Marketing carries legal risks — especially the risk of greenwashing by making misleading environmental claims. Greenwashing can damage reputations, trigger lawsuits and violate federal and state consumer protection laws.
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Q: What is greenwashing, and how can we avoid it?
ACE advises: As cost-effective sustainability initiatives become central to modern business strategy, many companies are eager to share their environmental commitments. But marketing those efforts carries legal risks — especially the risk of greenwashing by making misleading environmental claims. Greenwashing can damage reputations, trigger lawsuits and violate federal and state consumer protection laws.
The Federal Trade Commission regulates environmental marketing through its Green Guides, which require that sustainability claims be truthful, substantiated and clearly defined. Broad terms like eco-friendly, natural or green may seem harmless, but without specific context, they can be considered deceptive. For example, a company claiming to offer “carbon neutral products” must be able to prove how emissions were measured and offset, and for how long.
Even well-meaning businesses can run into trouble by overstating effects or relying on outdated data. Claims about recyclable packaging, organic ingredients, or water savings need to be supported by evidence and, where applicable, clarified with disclaimers. Businesses should also be cautious when using third-party certification logos — improper or unauthorized use can result in legal consequences.
To avoid greenwashing, work with legal counsel to vet all sustainability-related marketing. Develop internal review processes to confirm that claims are fact-based, current and compliant with applicable laws. If your business has made improvements, be specific: “Our packaging now uses 30% post-consumer recycled materials” is better than saying “now greener!”
Transparency and precision build trust — and reduce legal exposure. As sustainability continues to evolve, so will the standards for how it’s communicated. Staying informed and proactive is the best way to avoid costly missteps.
Carrie Green Yardley, founder of Yardley Esq. PLLC, is an ACE board member, contributing writer to Mainebiz and member of the ClimateWork Maine Sustainability Council. Her firm represents small business clients from formation through succession. Carrie can be reached at carrie@yardleyesq.com.
