311: Green Marketing: Green Guides, Eco- Labels ... · PDF file311: Green Marketing: Green Guides, Eco-Labels, Litigation and Environmental Marketing Claims Laura Duncan Principal

ACC’s 2013 Annual Meeting October 27-30, Los Angeles, CA

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Monday, October 28 2:30 PM - 4:00 PM 311: Green Marketing: Green Guides, Eco-Labels, Litigation and Environmental Marketing Claims Laura Duncan Principal Beveridge & Diamond, P.C. Timothy Ernst Vice President, General Counsel & Secretary Del Monte Foods Meaghan Given Associate Corporate Counsel The Clorox Company Jennifer Morris Global SER & US EHS Counsel Hewlett-Packard Company

ACC's Annual Meeting 2013 October 27-30, Los Angeles, CA

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Faculty Biographies Session 311

Laura Duncan Laura Duncan is the co-chair of Beveridge & Diamond's Chemicals, Products, and Nanotechnology Committee. Ms. Duncan advises domestic and international clients on a variety of compliance, market access, and enforcement matters. A significant portion of her practice is focused on material restrictions, green chemistry, supply chain management, chemical/product registration, state product fees and take-back, pesticide mill taxes, consumer product safety, green marketing, product packaging and labeling, the U.S. Lacey Act and California Proposition 65 issues. Ms. Duncan has experience in handling actions before the federal Environmental Protection Agency, the U.S. Consumer Product Safety Commission, and California state agencies, including the Department of Pesticide Regulation, the Department of Toxic Substances Control, and the California Air Resources Board. Timothy Ernst Tim Ernst is vice president, general counsel and secretary of Del Monte Foods, one of the country's largest producers, distributors and marketers of premium quality, branded human and pet food products for the U.S. retail market, generating over $3.8 billion in net sales in fiscal 2013. With a powerful portfolio of brands, including Del Monte, Contadina, S&W, College Inn, Meow Mix, Kibbles 'n Bits, Milk-Bone, 9Lives, Pup-Peroni, Gravy Train, Nature's Recipe and Milo's Kitchen, Del Monte products are found in eight out of ten U.S. households. Among his various responsibilities, Mr. Ernst is responsible for providing legal counsel in connection with the company's sales, marketing and advertising efforts. Prior to joining Del Monte, he was in-house counsel at California and Hawaiian (C&H) Sugar Company and an associate with the San Francisco law firm of McCutchen, Doyle, Brown & Enersen. Mr. Ernst received his BA degree in Economics and History from the University of Wisconsin and his JD degree from the UCLA School of Law. He also studied law at the University of Wales in Cardiff, Wales. Meagan Given Associate Corporate Counsel The Clorox Company Jennifer Morris Jennifer Morris and her team of lawyers have international responsibly for Global Social and Environmental Responsibility issues arising from the sourcing, manufacture, distribution, sale and end of life for HP products. She regularly advises on and helps develop messaging about the social and environmental attributes of HP products (her


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perspective, not necessarily her client's!). She has recently replaced the word "no" with "I wouldn't consider that a best practice." When she isn't teasing her internal marketing clients, she focuses on materials restrictions, take back requirements, transboundary movement of waste, advocacy support for the development of thoughtful regulation of DRC conflict minerals and preparation for the related SEC filings. Ms. Morris also supports the HP EHS (Environmental, Health & Safety) organization. She has held a variety of roles at HP, providing advice and support at the BU, functional and country level. Prior to HP, she worked for Tandem Computers, Compaq Computers and IBM.


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Green%Marke)ng:%%Green%Guides,%

Eco4Labels,%Li)ga)on%and%

Environmental%Marke)ng%Claims%Presenters','in'order'of'appearance:'Meagan%Given,%The%Clorox%Company%

Tim%Ernst,%Del%Monte%Foods%

Jennifer%Morris,%HewleG4Packard%Company%

Laura%Duncan,%Beveridge%&%Diamond,%P.C.%(Moderator)%

Opening'Comments'

•  Greenwashing'•  The'Role'of'the'FTC'Green'Guides'•  Increased'FTC'Enforcement'•  The'Role'of'the'Na@onal'Adver@sing'Division'•  Li@ga@on'and'Enforcement'Under'State'Laws'•  Interna@onal'Frameworks'


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FTC'Green'Guides'

•  Selected'Issues'for'Discussion'– Cer@fica@on'and'Seals'– “Free'of”'Claims'– “Recyclable,”'“Biodegradable,”'“Compostable,”'and'“Made'with'Recycled'Materials”'Claims'

Cer@fica@ons'and'Seals'of'Approval'§260.6'•  It'is'decep@ve'to'misrepresent'directly'or'by'implica@on'

that'a'product,'package'or'service'has'been'endorsed''or'cer@fied'by'an'independent'third'party.'

