Regulating Green Marketing Claims in the United States

22 Pages Posted: 5 Sep 2018 Last revised: 5 Oct 2018

See all articles by James P. Nehf

James P. Nehf

Indiana University Robert H. McKinney School of Law

Date Written: August 28, 2018

Abstract

Environmental-friendly marketing (eco-labeling) has emerged as an important approach to selling products and services to consumers in the global marketplace. Various claims, marks, labels, symbols and logos are being used to appeal to consumers who are increasingly concerned about the environmental effects of their consumption. Touting a firm’s “green credentials” can improve a seller’s image in the public eye and potentially increase sales. Surveys show that a large proportion of consumers, at least those in more advanced economies, are willing to pay more for green or environmentally-friendly products and services. Studies have also shown that green customers tend to be more affluent, better educated, and more loyal to brands that they purchase. On the business side, there is evidence that environmental-friendly businesses enjoy positive public reputations, generally supportive government policies, and potential for higher sales revenues. The problem is that green marketing can be overstated, confusing, misleading, or outright false advertising. “Greenwashing” occurs when a business promotes its eco-friendly attributes in a false or misleading way. When that happens, consumers may end up paying more for products and services without supporting a positive environmental impact. The result is a loss of consumer welfare, little or no environmental benefit, and no social benefit except increased corporate profits.

Keywords: green marketing, greenwashing, green washing, eco-labeling, deceptive practices

Suggested Citation

Nehf, James P., Regulating Green Marketing Claims in the United States (August 28, 2018). Indiana University Robert H. McKinney School of Law Research Paper No. 2018-9. Available at SSRN: https://ssrn.com/abstract=3240164 or http://dx.doi.org/10.2139/ssrn.3240164

James P. Nehf (Contact Author)

Indiana University Robert H. McKinney School of Law ( email )

530 West New York Street
Indianapolis, IN 46202
United States

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