The Potential for Greenwashing from “Green” Trademarks and Marketing

By Vanessa Turk

The world is moving into an era of heightened environmental consciousness. This is driving businesses to enhance their commitment to sustainable practices. Registering a green trademark is one of many ways for a business to implement more sustainable practices, but it comes with the potential for greenwashing, which can have adverse legal consequences. Greenwashing is the practice of making a product or practice appear more environmentally friendly than it really is by using unsubstantiated and misleading claims about the sustainability of products, services, or practices. 

What are Green Trademarks? 

Trademarks are a type of intellectual property consisting of a word, phrase, symbol, logo, design, or expression distinguishing products or services from others and identifying their source. A green trademark is a trademark, service mark, or certification mark that is used to distinguish and identify environmentally friendly products or services in order to inform potential consumers about the product’s or service’s impact on the environment. It usually consists of a word, a symbol, or a logo that is used on the product’s packaging or on promotional or advertising materials to either indicate that the product was manufactured using sustainable materials, or that the business exercises sustainable practices to provide the services, manufacture the products, or both. Like traditional trademarks, the claimants of green trademarks have the possibility to register them with government agencies. 

Green trademarks may include terms or slogans that convey that a product is organic, good for the environment, energy efficient, biodegradable, compostable, or that it was made from recycled materials. Some may even include images, such as leaves, that convey that purpose. 

When a business or company uses a green trademark, it is marketing and promoting itself, its business practices, and its products or services as eco-friendly and sustainable. Therefore, green trademarks have become a key marketing strategy for businesses in this era of heightened environmental sensitivity because being viewed as environmentally sensitive promotes profitability. 

This practice of using green trademarks to help businesses build an environmentally friendly image for themselves is a growing practice due to the rise in demand for sustainable products and services by consumers who are increasingly conscious of their purchases and their impact on the environment and ecosystem. The number of consumers who say that sustainable business practices affect their decisions to purchase is surging. In fact, the 2023 Business of Sustainability Index (“BOSI”) by PDI Technologies demonstrates that 68% of American consumers are willing to pay more for products that are environmentally sustainable, compared to 66% in 2022 and 64% in 2021. 

Potential Claims of Greenwashing 

One of the downsides of this positive trend is the problem of greenwashing. The use of inadequate green trademarks can prompt potential greenwashing lawsuits brought by misled consumers, competitors, or regulators. A company or business can be accused of greenwashing when it invests large amounts of time and money into making it seem like its practices and products are environmentally friendly and sustainable, instead of actually putting in the effort to live up to those standards of sustainable business practices. 

The term “greenwashing” was first coined by the environmentalist Jay Westervelt back in 1986. Three years earlier, he had seen a sign at a hotel in Fiji asking its customers to pick up their towels and “help them to help the environment” by reusing the towels to reduce ecological damage. Westervelt doubted the credibility of that statement especially since the hotel was in the midst of expanding at that time. The term officially entered the English language by the end of the 1990s with its inclusion in the Oxford English Dictionary. 

Classic Greenwashing Scheme: Rebranding and Marketing

Companies and businesses frequently resort to rebranding, repackaging, and marketing in order to make their products or services look more appealing to consumers who are conscious about protecting the environment. However, these practices are often a form of greenwashing. Businesses might try to make their products and packaging have a “greener” look by modifying the colors, logos, and images on them, or even by adding slogans that include environmentally friendly expressions. This is generally not a problem if what is being portrayed by the company is true. However, this rebranding does not always reflect the reality of the products or services in question, or the reality of the business practices behind those products or services, which can trigger an actionable greenwashing claim. 

The same problem exists when companies market their products or services using terms such as “green,” “sustainable,” “organic,” “compostable,” “biodegradable,” “natural,” and “carbon neutral” to highlight their environmental benefit. This is called green marketing and it can enhance the appeal of the products or services in question; however, it can also attract the attention of potential litigators and regulators if it is not backed by factual evidence. Such claims could include a state law claim of false advertising, or a federal unfair competition or false advertising claim under the Lanham Act, which is the primary federal statute for trademark regulation.

Therefore, it is very important for companies to have factual bases for their green claims in order to be able to prove their accuracy with complete transparency. Companies should not solely use a green trademark or brand name, or a catchy ‘green’ slogan without having factual evidence to prove that they are not greenwashing. In order to avoid greenwashing, green claims must be relevant, valid, and material to consumers, and must be supported by factual evidence so that the company’s commitment to reduce its impact on the environment can be verified externally. 

