ADventures in Law

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As consumers have increasingly looked to see whether the companies they do business with have taken steps to benefit the environment, companies have often responded by announcing environmental goals. Why goals? First, a goal of 100 percent carbon emissions reduction by 2040 sounds a whole lot better and loftier than saying last year, we reduced our carbon emissions by 5 percent. Second, as anyone who has ever tried to lose weight well knows, a goal is a whole lot easier to set than actually achieve. And, finally, no doubt some advertising lawyer advised them to talk about goals rather than concrete promises so there is some wiggle room just in case.

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But what does it mean to have a goal? To revert to the weight loss analogy for a moment, a goal might simply mean that you want to lose a certain number of pounds but have no idea if or how you’ll do that. Or it might mean that you’ve started looking at potential gym memberships and different types of diets but haven’t yet settled on an approach. Or it might mean you’ve set realistic weekly targets for how often you intend to work out, how much weight you hope to lose and how many calories per day you plan to consume. Of course, none of these approaches guarantees success, but the last one likely is the most promising.

Enter now the National Advertising Division. Of late, NAD has become the stomping ground for advocacy groups eager to use false advertising principles to slap down claims by companies that they view as exploiting consumers’ desire for companies to be better stewards of the Earth and the animals that help feed us (at least up until the point where they feed us). Not surprisingly, these groups urge NAD to hold companies making such claims to very high standards. A recent NAD case involved a challenge by the Institute for Agriculture and Trade Policy, whose stated mission is to promote credible and transparent corporate disclosures of greenhouse gas emissions, <a href="https://bbbprograms.org/media-center/dd/jbs-net-zero-emissions">to claims made by JBS</a>, the second-largest food company and largest animal protein producer in the world, relating to net-zero greenhouse gas emissions.

In a demonstration that not everyone has gotten the memo about goals versus promises, one of the challenged claims was that JBS “will achieve Net Zero greenhouse gas emissions.” JBS voluntarily withdrew the claim, likely because it would be construed as a promise rather than a goal. The other challenged claims were phrased either as a commitment to “net zero” or as a “goal.” All sides agreed that the claims meant more than a mere dream and that some evidence of efforts to meet the goal was required. But what type of evidence? The advertiser argued that it had already spent a considerable amount of money toward coming up with a plan for how it might achieve its goal. However, NAD agreed with the challenger that for an “unqualified” claim of a net-zero emissions goal, more was required. What NAD wanted was not just an effort toward figuring out how to achieve the goal but also an actual plan with specific objectives and measurable outcomes likely to be achieved that would put the company on a glide path to achieving its net-zero goal on the promised timeline.

The advertiser opted to appeal, so we will await final word from the National Advertising Review Board, but the decision serves as a cautionary tale for companies promoting environmental, social and governance goals to consider whether there needs to be an actual, feasible plan in place and whether the company is on track with its plan.

NAD Gives Net-Zero Claim a Grade of Zero