Vorys, Sater, Seymour and Pease LLP
Daren S. Garcia and Steven A. Chang
February 2, 2016
Allegations of “greenwashing”—generally defined as “the practice of making an unsubstantiated or misleading claim about the environmental benefits of a product, service, technology or company practice” —are on the rise. A study by TerraChoice, a Canadian-based environmental marketing agency, found in 2010 that approximately 95 percent of products marketed as eco-friendly at that time committed at least one or more greenwashing-related “sins.” And while some commentators have criticized the accuracy of the TerraChoice report, allegations of greenwashing are becoming increasingly pervasive in the U.S. marketplace and have received growing attention from state and federal regulators, legislators, and consumers alike.
Businesses are scrambling to distinguish themselves from their competitors as the most “eco-friendly.” A survey by the Boston Consulting Group published in 2010 found that close to seventeen percent of U.S. consumers were willing to pay more for environmentally-friendly products. And, when compared to previous studies, that number is on the rise. Another consumer study by BBMG, GlobeScan, and SustainAbility in 2012 found that nearly two-thirds of consumers surveyed in six markets internationally felt “a sense of responsibility to purchase products that are good for the environment and society,” and 70 percent would buy an environmentally-friendly product over a standard one.