You Claim It’s Green. Prove It.—A Conversation with Daniel Reis Nobre

Daniel Reis Nobre (Inventa, Angola)

In the race to adopt eco-friendly practices, businesses increasingly brand themselves as sustainable and environmentally conscious. However, this green shift has also increased unfair competition, impacting intellectual property (IP) and brand integrity.

Daniel Reis Nobre (Inventa, Angola) will moderate a session entitled Green Gambits: Unfair Competition in the Eco-Friendly Era at the upcoming 2024 Leadership Meeting, taking place from November 12 to 15 in New Orleans, Louisiana, USA. This discussion will shed light on the various tactics companies use to gain an edge under the guise of sustainability, including greenwashing, making misleading claims, and exploiting eco-friendly certifications. The panelists will explore how these practices affect trademarks and other IP rights, brand reputation, and consumer trust. Additionally, the session will examine the legal landscape surrounding these issues, including recent developments on sustainability-related legislation in the European Union, the United States and other jurisdictions, and its impact on brands and IP.

Mr. Nobre recently sat down with the INTA Bulletin to explain the link between unfair competition and false or misleading eco-friendly claims and to share his insight on new regulatory efforts to combat greenwashing.

Mr. Nobre, you will be moderating a panel at the 2024 Leadership Meeting entitled “Green Gambits: Unfair Competition in the Eco-Friendly Era.” Please provide an overview of what registrants can expect to learn from this discussion.
Sustainability has never been in the spotlight the way it has in recent years. Words like “organic,” “natural,” “compostable,” “eco-friendly,” etc., are now part of our lives and appear in front of us in advertisements on TV, the Internet, and billboards, and on product labels and packaging. But with this comes both the best and the worst practices from different companies and brands. Consumers are looking for products that are better for our environment, for society, and for our planet. Meeting that demand requires transparency on product labels and advertisements.

On the other hand, brand owners are becoming more concerned every day about being sustainable and showing that their efforts align with consumers’ values and our planet’s best interests. But, unfortunately, not all brands are truthful about their efforts. Greenwashing is a growing problem globally, and many of the sustainability-related claims that we see on advertisements or product labels are in fact misleading or false.

Some governments have recently begun looking at sustainability claims and adapting the legal landscape to align with the best practices that stakeholders should follow in a more transparent and fairer environment. Our discussion will look at these variables with a focus on the impact on brands.

Please explain how false or misleading eco-friendly claims manifest into unfair competition  practices.
We’re living in an era where green marketing has become a necessity for some companies and brands to keep up with the competition. But the use of environmental claims is something that must be taken seriously. It should be supported by evidence and ultimately must be certified by trusted third parties. Unfortunately, that’s not what’s been happening in the environmentally unfriendly world we live in.

Some businesses and brands undertake greenwashing practices using false or misleading sustainability claims to promote their products or services in an attempt to attract customers who are looking to make sustainable consumption choices. These businesses sometimes invest more resources on their green marketing activities than their environmentally conscious practices, which are sometimes nonexistent.

Another growing issue is green hushing, where businesses deliberately withhold their own environmental goals and commitments to avoid being in the spotlight, and to hide from criticism from their little or nonexistent efforts towards sustainability.

These practices are unfair to customers and to other businesses and brands who are doing what they’re supposed to do: being transparent about their sustainability commitments, investing resources to protect our environment, and using real and verifiable green claims on their labels and in their advertisements.

What is the impact of sustainability-related unfair competition practices on a company’s trademarks and brands?
It could become a big problem for such companies. It’s easy and tempting to simply appear to be environmentally conscious, but deploying greenwashing practices in marketing strategies can call more attention and scrutiny from regulatory authorities. This also applies to trademarks. The IP system already discourages greenwashing practices.

Green trademark filings have been increasing every year, but applicants must be aware of using sustainability-related claims on the marks they apply to register. Trademarks can’t be misleading or deceptive to the public, and such filings can end up being refused registration if they’re found deceptive or even being canceled after registration if the use of such trademarks can be found misleading to the public.

Also, green trademarks describing a product as organic, natural, or eco-friendly, for example, can be found nondistinctive or descriptive of the nature of their goods, which could also lead to a refusal.

Marketing departments should work closely with their IP counsel to prevent these legal pitfalls that could deliberately damage the company’s brands and trademarks.

In a global survey conducted by McKinsey & Co., 66 percent of respondents (and 75 percent of millennial respondents) said they consider sustainability when they make a purchase. They are aligning themselves with brands that are compatible with their values and priorities. How savvy are consumers today when it comes to spotting false or misleading green claims?
Consumer trust is influenced by a company’s sustainable commitments. Nowadays, consumers are way better informed when it comes to making sustainable choices. They want to become more environmentally conscious, and that’s especially true of the younger generations. Consumers are adapting to a more sustainable lifestyle, choosing more sustainable products or packaging, or choosing goods that are more durable and that can be repaired and reused more easily. Consumers are even buying and selling more secondhand goods. The throwaway lifestyle is disappearing. All these examples show that the attitudes of consumers towards sustainability are rapidly changing.

Companies and brands should be aware that this trend will continue to grow, and consumers are paying more attention to green advertisements and considering whether products are labeled as responsibly sourced or manufactured. Brands also need to consider the balance between consumer affordability and environmental impact. Usually, sustainable products are more expensive, and although consumers are willing to pay more for sustainable choices, price is still a big barrier. Brand owners need to consider prioritizing sustainability to create value. They should bring circularity into their value chain. They must lead this green shift in their business sector and get ahead of regulatory changes. This will build trust with environmentally conscious consumers.

Your session will also delve into the legal landscape surrounding unfair competition in the eco-friendly space. Generally speaking, what steps are governments taking to address this issue?
This issue has not been successfully addressed yet in most jurisdictions. The best protection in many places are general consumer protection laws, as well as regulations relating to misleading advertisements.

Some governments have begun changing laws and regulations or creating new ones to better address this issue. The EU recently launched a new Empowering Consumers Directive and the Green Claims Directive specifically to address sustainability-related matters. They set a number of new rules that companies and brands will need to follow, particularly on business-to-consumer communications, such as providing evidence for any green claims on products or advertisements; as well as requirements for green claims to be previously approved by third parties, verification schemes, or public authorities; a ban on self-certification; mandatory information about the durability and repairability of goods; a ban on vague environmental claims about an entire product, when, in fact, the claim only concerns certain aspects of the product; and others that will have an impact soon.

Other jurisdictions are also taking steps to address this issue. For example, in the U.S., the Federal Trade Commission (FTC) is currently reviewing the FTC Green Guides, which were last updated in 2012. In the United Kingdom, the Competition and Markets Authority has launched a Green Claims Code. In 2021, the Australian Competition and Consumer Commission published guidance on making environmental claims. However, these examples are not law and are not directly enforceable. They serve more as guidelines to formulate green claims, unlike the new EU directives that aim to transpose into national laws in all EU member states. Companies and brands should be aware of these changes.

 How do you see this trend evolving? Any final thoughts?
The fight against greenwashing is of extreme importance because these companies can cause harm to our planet through raising pollution levels, reducing the availability of natural resources, or increasing greenhouse gas emissions. This is a global problem and the world needs to unite to fight it. I believe the changes in the EU will lead more jurisdictions to apply stricter rules and laws towards regulating sustainability and environmental claims. This may be the beginning of the end for greenwashing. If you claim something’s green, you’re going to have to prove it!

Learn more and register for the 2024 Leadership Meeting.

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