- Sales of environmentally and socially friendly packaged products are increasing.
- Over the past year, consumers have spent $73 billion on products that are considered sustainable.
- The federal government is updating its guide on how companies can prove their environmental claims.
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As you walk down the aisles of the grocery store, you’ll see labels like “sustainable,” “made with 100% recycled materials,” or, increasingly, “carbon neutral” on all kinds of food, beverages, shampoos, and cleaning products. You can see the label attached. .”
It is profitable for companies to use this kind of label. Between 2017 and 2022, sales of packaged goods advertised as being environmentally and socially responsible increased by 28%, while sales of products without such claims increased by 20%. was. According to NielsenIQ and McKinsey research,
In the past year, consumers bought more than 13.6 billion products advertised as sustainable for a total of $73 billion, according to NielsenIQ research.
However, it is difficult to determine whether such claims are true or simply greenwashing.
Federal Trade Commission Updating the green guideoutlines how companies can prove their environmental claims so as not to mislead consumers. The current version is over a decade old and doesn’t define trendy terms like ‘sustainable’, ‘net zero’ and ‘carbon neutral’.
Mary Engle, executive vice president of policy at BBB National Programs, a nonprofit that oversees corporate advertising and privacy practices, said: “Companies also want a level playing field. If a company is investing in reducing the environmental impact of its products and services, it must be able to compete fairly on that front, and the same We must not be undermined by competitors who are not doing what they are doing.”
Engle, a former FTC official who worked on the first green guide in 1992, told Insider he hopes the FTC will also address its “ambitious” claims. Companies are touting what they plan to do, such as addressing the climate crisis and using recycled materials in their products.
The problem, Engle said, is that companies don’t have to prove they can hit their targets in a reasonable time frame.
she pointed to the case BBB National Programs has filed a lawsuit against the American Beverage Association, which represents companies such as Coca-Cola and PepsiCo.
The industry group’s Every Bottle Back campaign states that plastic bottles are “collected and separated from other plastics so they can be turned back into materials used to make new bottles.” The ad also said this would “reduce plastic waste”.
The BBB National Programs determined that these claims communicated that the bottles were made from recycled plastic and did not make it clear that this was the goal the companies were aiming for. And there was no clear evidence of significant reductions in plastic waste by companies.
The beverage industry disputed the findings, claiming the ad was intended to raise awareness that plastic bottles can be recycled. BBB National Programs Senior Committee upheld the original decisionA spokeswoman for the American Beverage Association told Insider it was looking into ways to fix the ad.
Meanwhile, the FTC is open for comments on how to update the Green Guide until Monday. It could also take him a year or more before the changes are finalized. And while the guide is not legally enforceable, it does influence industry practices, Engle said.