Coca-Cola Wins Greenwashing Case

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The DC Superior Court has granted Coca-Cola Company’s motion to dismiss a 2021 lawsuit filed against it for false and deceptive marketing practices. Plaintiffs argued that the company had falsely represented itself as a sustainable and environmentally friendly company. The 2021 Complaint alleged that Coca-Cola’s representations violate the District of Columbia Consumer Protection Procedures Act (“DC CPPA”) because its marketing and advertising “tend to mislead and are deceptive about the true nature and quality of its products and business.”

The Complaint stated that the marketing is false and deceptive because the company “portrays itself as ‘sustainable’ and committed to reducing plastic pollution while polluting more than any other beverage company and actively working to prevent effective recycling measures in the U.S.” The Complaint cites numerous examples, including:

  • A statement on the Coca-Cola website stating, “Our planet matters. We act in ways to create a more sustainable and better shared future. To make a difference in people’s lives, communities and our planet by doing business the right way.”
  • A statement on the company website stating, “Make 100% of our packaging recyclable globally by 2025. [And] [u]se at least 50% recycled material in our packaging by 2030.”
  • A statement on the company’s Twitter account stating, “Scaling sustainability solutions and partnering with others is a focus of ours.” “Make 100% of our packaging recyclable globally by 2025. [And] [u]se at least 50% recycled material in our packaging by 2030.”

Coca-Cola filed a motion to dismiss in response. The DC Superior Court found that Coca-Cola’s statements were aspirational in nature and, therefore, not a violation of the DC CPPA. The Court stated that Earth Island Institute had not alleged that any statement made by Coca-Cola was provably false or plausibly misleading or that the company misled consumers as to its products’ characteristics. The Court acknowledged that Coca-Cola may have failed to meet advertised environmental goals in the past, but that does not impede its ability to set future environmental goals publicly.  In addition, the Court held that Coca-Cola’s statements were not tied to a “product or service” as required by DC CPPA. None of the statements were included on the bottle of any product or in the marketing of any product. Furthermore, the Court determined that Coca-Cola’s statements are not sufficient to create a misleading “general impression” or a “mosaic of representations” to a reasonable DC consumer as a matter of law under the DC CPPA.

The Court further stated that the Complaint could not prevail because it was based on how Coca-Cola has branded itself, and the DC CPPA does not have any controlling authority on how a brand cultivates its image. Coca-Cola made no specific environmental commitments, which further made it difficult for the Court to take any action. The Court stated that in other similar cases, companies made claims such as “100% recycled and recyclable bottles,” which is concrete and indicative of a promise to customers, as opposed to vague aspirational statements from Coca-Cola, such as the recyclable packaging by 2025.

ECOSChem Releases Sustainable Chemistry Report

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The Expert Committee on Sustainable Chemistry (ECOSChem) has released a report, Definition and Criteria for Sustainable Chemistry, which serves to provide a clear and actionable definition and set of criteria for sustainable chemistry. ECOSChem has aspirations that this definition and set of criteria will be adopted and adapted for uses such as policymaking, education, and investment decision-making and to guide chemical, material, process, and product design and implementation.

ECOSChem has defined sustainable chemistry as “the development and application of chemicals, chemical processes, and products that benefit current and future generations without harmful impacts to humans or ecosystems.” The report outlines numerous criteria which should be considered to achieve sustainable chemistry, although the report notes that sector-specific and chemistry-specific metrics and timeframes will need to be developed to make each of the criteria actionable. The criteria are as follows:

Equity and Justice

A sustainable chemical, material, process, product, or service will:

  • Be designed or implemented with authentic community engagement.
  • Be designed or implemented in a manner that does no harm when feasible and prioritizes the remediation of harm to communities that have been disproportionately impacted at any stage in the lifecycle of a chemical process or product.
  • Protect workers, marginalized groups, and vulnerable groups.
  • Be designed or implemented in a way that does not create new problems or shift harm.
  • Be designed or implemented in a way that supports local economies and ensures product access and affordability for marginalized groups.

Transparency

A sustainable chemical, material, process, product, or service will:

  • Make public health, safety, and environmental data an accessible format.
  • Include scientifically defensible and openly accessible verification for sustainability, health, safety, and other claims.
  • When possible, include a chain of custody so that chemicals and materials used in a product can be traceable throughout the lifecycle.