•  A'marketer’s'use'of'the'name,'logo'or'seal'of'approval'of'a'thirdUparty'cer@fier'or'organiza@on'may'be'an'endorsement,'which'must'meet'the'requirements'of'the'FTC'Endorsement'Guides'(16'CFR'Part'255).'

•  Third'party'cer@fica@on'does'not'eliminate'the'need'to'ensure'that'all'claims'reasonably'communicated'by'the'cer@fica@on'are'substan@ated.'

'


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FTC'Endorsement'Guidelines''•  Endorsements'must'reflect'the'honest'findings'of'the'endorser'and'must'not'be'presented'out'of'context'or'in'a'way'so'as'to'distort'the'endorser’s'opinion.'

•  An'organiza@on’s'endorsement'must'be'reached'by'a'process'sufficient'to'ensure'that'the'endorsement'fairly'reflects'the'collec@ve'judgment'of'the'organiza@on.''

•  If'the'organiza@on'is'represented'as'being'expert,'then,'it'must'u@lize'an'expert'or'experts'recognized'as'such'by'the'organiza@on'or'standards'previously'adopted'by'the'organiza@on'and'suitable'for'judging'the'relevant'merits'of'such'products.'

Endorsement'Guidelines'–'Disclosure'of'Material'Connec@ons'

•  Where'there'exists'a'connec@on'between'the'endorser'and'the'adver@ser'that'might'materially'affect'the'weight'or'credibility'of'the'endorsement'(i.e.,'the'connec@on'is'not'reasonably'expected'by'the'audience),'such'connec@on'must'be'fully'disclosed.'

'


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Limita@ons'•  Marketers'should'not'use'environmental'cer@fica@ons'or'seals'that'don’t'clearly'convey'the'basis'for'the'cer@fica@on'because'the'seals'or'cer@fica@ons'are'likely'to'convey'general'environmental'benefits.'

•  To'avoid'decep@on,'marketers'should'use'clear'and'prominent'qualifying'language'that'conveys'that'the'cer@fica@on'or'seal'refers'only'to'specific'and'limited'benefits.'

•  Marketers'can'qualify'cer@fica@ons'based'on'acributes'that'are'too'numerous'to'disclose'by'saying'“Virtually'all'products'impact'the'environment.''For'details'on'which'acributes'we'evaluated,'go'to'[website].”'

Examples'•  An'adver@sement'for'paint'features'a'“GreenLogo”'seal'

and'the'statement'“GreenLogo'for'Environmental'Excellence.”'

•  A'product'features'a'seal'of'approval'from'the'“Forest'Products'Industry'Associa@on,”'an'industry'cer@fier'with'appropriate'exper@se'in'evalua@ng'the'environmental'acributes'of'paper'products.'

•  A'marketer’s'package'features'a'seal'of'approval'with'the'text'“Cer@fied'NonUToxic.”'

•  Great'Paper'Company'sells'photocopy'paper'with'packaging'that'has'a'seal'of'approval'from'the'“No'Chlorine'Products'Associa@on,”'a'nonUprofit'thirdUparty'associa@on.'


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“Free'of”'Claims'FTC%“Free%of”%Substan)a)on%Guidance%

A'truthful'claim'that'a'product,'package,'or'service'is'free'of,'or'does'not'contain'or'use,'a'substance'may'nevertheless'be'decep@ve'if:''(1) 'the'product,'package,'or'service'contains'or'uses''

'substances'that'pose'the'same'or'similar'environmental''risks'as'the'substance'that'is'not'present;'or''

(2)'the'substance'has'not'been'associated'with'the'product''category.'

“Free'of”'Claims'What%if%the%product%contains%a%!ny$amount$of%the%chemical?%

Depending'on'the'context,'a'freeUof'or'doesUnotUcontain'claim'is'appropriate'even'for'a'product,'package,'or'service'that'contains'or'uses'a'trace'amount'of'a'substance'if:''(1)  the'level'of'the'specified'substance'is'no'more'than'that'

which'would'be'found'as'an'acknowledged'trace'contaminant'or'background'level;''

(2)'the'substance’s'presence'does'not'cause'material'harm''that'consumers'typically'associate'with'that'substance;'

and''(3)'the'substance'has'not'been'added'inten@onally'to'the'

'product.'


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FTC%Has%Enforced%the%New%Requirements%–%Twice!%

In'October,'less'than'a'month'aier'the'Green'Guides'refresh,'FTC'announced'a'seclement'with'two'paint'companies'regarding'claims'that'certain'paints'had'zero'or'were'“free'of”'vola@le'organic'compounds'(“VOCs”).''The'base'paints'were'VOCUfree,'but'the'paints'purchased'by'most'consumers'contained'@n@ng'agents,'which'contain'VOCs.'

FTC%Has%Enforced%the%New%Requirements%–%Twice!%

In'July,'FTC'announced'a'seclement'with'three'macress'manufacturers'who'claimed'that'their'products'were'“VOCUfree”'or'“free'of'chemicals.”''


