To many, a trip to the grocery store exemplifies the definition of an overwhelming experience. With entire aisles devoted to potato chips, frozen dinners, and beverages, the unfamiliar shopper faces many difficult decisions. While everyone would surely enjoy sampling bottled water from every natural spring across the planet, for various reasons, impracticalities surround this feat. In order to combat this dizzying adventure, consumers instead frequently select a favorite. But what factors influence this choice? For some, the bottle’s ergonomics may dictate the decision. After all, the bottle’s comfort in one’s hand is vital. Others may adopt a dollar-maximization approach and purchase the least expensive option. For one Southern California woman, it was a company’s dedication to reducing carbon emissions that influenced her decision.
In 2007, FIJI Water began advertising itself as an environmentally conscious business that aspired to manufacture a carbon-negative product. In order to achieve a carbon-negative product, the production and sale of FIJI Water would have to result in a net reduction of carbon emissions in the atmosphere. Although laudable, FIJI Water’s goal was ambitious due to the considerable levels of pollution and CO2 emissions that are attributable to the manufacturing and transportation of bottled water. Yet in light of the pollution associated with the bottled water industry, FIJI Water appeared to be taking a stand. However, FIJI Water may have gone too far in their campaign when the company included carbon negative labels on its water bottles.
In a lawsuit filed in the U.S. District Court in Santa Ana, California, Desiree Worthington claims that she was willing to pay more for FIJI Water because of the company’s carbon-negative advertising. What Ms. Worthington and other consumers were unaware of was FIJI Water’s forward crediting program. A forward crediting program allows an organization to give itself credit for carbon reductions that have not yet actually occurred. Thus, FIJI Water’s carbon offsets did not actually occur at the time of production or transportation, but rather were anticipated. In fact, according to a press release, FIJI Water announced that the carbon offsets necessary to make the company carbon negative would not be realized until 2037.
At the time of Ms. Worthington’s purchase, FIJI Water’s website claimed to have been a carbon-negative brand since 2008, under which it sought to offset 120 percent of carbon emissions. (The language in question has since been removed from the FIJI Water website.) Dismayed by FIJI Water’s marketing techniques, a Newport, California firm filed a class-action lawsuit accusing the company of deceiving consumers with its forward crediting program. According to the complaint:
[FIJI Water] convince[s] consumers to buy their ‘FIJI’ brand of bottle water—and to pay more for FIJI than for competing brands—by advertising and labeling FIJI as ‘the world’s only carbon negative bottled water.’ In other words, defendants claim that they remove more carbon pollution from our atmosphere than they release into it. In reality, however, FIJI Water is not ‘carbon negative.’ Instead, defendants justify this claim by employing a discredited carbon accounting method known as ‘forward crediting.’ Thus, defendants do not remove more carbon pollution that they create; they simply claim credit for carbon removal that may or may not take place—up to several decades in the future.
Furthermore, Scott J. Ferrell, lead counsel, states:
We want FIJI Water to stop distorting its environmental record to push sales of overpriced bottled water. It is unconscionable for FIJI Water to charge double the price of its competitors by convincing consumers that drinking FIJI Water helps the environment, when in reality the opposite is true.
Two causes of action, both stemming from California state law, are particularly appealing to the plaintiffs in this case. First, a cause of action for unfair competition could prove successful. California’s Unfair Competition Law, California Business and Professions Code Section 17200–17209, defines unfair competition as “any one of…five types of business wrongs,” including “unfair, deceptive, untrue or misleading advertising.” Under section 17200, an action may be brought as a class action. Thus, if the plaintiffs can show that FIJI Water’s claims were deceptive, untrue, or misleading, relief should be available. Under the statute, injunctive relief and restitution would be available to the plaintiffs, but compensatory and punitive damages would not be.
Second, the California Consumers Legal Remedies Act (CLRA) (Cal. Civ. Code § 1750 et. seq.) may provide an alternative cause of action. Section 1770 prohibits vagueness, unfair business practices, and deception by declaring unlawful “methods of competition and unfair or deceptive acts or practices undertaken by any person in a transaction intended to result or which results in the sale or lease of goods or services to any consumer.” The CLRA claim is especially appealing because § 1780 allows consumers that suffer damages as a result of a practice declared unlawful by § 1770 to obtain actual damages, injunctive relief, restitution, punitive damages, courts costs, and reasonable attorney fees. Thus, if Ms. Worthington can prove that FIJI Water’s carbon-negative claims were unfair, deceptive, and resulted in the purchase of the bottled water, she stands to win both compensatory and punitive damages.
The case against FIJI Water demonstrates the importance of holding companies accountable for their “green” marketing campaigns. While many consumers are eager to contribute to sustainable businesses, many are unaware of the intricacies and potential deceptions that programs such as credit forwarding and offsetting purchases present. Thus, regardless of the theory of liability, companies that make deceptive claims about products should be held liable in order to prevent the spread of this particular form of greenwashing.
Greenwashing refers to the deceptive use of green marketing in order to promote a misleading perception that a company’s policies or products are environmentally friendly. In the United States, the Federal Trade Commission (FTC) provides green guidelines for environmental marketing claims. Of particular interest is a proposed guideline that advises marketers to disclose whether their claimed emission reductions would not occur for two years or longer. While the green guidelines were not created as an enforceable regulation, they do provide insight into what acceptable green marketing practices should look like. As such, perhaps the FTC’s proposed guidelines might have some persuasive effect in the court’s consideration of whether FIJI Water’s claims were deceptive or misleading.
As the demand for environmental-friendly products continues to increase, more and more companies will want to capitalize on this new segment of the market. Yet with this increase comes the potential for abuse, preeminently in the form of consumer deception. The FIJI Water case illustrates a prime example of this predicament. Technically, FIJI Water is not required to disclose the exact details of its carbon negative campaign under current regulation. However, if Ms. Worthington’s lawsuit proves successful, perhaps current regulation could be read as prohibiting such practices. As such, other companies would be less likely to engage in similar greenwashing tactics.
As a substantive matter, Ms. Worthington’s case should prevail. FIJI Water’s advertising was deceptive and misleading. A reasonable consumer would likely interpret a claim that a company is carbon negative to mean that the company does not currently emit any carbon into the atmosphere. FIJI Water should have clarified these statements by explaining its use of forward crediting and offsetting purchase programs. The confusion emanating within consumers such as Ms. Worthington is directly related to the absence of such a disclaimer. Furthermore, FIJI Water included carbon-negative statements on its products and website in order to prove its superiority over its competitors to consumers. This tactic sought to influence consumers’ purchasing decisions based on misleading information. Lastly, and again while not binding, FIJI Water’s thirty-year carbon reduction model certainly exceeds the recommended two-year model set forth by the FTC. The aforementioned factors all suggest that FIJI Water should be held accountable for confusing consumers and misrepresenting itself as a carbon-negative company.
