Organizations or all types and sizes are adopting policies to provide standards for environmental responsibility and sustainability initiatives. But adopting green policies may impose risks on your organization if the policies are not properly followed.
Perkins Coie published a piece on these risks and issues: Green Policies – Understanding and Addressing Compliance Risks.
False Advertising.
Your company can be held liable for making a false statement about your sustainability efforts. Just ask Nike. There is also the Lanham Act and the ability of competitors to sue your company for false or misleading representations in advertising of goods, services or commercial activities.
FTC Regulations.
The FTC has published its Guide for the Use of Environmental Marketing Claims. These have teeth. The FTC sued Kmart, claiming that Kmart had made false and unsubstantiated claims that its private-label paper products were biodegradable.
Investor Risk.
Corporate environmental practices have attracted increased attention from shareholders of public companies. Just ask Exxon-Mobil. I have not yet seen a meaningful shareholder suit for failing to follow a sustainability policy. But it may happen.
Contract Misrepresentation.
You need to know what you are. If you make a contractual obligation that a property is LEED certified or meet some other environmental standard, that obviously needs to be true. Otherwise you are exposing yourself for breach of contract.
References:
- Green Policies – Understanding and Addressing Compliance Risks by Perkins Coie
- Kasky v. Nike California Supreme Court case
- Nike v. Kasky Supreme Court denial of certiorari
- Nike and the Free-Speech Knot by Eugen Volokh
- FTC’s Guide for the Use of Environmental Marketing Claims.
- In the Matter of Kmart Corporation, a corporation. FTC File No. 082 3186
Disclosure: Perkins Coie just signed a big lease renewal in one of my company’s properties. Perkins Coie renews huge downtown Seattle lease.