Health and Safety Impacts

A sustainable chemical, material, process, product, or service will:

  • Be without hazards, hazardous components, emissions, and toxic byproducts and breakdowns.
  • Not result in releases, including releases of persistent or bioaccumulative byproducts or breakdown products.

Climate and Ecosystem Impacts

A sustainable chemical, material, process, product, or service will:

  • Utilize renewable, non-toxic chemical building blocks.
  • Have no negative impacts on climate and biodiversity, including impacts on habitat and resource degradation.
  • Be without harmful releases to air, water, and land across its lifecycle, including for transportation and distribution.

Circularity

A sustainable chemical, material, process, product, or service will:

  • Be designed to have a lifetime appropriate to its use and enable safe reuse and non-toxic recycling.
  • Prioritize resource and energy efficiency, conservation, and reclamation, reduced consumption of finite resources, and waste prevention, minimization, and elimination.

There is no indication that this detailed and rigorous definition will be adopted or applied by any federal or state agencies.

EPA Releases Proposed Approach for Considering Cumulative Risks Under TSCA

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EPA recently released two documents regarding cumulative risk assessments under TSCA section 6, Draft Proposed Principles of Cumulative Risk Assessment Under the Toxic Substances Control Act, and Draft Proposed Approach for Cumulative Risk Assessment of High-priority Phthalates and Manufacturer-Requested Phthalate under the Toxic Substances Control Act. The first document details a set of principles for evaluating the cumulative risk of substances under TSCA; the second document presents a proposed approach for applying those principles to the evaluation of the cumulative risk posed by certain phthalate chemicals which are currently undergoing TSCA section 6 risk evaluation.

In the  Draft Proposed Principles of Cumulative Risk Assessment Under TSCA, EPA explained that it plans to alter its approach to individual substance evaluations under TSCA section 6 by taking a cumulative assessment approach when appropriate. Previously, the Agency looked at the risks posed by a single substance under its specific conditions of use. The Agency now intends to implement a new approach to evaluating human health effects, which it believes is more appropriate when considering human exposure to these substances. People are often exposed to many chemical substances with similar effects at the same time, and looking at the combined exposure health risk will paint a more complete picture. The Agency believes that this approach will allow for more effective mitigation of identified unreasonable risks and provide particularly useful information for communities that face higher than normal levels of chemical pollution.

Phthalates will be subjected to a cumulative risk assessment because the group of substances has similar effects on human health and has generally been found concurrently in the human body. The phthalates to be assessed as a group include DEHP, BBP, DBP, DIBP, DCHP, DINP, and DIDP. The chemical group is often used in industrial and consumer products to make plastics more flexible and durable. The draft proposal requests comment and peer review on its assessment that six phthalate substances are toxicologically similar, and the U.S. population is frequently co-exposed to these substances, making a cumulative risk assessment the most appropriate course of review action under TSCA.

The Agency is accepting comments on these documents through April 28, 2023.

Verdant Law Presents on Chemical Regulatory Framework and Implications for Product Design

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This month Verdant Law founder Phil Moffat traveled to Orlando, Florida, to present at the International Consumer Product Health and Safety Organization (ICPHSO) 2023 Annual Meeting and Training Symposium. Mr. Moffat’s presentation discussed the implications of chemical regulation for product design.

The presentation outlined recent trends in the chemical regulatory landscape, including EPA’s PFAS reporting rule, state regulations banning PFAS in children’s toys, flame retardants, and other products, and state PFAS labeling and reporting rules. The presentation discussed the risk of regrettable substitutions from both human health and environmental perspectives, as well as from a product efficiency perspective. (An example of decreased product efficiency could be removing PFAS used to waterproof a product may decrease the product’s efficiency if the replacement doesn’t repel water as well.) It also addressed risks associated with introducing multiple versions of the same product into commerce. In addition, Mr. Moffat covered risks of regulatory noncompliance, including penalties, seizures, recall, and market backlash, as well as risks of legal liability. The presentation recognized that the regulatory framework could be incredibly difficult for companies to navigate.

If you would like to view the presentation, it can be found here. For questions or assistance with regulatory compliance for consumer and industrial products, please contact Verdant Law.

