Aspirational Environmental Benefit Claims Attract Increased Scrutiny

I recently had the privilege of co-presenting on legal issues involving “green” claims at ACI’s 2024 Food Regulation Conference. A notable developing trend that was discussed during our panel is the increasing scrutiny of aspirational environmental benefit claims, such as a pledge to be carbon free by 2050. 

Aspirational claims are claims that by their very nature are conditional pledges and might be dismissed as non-actionable due to a perceived lack of consumer reliance.  Recent NAD advertising challenges to aspirational environmental claims by nonprofit organizations and NAD itself through its monitoring process make clear, however, that these aspirational pledges will be taken as express environmental benefit claims that must be narrow and adequately substantiated. Indeed, NAD has repeatedly ruled that even if they are aspirational, such environmental claims must be backed by a viable plan that has been implemented to reach the stated goal.  Moreover, the business making the claim must be prepared to demonstrate that it has made concrete efforts to meet the implemented plan.   

A recent NAD challenge and subsequent actions brought against JBS USA Holdings, a subsidiary of the largest meat producer and second largest food producer in the world, by an environmental nonprofit should remind businesses of this obligation. The challenge was brought against JBS over various aspirational claims that its production practices would result in net zero carbon emissions by 2040, similar to the Paris climate treaty goals.   

JBS’s net zero claims were considered to be very aggressive particularly given that its present carbon emissions have been calculated by some organizations as the annual equivalent to the emissions from entire countries such as Spain or Ireland, an obviously massive amount of carbon emissions for one company. Furthermore, because some of its meat comes from areas impacting Amazonian deforestation and the company continues to expand, the idea that its carbon emissions were trending towards zero faced skepticism.    

When JBS’s claims were challenged by the nonprofit, NAD found that JBS failed to sufficiently demonstrate that it had a viable plan in place to meet the stated goal of achieving net zero carbon emissions in 2040. Similarly, JBS failed to show that it had taken substantial steps to support its touted net zero emissions goal.  JBS was no more successful on appeal to NARB, nor in a subsequent compliance challenge brought against it. The self-regulatory bodies repeatedly found that no matter how JBS tweaked the “net zero” claims, it lacked sufficient substantiation and the claims therefore should be discontinued.   

While the failure to adhere to NAD recommendations typically will result in a referral to the Federal Trade Commission, New York Attorney General Letitia James earlier this year sued JBS USA alleging that its net zero claims violated New York’s General Business Law. The complaint explicitly referenced JBS’s failure to comply with NAD findings and recommendations to discontinue the challenged claims. While the litigation is in its nascent stage, it is clear that a new enforcer has emerged to take up an advertiser’s failure to comply with NAD’s recommendations. 

NAD’s decisions against JBS does not mean that all aspirational environmental claims will suffer the same fate. Indeed, NAD’s 2022 monitoring challenge against Chipotle for its “Can a burrito change the world” by reducing carbon emissions and increasing organic ingredients campaign resulted in the self-regulatory body finding the claims were reasonably substantiated. There, Chipotle demonstrated it had a plan to purchase more organic ingredients, use more proximate suppliers, and take other concrete steps to reduce emissions. Moreover, Chipotle was able to show that it was actively supporting these environmental goals by engaging in these efforts, and the claims were found to be reasonably supported.  

Takeaways: With growing environmental and climate change concerns, businesses are under increasing pressure to make environmental benefit claims, even if they are aspirational pledges. However, a pledge is not enough to survive scrutiny and must be backed by a viable plan and demonstrated actions in support of the plan. Additionally, businesses should keep in mind that as individual states continue to take up green claims, their respective Attorneys General may increasingly enforce NAD recommendations.

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