The BBB National Programs' National Advertising Division (NAD) rules on environmental claims in the consumer goods sector. HoldOn is a manufacturer of trash bags that markets its products as biodegradable, but that claim was challenged by the Glad Product Company. What instruction can marketers take from this decision on substantiating green claims?
The NAD Challenge
Glad Products Company challenged advertising claims made by HoldOn before the BBB National Programs' National Advertising Division. Conventional trash bags are not compostable or biodegradable. HoldOn's bags are certified by the Biodegradable Products Institute and TÜV Austria as compostable in home and commercial environments. The certifications form the basis for its claims about biodegradability and environmental benefit.
This dispute is centered on how consumers interpret those claims. HoldOn's bags break down in composting environments; however, Glad alleged they do not decompose as advertised when disposed of in landfills. Glad argued that HoldOn's advertising failed to communicate this limitation adequately, implying an overly broad message of superiority.
Environmental, social, and governance (ESG) considerations are guiding more consumers’ purchasing decisions, and the NAD's analysis guides how ecological claims must be framed and substantiated.
NAD's Findings
The NAD found that HoldOn messaging exceeded the evidence that supported it. In particular, the NAD named the ads’ implication that the bags were not plastic and offered an environmental advantage, regardless of disposal conditions.
The NAD recommended that HoldOn:
- Clearly and conspicuously disclose the specific circumstances under which the bags degrade, compost, or "break down."
- Avoid conveying messages of broad or unqualified environmental benefits.
- Avoid conveying the impression that HoldOn bags are not made of plastic.
ESG Claims Implications
Even when products meet certification standards, environmental and sustainability claims must be properly substantiated to ensure that the messaging accurately reflects the practical realities of product use. Failure to do so can expose brands to costly challenges.
Innovation in biodegradable and compostable materials is accelerating to meet environmental needs, and advertisers must ensure that their ESG messaging aligns properly with data substantiating product performance. IMS Legal Strategies conducts reliable claim substantiation research designed to support environmental and sustainability claims in compliance with evolving regulatory standards.
