California Governor Newsom Signs Laws Affecting Environmental Marketing Claims
On October 5, 2021, California Governor Gavin Newsom signed a package of environmental legislation into law, including two bills aimed at environmental marketing claims. SB 343, Truth in Labeling for Recyclable Materials, which we previously wrote about here, will significantly affect how recyclability claims can be made. Under AB 1201, compostable and degradable claim restrictions, which previously existed only for plastic products, will apply to all products.
SB 343: Recyclable, recycled content and use of the chasing arrows symbol
SB 343 is designed to restrict recyclability claims for both plastic and non-plastic products and packaging in the state, potentially as early as January 1, 2024, with some exceptions or defenses. The bill declares use of the chasing arrows symbol, the arrow design surrounding the plastic resin identification code (RIC) (which does not incorporate the Mobius loop design), or any other symbol or statement indicating recyclability, to be deceptive or misleading unless the product or packaging is considered recyclable pursuant to statewide recyclability criteria set out in the bill. Equally importantly, the law builds on previously existing requirements under Cal. Bus. & Prof. Code § 17580 that anyone representing in labeling or advertising that a product is not harmful or is beneficial to the environment must document and maintain written records supporting the validity of the representation. While these requirements previously applied to broad environmental claims such as “earth friendly” and “green product,” and while all non-puffery marketing claims should be substantiated, companies do not always maintain a substantiation file with all of the information required under Cal. Bus. & Prof. Code § 17580. By extending the documentation requirements to recyclable claims, the new law may make recyclable claims more difficult and put a larger spotlight on other claims.
A significant issue with the law is that it appears to be in conflict with both guidance from global self-regulatory bodies and the U.S. Federal Trade Commission’s (FTC) Guides for the Use of Environmental Marketing Claims (“Green Guides”). The Green Guides specifically address the use of the RIC, which is required by law in 39 states, noting that inconspicuous use of the RIC (for example, molded into the bottom of a rigid plastic container) does not constitute an unqualified recyclable claim. Conversely, a prominent depiction of the RIC, including in conjunction with a “recyclable” claim, would have to be qualified if the product made of the referenced plastic resin does not meet the criteria for an unqualified recyclable claim under the FTC’s existing guidance. Adding to the confusion, SB 343 recognizes compliance with the Guides for some claims as an affirmative defense.
An ASTM committee now oversees the RIC and recommends a solid triangle design. While state laws still reference the original RIC design with the arrow, it seems unlikely that adopting the solid triangle design would generate enforcement attention by state regulators.
Notably, the law’s restrictions on use of the chasing arrow symbol may affect not only the RIC, but also use of the Mobius loop to convey recycled content. The Green Guides already suggest qualifiers to convey recycled content and recyclable messaging, so using the Mobius loop’s chasing arrows to denote recycled material with an express statement of the percentage involved should not be a violation.
AB 1201: Compostable and degradable claims for products
Previously existing California law included some specific restrictions on the sale of plastic products advertised as compostable and degradable. The requirements were updated only a year ago to, among other changes, remove a reference to a test method for marine degradability, as we noted previously. AB 1201 replaces the term “plastic product” in California’s law restricting compostable and degradable claims and replaces it with “product,” giving the law broader reach. A “product” is defined to include, but is not limited to:
A consumer product;
A package or a packaging component;
A bag, sack, wrap, or other thin plastic sheet film product; and
A food or beverage container or a container component, including, but not limited to, a straw, lid, or utensil.
Fiber products that do not contain any plastics or polymers are exempt from the requirement to comply with an applicable standard specification; the legislation does not appear to distinguish between traditional plastics and bioplastics. The law does not change the requirement that biodegradable claims must meet a standard specified by the state, but the latest iteration still does not adopt a reference standard to determine degradability in soil, various landfill or marine conditions. Thus, AB 1201 effectively extends the prior practical ban on degradability claims for plastics to all products that meet the relevant definitions. Some national marketers that meet FTC criteria for degradability claims may include statements explaining that the product is not considered degradable in California.
AB 1201 also tightens requirements for a product labeled “compostable” or “home compostable,” which must:
Be certified as meeting the applicable standard specification by an approved third-party certification entity. This requirement will apply after January 1, 2024, if an approved third-party certification entity has existed for at least one year prior to the product being sold or offered for sale;
After January 1, 2026 (unless conditions for an extension apply), be “an allowable agricultural organic input under the requirements of the United States Department of Agriculture National Organic Program,” unless California’s Department of Resources Recycling and Recovery (“CalRecycle”) determines that it is possible to recover organic waste for use in agricultural applications from the collection of products that are not suitable for such application. In such case, products that are not collected for the purpose of recovering waste for agricultural applications are not subject to this requirement;
Not exceed 100 parts per million of total organic fluorine;
Be labeled to distinguish the product from a non-compostable product; and
Be “designed to be associated with the recovery of desirable organic wastes” unless CalRecycle determines that it is possible to recover organic waste for use in agricultural applications from the collection of products that are not suitable for such application.
This is the first example of a law that mandates third-party certification of an environmental claim or to legislatively incorporate chemical restrictions when making such a claim.
While it remains to be seen how the state will enforce these new legislative requirements, opponents have raised concerns. For example, it is feared that the restrictions in SB 343 will suppress recycling rates and actually result in more waste. The possibility of a First Amendment challenge exists for both laws, and SB 343’s restriction on importing a product into the state that does not comply also raises questions about whether such restriction is an unconstitutional burden on interstate commerce. Assuring that all claims, including environmental claims, are truthful and non-deceptive is a core value for responsible businesses, but national guidance, through instruments like the FTC Green Guides (which are slated for review in 2022), not a proliferation of conflicting state laws, are better for consumers and businesses alike.a