EPA Issues SNUR for Inactive PFAS

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On January 26, 2023, EPA proposed a significant new use rule (SNUR) for PFAS substances that are currently classified as “inactive” on the TSCA Inventory. A substance is considered inactive on the TSCA Inventory when it has not been manufactured, imported, or processed in the U.S. since 2006. When the rule is finalized, anyone who wants to begin any manufacturing, importing, or processing activity involving any of these PFAS substances would be subject to the SNUR and would be required to obtain permission from EPA via a Significant New Use Notification (SNUN) at least 90 days before commencing the said activity. EPA would then review and make an affirmative determination as to whether the activity detailed in the SNUN presents an unreasonable risk to human health or the environment. EPA proposes some exceptions from the SNUR requirement, including when one of these PFAS are present as an impurity or byproduct and when the substances are imported or processed as part of an article.  Comments on the proposed rule are being accepted until March 27, 2023.

EPA to Begin Rulemaking to Regulate PFAS in Effluent Discharges

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EPA has announced that it will begin a rulemaking to regulate PFAS in landfill leachate discharges. Pursuant to the 2021 Preliminary Effluent Guidelines Program Plan, EPA has been collecting data on wastewater discharges from the Landfills Point Source Category (40 CFR part 445), with a focus on PFAS discharges. EPA refers to this data collection as the Landfill Leachate Detailed Study. The goals of the study were to understand the total number and location of landfills discharging leachate, characterize PFAS leachate effluent from regulated landfills, and identify current wastewater treatment technologies and management practices at these landfills.

Study results on effluent from 200 landfills revealed that 95 percent of the facilities discharged PFAS. The detections included 63 different PFAS with average concentrations for an individual compound as high as 14,000 part-per-trillion (ppt). This announcement was included in the Agency’s Effluent Guidelines Program Plan, which was released last month. The Effluent Guidelines Program Plan explains that

The details of the pending rulemaking and how the proposed rule could impact daily landfill operations are limited, but EPA commented that landfill operators are likely able to treat PFAS with technologies onsite. These technologies could include granular active carbon, ion exchange, and reverse osmosis. Further, the timing of the rule is uncertain as the Agency awaits other PFAS decisions, such as the anticipated regulation of PFAS designation as hazardous substances under RCRA and CERCLA.

Through the Effluent Guidelines Program Plan, the Agency is pursuing additional PFAS-related actions as well, including:

  • Data gathering on textile mills’ use and treatment of PFAS in the industry and associated PFAS discharges.
  • Initiation of a Publicly Owned Treatment Works (POTWs) Influent Study on PFAS, which will focus on gathering nationwide data on industrial discharges of PFAS to POTWs. The focus of the study will be to verify current sources of PFAS wastewater and document new PFAS water sources.
  • Continuing monitoring PFAS use and discharges from the Pulp, Paper, and Paperboard Category (40 CFR part 430).
  • Continuing monitoring of PFAS use and discharge at airports.

Shell Company Greenwashing Complaint Filed with SEC

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On February 1, 2023, Global Witness, an environmental justice-focused non-profit organization and a Shell shareholder, filed a complaint with the SEC’s Climate and ESG Task Force requesting the Agency investigate claims Shell has made regarding its renewable energy sources. The complaint alleges that Shell has materially misstated its financial commitment to renewable resources of energy by inflating the content of its new report,  “Renewables and Energy Solutions” (“RES”), reporting segment regarding fossil fuel activities.

Global Witness believes statements in the RES exaggerate the extent to which Shell is reducing its reliance on fossil fuels and investing in renewable energy sources. The non-profit states that while Shell claims to spend 12% ($2.4 billion) of its annual expenditure ($19.7 billion) on “Renewables and Energy Solutions,” actually, the company spends only 1.5% ($288 million) of its annual expenditure on true renewables (e.g., solar and wind power generation).  The complaint asserts that much of the RES designation is actually being diverted to investments in natural gas, which is neither renewable nor an energy solution.

In its complaint, Global Witness requests an SEC investigation into the following:

  • Whether the activities included in the RES segment have been properly reported under relevant accounting standards.
  • Whether including natural gas in RES without reporting how much spending Shell directs to gas has caused Shell to omit material facts necessary to its investors’ clear understanding of Shell’s purported energy transition.
  • Whether Shell’s reported capex on RES includes so much natural gas spending that labeling the segment “Renewables and Energy Solutions” constitutes a materially misleading misstatement.
  • Whether Shell is adequately disclosing its renewable energy investments in accordance with Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, which make it unlawful to issue materially misleading statements or omissions in connection with the purchase or sale of any security.

