Environmental claims: Overview, definition, and example
What are environmental claims?
Environmental claims refer to statements, representations, or commitments made by a company about the environmental benefits, impact, or sustainability of its products, services, or operations. These claims can include statements about being "eco-friendly," "carbon neutral," "biodegradable," or "made from recycled materials."
For example, a company selling cleaning products may claim that its packaging is 100% recyclable or that its ingredients are environmentally safe. These statements are considered environmental claims and are subject to consumer protection laws and advertising standards.
Why are environmental claims important?
Environmental claims are important because they influence consumer choices and corporate reputation. However, misleading or false claims—often referred to as "greenwashing"—can lead to legal liability, regulatory penalties, and reputational damage.
Many jurisdictions have strict guidelines on how businesses can make environmental claims. Companies must provide scientific evidence or certifications to support their statements, ensuring they do not mislead consumers or investors.
Understanding environmental claims through an example
Imagine a clothing brand advertises a new line of "sustainable fashion" made from recycled materials. If the company cannot verify that a significant percentage of the fabric is actually recycled, regulators or consumer advocacy groups may challenge the claim as misleading.
Similarly, a food packaging company may claim its containers are "biodegradable." If the packaging only breaks down under industrial composting conditions, but not in a typical landfill or backyard compost, the claim may be considered deceptive unless clearly qualified.
An example of an environmental claims clause
Here’s how an environmental claims clause might appear in a contract:
"Any environmental claims made by either Party regarding the sustainability, recyclability, or environmental benefits of its products or services must be substantiated with verifiable data, third-party certifications, or compliance with applicable environmental advertising standards. Misrepresentation of environmental claims shall constitute a material breach of this Agreement."
Conclusion
Environmental claims are statements about the sustainability or environmental impact of products and services. While they can enhance a company’s reputation and appeal to eco-conscious consumers, they must be truthful, verifiable, and compliant with regulations to avoid legal and reputational risks.
By including clear environmental claims clauses in contracts, businesses can ensure compliance, avoid misleading statements, and protect themselves from legal disputes related to sustainability marketing.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.