Environmental Marketing

Practice Areas > Environmental Marking

Make sure your green marketing gets the green light.

In recent years we have all witnessed the growth in 'green' marketing.  Businesses know that consumers are seeking more sustainable alternatives so businesses try to sell their products based on their environmental advantages as much as any other feature of the products. By itself, this is perfectly legal, but there is always a danger when making claims that others might be misled and misinterpret what is intended by the advertising claims which potentially exposes businesses to claims by consumers and competitors as well as prosecution by the ACCC. What are your obligations? Check out this overview of the law regarding environmental marketing.

Is your marketing misleading?

Graham runs a local nursery, and has started marketing a new line of mulch as 'Graham's Green Mulch'. He has also labelled his mulch products with stickers on the back that show the text 'Certified Water Efficient' and a picture of a dripping tap. Graham knows his mulch does not save any more water than any other mulch, but he wants to capitalise on the increasing consumer demand for 'green' products to improve his sales.

Unfortunately for Graham, his marketing approach puts him at serious risk of being prosecuted by the ACCC for misleading and deceptive conduct. He may be forced to pay substantial damages or even advertise the fact that his marketing was misleading, which would damage his business.

Graham could have avoided these sanctions by considering his legal obligations before marketing his mulch as 'green' or as 'Certified Water Efficient'.

What is misleading?

Your basic obligation when marketing or labelling products is to ensure that your conduct is not likely to be misleading or deceptive to your customers. Earlier this year, the ACCC released guidelines on how they will interpret 'misleading conduct' in relation to environmental marketing, which are summarised below.

The ACCC has taken a strict approach towards businesses, so that consumers can be confident products marketed as environmentally-friendly are actually beneficial to the environment.

Whether labelling is misleading depends on who will be reading it and how much attention they will be likely to pay to it. For example, a large label on a product will probably be seen when a customer is browsing, but fine print might not be. On the other hand, a customer reading a brochure will probably have more time to consider the claims, so the representations can be more detailed. The key point to consider is the impression the customer will get, from what you do and don't say and from the pictures, in the time they will probably spend looking at it.

Green claims

With the use of green marketing now widespread, it is difficult to obtain registration of trade marks containing terms such as 'green', 'eco-friendly' or 'efficient'.

The Trade Marks Examiner will not accept trade marks that are substantially identical or deceptively similar to earlier filed trade marks unless you can demonstrate that you have been trading under that brand extensively for a substantial period of time. Given that the market is saturated with environmentally-friendly brands, this means that brands of this nature are unlikely to be available for registration.

Furthermore, even if the brand you seek to register is available, theTrade Marks Act 1995also sets out specific grounds for applications to be rejected if they are misleading or contrary to any law.

Instead of using environmental terms as part of your branding, any claims you make about the efficiency of your products should simply be descriptors of the product.

For these reasons, Graham would probably have difficulty registering 'Green Mulch' as a trade mark, even if his mulch was more water efficient.

When naming or describing a product, you should not make any false claims about its contents, features, uses or benefits. For example, you should not say that a product is recycled if it is not, or if you have no evidence to suggest that it is. Going back to Graham, his 'Certified Water Efficient' sticker would be misleading unless he had actually had the mulch tested and certified by a legitimate authority. If your product only complies with a minimum environmental standard required by law, it is misleading to market it as 'environmentally-friendly'.

Even if your claim is not false, you need to be careful when making claims. If you are claiming your product is beneficial to the environment, you need to explain how it benefits the environment. For example, if your product does not contain a particular harmful chemical, you could state that and then explain how that chemical is harmful to the environment.

Avoid general claims such as statements that your product is 'green', 'water efficient' or 'environmentally friendly'. Statements like this are too vague and may lead customers to believe that your product is more beneficial than it really is for the environment. Graham should not have called his product "Green Mulch" unless it was better for the environment than normal mulch, and he should have explained how it was better, on a sign or on the label.

You should be able to substantiate any claim you make, even if you do not do so fully on the label. You should possess statistics that enable you to defend your claim if necessary. If the statistics are not conclusive or the measure is not universally agreed upon, you should make that clear on the label.

Always make sure you use plain language that can be understood by the people who will be likely to read your marketing. Technical jargon may confuse customers into believing that your product is more 'green' than it really is, which could be misleading. Ensure that any statistics that you publish do not seem to overstate the environmental benefits of the product, such as by claiming that your product is "now 50% more water efficient" if it was not very efficient to start with.

Be especially careful to take a 'big picture' approach to your product. Consider all the components or ingredients and the whole life cycle of the product, including its production, packaging and disposal methods. If only some ingredients are recycled, you need to specify which ones. Simply claiming that the product is 'made from recycled materials' would be misleading. Equally, if your product is biodegradable but the packaging is not, you should specify this. Further, if the product (once it has been manufactured) saves water when it is used, but the process of manufacturing the product uses significant amounts of water, this should be explained so as to avoid misleading or deceiving consumers.

A green look

Pictures, logos of accreditation schemes and even colours can all create an impression that your product is 'green', even if it is not. You should treat these just like verbal claims: don't use them unless they are true and you can back them up. Graham's picture of a dripping tap on the sticker may be misleading because it suggests his mulch saves water, but in reality his mulch did not save any more water than normal mulch. If your product has been validly accredited and you are entitled to use a particular logo on the label, you should explain briefly next to it what that logo means and who issued it. Sometimes a logo can suggest something to consumers that is different to what it really represents.

If you do produce or stock environmentally-friendly product lines, you should be maximising your sales by marketing and labelling them as such. Provided you make sure that your claims are always clear, specific and supportable, you can enjoy this benefit for your business and avoid unnecessary legal action.

Contact us to discuss the validity of your marketing

mdp McDonald Partners can help you to assess your compliance with theTrade Practices Actand to determine whether brand names you have selected are available and 'stand out' from your competitors. We can help you to build long-term, lasting value into your business and your brand. Our services include searches into the appropriateness of your brand, applications for registration, preparation of sale and licence agreements and tax and asset protection.

Written by Christopher Lum.

This article is intended to be a guide only, and should not be regarded as legal advice. If you would like to register your trade mark, or discuss any environmental marketing issues you may be facing, please contact Sarah Verstak .