Lawsuits Start to Surface From Unclear Green Labeling

My conscious weighs on me as I stare at the selection of colorful shampoos in aisle five of Whole Foods.  Should I pay the extra $1.49 for the one made from organic lavender or save some cash and opt for the one containing the ever-so healthy sodium lauryl sulfite?  According to a recent Wall Street Journal article, Green Goods, Red Flags, 17% of American consumers agree with me and are willing to pay more for environmentally friendly products, which is up from 10% last year.  But are these products as “environmentally friendly” as labeled?

Consumers are becoming more hip to the fact that some of these labels are actually created by the marketing department of the company, not a third party regulator.   SC Johnson’s Greenlist label on their Shout and Windex bottles were actually created by the company itself, similar to when mom used to make her delicious “homemade” macaroni and cheese, while you later open the trash can you see boxes of Stouffers tucked below. Just as it’s upsetting to me, this false labeling is upsetting consumers.  In fact, the Federal Trade Commission (FTC) has recently stepped in as four consumer lawsuits have been filed since 2007 due to a failure to follow the well documented FTC Green Guide.

Not only are consumers raising awareness, but competitors in their respective industries are starting to raise the red flag.  The famous Dr. Bronner’s Magic Soaps, the top selling natural soap brand, has raised serious awareness in its struggle to clean up the organic branding in personal care. The family owned business continues to file lawsuits against companies that use non-organic pesticide agriculture in the ingredients of their misbranded organic products.

On the assumed guilty list are Hain-Celestial, creator of the J.A.S.O.N. brands, and Levlad, with their Nature’s Gate organic product.

The law will determine who is to blame here as these class action lawsuits enter the courtroom, while companies who reaped billions in profits appear to have acted erroneously here.

Based on a 2009 study of more than 18,000 ads in major magazines, over 10% made “green” claims.  This probably doesn’t come to a big surprise, as we witness the schmear of flowery ads in everything from Maxim to Bloomberg to Businessweek.   According to Thomas Lyon, professor of economics at University of Michigan’s Ross School of Business, the numerous lawsuits are now signaling a “turning point in corporate green claims.”  If nothing else, this turning point may expose the good guys from the bad.

Dale Wannen

Dale Wannen is President of Sustainvest Asset Management, an investment advisory firm focused on sustainable and responsible investing (SRI). Prior to Sustainvest, Dale was a portfolio manager at Harrington Investments and specialized in ESG investment strategies, securities analysis, and shareholder advocacy. Prior to this position, Dale was a financial advisor with UBS Wealth Management Services in San Francisco. He is often a guest speaker on the topic of ESG investing and shareholder advocacy.Dale has an MBA in Sustainable Management from Presidio Graduate School in San Francisco. He earned a B.A. in Economics from Rowan University and currently is a volunteer with Mentor Me Petaluma, Rebuilding Together Petaluma, and the founder of Green Drinks Petaluma.He also currently sits as Board of Director and Treasurer of San Francisco human rights organization, Global Exchange, teaches Economics for the Oakland non-profit Game Theory Academy and is a committee member for the National Resources Defense Council (NRDC) in San Francisco. Previous volunteer work has included Treasurer and Board Member for bird conservation organization, San Francisco Bay Bird Observatory (SFBBO), committee member of the Petaluma Pedestrian and Bicycle Advisory Committee (PBAC), and President of the Social Venture Finance Club at Presidio Graduate School.Dale currently holds the Series 65 FINRA license and has previously held the Series 6, 7, 63, 66 and California Life and Health Insurance Certification. He is a member of National Association of Professional Financial Advisors (NAPFA) and the Financial Planning Association (FPA).Dale lives in Petaluma, CA with his wife Lauri and their Malamute Shadow.

4 responses

  1. I've wondered for years how they could get away with it. It's lying, period. I'm glad one of the “big”, smaller guys is able to fight against them. We make our products as natural as possible, but never make any kind of claim whatsoever! Just don't get caught up in the hype about preservatives and “ALL” natural. Preservatives, if used responsibly, are safe! Don't let these same lyres convince you that a product don't need one!!!

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