Global Witness further requests that if SEC finds that Shell is misstating or omitting material facts in its financial filings, the Commission issue appropriate enforcement action to ensure that Shell’s investors have access to the clear and comprehensive information they rely upon to inform their investment decisions.

Kraft Heinz Sued Over PFAS in Capri Sun Strawberry Kiwi Juice Drink

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A class action lawsuit has been filed against Kraft Heinz, alleging that the company’s “all natural” Capri Sun Strawberry Kiwi juice drink contains PFAS chemicals. The lawsuit alleges violations of New York Business laws against misleading business practices and false advertising, as well as breach of express warranty, fraud, constructive fraud, and unjust enrichment. It asserts that Kraft Heinz has engaged in false and misleading marketing by claiming that the drink is always made from “all natural ingredients,” “every ingredient in Capri Sun® is All Natural” and is a healthy choice for kids while failing to disclose the presence of PFAS.

The complaint alleges that Kraft Heinz is aware that consumers are willing to pay a premium for all-natural foods and that disclosing the presence of PFAS in its product would damage place in the market. Capri Sun ranks as one of the top products in the $1.5 billion juice box market, with the company touting its product as the “#1 Kids’ Favorite Juice Drink”. The lawsuit seeks to cover all persons in the United States who purchased the drink for personal use during the period allowed by law.

 

 

Thinx Settles Lawsuit Over PFAS in Products

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Thinx, a New York-based period underwear company, has reached a settlement in a class action lawsuit related to the presence of PFAS in its products. The company was sued for marketing misrepresentations under the Florida Deceptive and Unfair Practices Act, on behalf of the Florida class, and breach of express warranty, unjust enrichment, negligent misrepresentation, and fraud, on behalf of the nationwide class. Plaintiffs alleged that third-party testing revealed the presence of PFAS in Thinx products despite claims by the company that its products, collectively referred to as “Thinx Underwear,” are a safe, healthy and sustainable choice. For example, multiple pages on its website state that the underwear is free of harmful chemicals.

The complaint asserted that customers are willing to pay a premium for Thinx Underwear as opposed to using less expensive traditional feminine hygiene products because traditional products are known to contain a variety of chemicals, including VOCs.

Thinx has continued to insist that it has never intentionally added PFAS to any of its Thinx Underwear. But the settlement agreement requires the company to take a number of steps to ensure PFAS are not intentionally added to its underwear at any stage of production. The company must also modify marketing materials to disclose the use of anti-microbial treatments, and it may not refer to the anti-microbial components as “non-migratory.” In addition, the settlement agreement requires Thinx to enter into a raw materials code of conduct with its suppliers, which requires suppliers to attest that PFAS are not intentionally added to Thinx period underwear.

EPA Requests Comments on New Approach Methodologies (NAMs) White Paper

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EPA published a draft white paper, New Approach Methodologies (NAMs) in the Endocrine Disruptor Screening Program (EDSP) and is requesting public comment. The white paper was developed pursuant to the Federal Food, Drug, and Cosmetics Act (“FFDCA”), which requires EPA to develop a screening program to determine whether certain substances may have effects in humans that is similar to an effect produced by naturally occurring estrogen or other endocrine effects. The white paper states that some NAMs are acceptable alternatives for certain EDSP Tier 1 assays. Other NAMs may be useful for prioritization purposes and weight of evidence evaluations. The EPA press release discussing the draft white paper states that it will “reinvigorate [EPA’s] efforts to meet its requirement for EDSP screening of chemicals and continue to provide transparency of EDSP Tier 1 testing, which is the step in the EDSP that determines the potential for endocrine-disrupting effects and whether there is a need to obtain more data by requiring additional Tier 2 tests.” Tier 1 screenings are used to identify substances that have the potential to interact with the endocrine system, while Tier 2 screenings are used to identify adverse endocrine-related effects caused by a substance.

Currently, each chemical undergoing ESDP Tier 1 methods can take up to six years, and the cost to the industry of each chemical review is roughly $1 million, due significantly to vertebrate testing. Certain validated NAMs included in the white paper will allow EPA to use alternatives to vertebrate animal testing and other in vitro assays, ultimately allowing the Agency to review chemicals faster, more efficiently, and at a lower cost to the Agency.