Feel Good About” followed by a list of ingredients. The ingredients are identified as plant- or mineral-based,” except for petroleum-based ingredients, which are simply identified as “cleaning aids.”

NAD was concerned that the headline could create the false impression that all the ingredients are bio-based. The “cleaning aids” heading didn’t help clear up that impression. In a footnote, NAD clarified that ingredient list standing alone “would not be problematic were it otherwise clear that the product formula was 75% plant based.”

Whether you’re advertising detergent or something else, consider how consumers are likely to interpret your labels and ads. Even if your claims are true, if the overall message could create a misconception, arguing that you presented the information necessary to clear up that misconception in a small disclosure may not save you.

On the latest episode of the Ad Law Access Podcast, Advertising and Marketing practice Christie Thompson discusses the key regulatory requirements (the FTC’s “Green Guides”) and practical tips for companies to consider when engaging in green marketing in the United States.

Listen on Apple, Spotify, Google Podcasts, SoundCloud or wherever you get your podcasts.

For more information on these and other topics, visit:

• Advertising and Privacy Law Resource Center
• Ad Law Access Blog
• Ad Law News and Views Newsletter
• Kelley Drye’s Advertising and Marketing Practice Page

• Substantiate all objective claims;
• Use clear and conspicuous disclosures;
• Specify how the claim applies (e.g., product, package, or service);
• Do not overstate environmental impact; and
• Clearly identify points of comparison.

• Qualify “Green,” “Eco-Friendly” and similar claims to identify the particular benefit and use those claims only if the benefit is significant.
• Use “Recycled Content” claims only for materials that have been recovered or diverted from the waste stream during the manufacturing process or after consumer use. Advertising for products made only partly from recycled content should include the percentage of recycled content (e.g., “Made from 30% recycled plastic bottles”).
• Avoid “Free-Of” claims (e.g., “free of dyes”) unless:
  • The product doesn’t have more than trace amounts or background levels of the substance;
  • The amount of substance present doesn’t cause harm that consumers typically associate with the substance;
  • The substance wasn’t added to the product intentionally; and
  • The product doesn’t include a different substance that poses a similar environmental risk.
• Qualify claims about “Renewable Material” to identify the material used and explain why it is renewable.