Unintentional Greenwashing

Sometimes companies genuinely believe that they are considerably decreasing their carbon footprint and they advertise these efforts and accomplishments to the consumers as well as to their employees and stakeholders, or even rebrand and repackage their products to reflect these accomplishments. In reality, however, their actions may not yield the intended result. 

Therefore, it is important for businesses to strive to avoid potential greenwashing lawsuits by conducting green intellectual property audits if they intend to apply for a green trademark to make sure that the products or services that they are offering actually meet the requisite sustainability criteria. If the Federal Trade Commission (FTC) discovers that a company has made deceptive or misleading claims about a product, it can impose a fine up to $16,000 per violation, a cease-and-desist order, or one year of imprisonment, even though it is not easy for the government to make a case in such situations because it is not a requirement for companies to disclose information about their environmental performance. 

Recommendations on How to Avoid Potential Greenwashing Lawsuits

In order to avoid potential greenwashing lawsuits, companies must be attentive when they choose to register green trademarks, or when they resort to green marketing. 

They must avoid the use of vague terms and phrases that are not credible or that have no clear meaning such as “natural” or “eco-friendly” and should instead use clear terminology that is easy to understand, like for example stating that a product was “made with 70% organic cotton” instead of simply saying that it was “made with organic cotton.” The same applies to images used in branding and marketing, which should neither be misleading nor give an inaccurate green impression. 

Companies should also avoid overstating their sustainability impacts. Transparency and clarity are key here. They should strive to make sustainability a part of their business practices instead of, for example, claiming that their products are environmentally friendly when in fact their business practices were harmful to the environment. A company should evaluate the sustainability of the production and manufacturing process it follows, as well as the environmental impact of its products or services, before making claims that might be misleading and inaccurate. 

Another important recommendation is to always have credible and verifiable factual evidence and data to back up their sustainability claims. 

The best way for a company to establish its green credentials is by use of a certification mark. A large number of consumers rely more and more on certification marks when deciding whether to purchase a certain product or service. Certification marks are usually owned by a specific entity and set standards that have to be met by any company who wishes to use the mark. Some examples of certification marks are “LEED,” which is a green building certification program, “Green Seal” for the certification of products and services, and “SIP” for the certification of winegrowers and winemakers. 

To conclude, businesses and companies should be more mindful when they communicate messages to their consumers about their products, services, or practices. In this era of heightened environmental consciousness, it is harder to deceive and mislead consumers and greenwashing lawsuits are becoming more common. 

Sources: 

• Kathryn Park, Green Trademarks and The Risk of Greenwashing, WIPO Magazine (Dec. 2022) https://www.wipo.int/wipo_magazine/en/2022/04/article_0006.html.
• Kenneth Partridge, VW Scandal Just the Tip of the Greenwashing Iceberg, Columbia Business School (Oct. 23, 2015) https://business.columbia.edu/cgi-marketing/chazen-global-insights/vw-scandal-just-tip-greenwashing-iceberg.
• Christian Yonkers, What is Greenwashing?, Sustain Life, https://www.sustain.life/blog/what-is-greenwashing(last updated May 9, 2023).
• Joan W., What is Green Marketing and 9 Examples to Inspire You, Content Writers (Jan. 12, 2023) (https://contentwriters.com/blog/brands-doing-green-marketing-right/#:~:text=What%20Company%20Uses%20Green%20Marketing,Body%20Shop%2C%20and%20Imperfect%20Foods. 
• Massimo Maggiore, Can Trademarks Ever Be Green? Between Green-Branding and Greenwashing, Int’l Trademark Assoc. (Mar. 10, 2021) https://www.inta.org/perspectives/features/can-trademarks-ever-be-green-the-line-between-green-branding-and-greenwashing/.
• Bruce Watson, The Troubling Evolution of Corporate Greenwashing, The Guardian (Aug. 20, 2016) https://www.theguardian.com/sustainable-business/2016/aug/20/greenwashing-environmentalism-lies-companies. 
• Definition of Greenwashing, Merriam Webster https://www.merriam-webster.com/dictionary/greenwashing (last visited Aug. 1, 2023).
• Adam Hayes, What Is Greenwashing? How It Works, Examples, and Statistics, Investopedia (Mar. 31, 2023) https://www.investopedia.com/terms/g/greenwashing.asp. 
• 2023 Business of Sustainability Index, Report Shows Consumers Want Sustainable Products, PDI Technologies (Apr. 26, 2023) https://pditechnologies.com/resources/report/2023-business-sustainability-index/.