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“Recyclable,”'“Compostable,”'“Biodegradable,”'and'Related'Claims

•  Revised'FTC'Green'Guidance'•  FTC'Enforcement'•  State'Laws'

Na@onal'Adver@sing'Division'•  Compe@tors'may'also'challenge'environmental'claims'through'the'Na@onal'Adver@sing'Division'(“NAD”),'an'industryUself'regulatory'body.'– Will'inves@gate'a'complaint'about'a'company’s'marke@ng'prac@ces'(for'a'fee)'and'issue'recommenda@ons'to'the'challenged'company.'

– Not'legally'binding,'but'if'a'challenged'company'chooses'not'to'par@cipate'or'to'implement'the'recommenda@ons,'NAD'will'refer'the'inves@ga@on'to'the'FTC'for'regulatory'ac@on.'''''''


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Na@onal'Adver@sing'Division'''''''Pros%

• 'Substan@al'exper@se'• 'Large'body'of'decisions'• 'Rela@vely'quick'• 'Far'less'expensive'than'li@ga@on'Cons%

• 'Decisions'not'enforceable'• 'No'injunc@ve'relief;'damages'not'awarded'• 'No'discovery'• 'Cannot'confront'opponent'in'argument'• 'No'publicity'or'use'of'decision'compe@@vely'• 'Piggyback'class'ac@on'lawsuits''''''

NAD'and'the'Green'Guides'•  “More'important'than'the'FTC’s'enforcement'ac@ons,'the'Green'

Guides'will'be'used'by'NAD'…'to'secle'disputes'between'marketers'about'whether'a'claim'to'environmental'benefit'is'false'or'misleading.”'Annie'Mullin'and'Dan'Deeb,'Schiff'Hardin,'quoted'in'Forbes.com'10/01/2012.'

•  NAD'notes'that'“adver@sing'claims'for'environmental'benefits'can'influence'the'purchasing'decision'of'consumers,'yet'consumers'cannot'typically'verify'the'truth'of'environmental'claims.''As'a'result,'adver@sing'selfUregula@on'plays'an'important'role'in'ensuring'that'environmental'claims'are'truthful,'nonUmisleading'and'adequately'substan@ated.''(Generac'Power'Systems,'Inc.,'Case'No.'5506;'09/12/2012).'“In'evalua@ng'the'messages'conveyed'by'environmental'marke@ng'claims'and'the'sufficiency'of'the'suppor@ng'evidence,'NAD'has'accorded'great'weight'to'the'Green'Guides.”''(Pac@v'Corpora@on,'Case'No.'5472;'06/15/2012).'


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'Many'cases'involving'Green'Claims''''''

GreenPan%Inc.,%Thermolon™%Ceramic%Coated%Cookware%

Case%No.%5519;%10/31/2012;%Compliance%Proceeding%

3/26/13%Dupont,'maker'of'Teflon®'nonUs@ck'cookware,''challenged'certain'environmental,'green'and'safety'claims'made'by'GreenPan'for'its'Thermolon™'coated'cookware:'• '“Thermolon™/non0s1ck/ceramic/coa1ng/is/completely/PTFE0free,/contains/absolutely/no/silicone/oil/and/uses/no/PFOA/during/its/manufacture.”/• /“GreenPan™/products/are/healthy,/eco0friendly/and/provide/great/performance/and/convenience.”/• /“Less/energy/is/used/when/Thermolon™/is/applied/on/GreenPan™/products,/which/means/60%/less/CO2/emission/compared/with/the/produc1on/of/PTFE0coated/pans.”/• /“Safe/for/you/and/the/environment.”/• /“Please/recycle.”'''''


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NAD'asked'that'GreenPan'modify'or'discon@nue'its'claims:''''

•  “PTFEUFree”'and'“no'PFOA”'claims,'although'factually'correct,'reasonably'convey'to'consumers'that:''(1)'all'PTFE'nonUs@ck'coa@ngs'are'made'with'PFOA'and/or'are'less'safe'than'Thermolon'coa@ngs,'and'(2)'that'GreenPan'products'are'healthier,'safer'and'becer'for'the'environment.'

•  General'environmental'claims'could'not'be'supported.'•  Specific'environmental'claims'should'be'qualified'and'specific'

(e.g.,'60%'less'CO2'refers'only'to'the'“curing”'process).'•  “Please'Recycle”'implied'that'the'pan'was'recyclable;'in'fact'it'

is'only'the'packaging'that'was'recyclable.'•  Product'name'itself'(“GreenPan”)'is'okay,'absent'extrinsic'

evidence'that'consumers'have'been'confused'or'misled'(per'NAD'precedent).'

Generac%Power%Systems,%Inc.%Home%Stand4by%

Generators;%%Case%No.%5506;%09/12/12'' •  Generac'Power'Systems,'Inc.'adver@sed'its'home'standUby'

generators'as'“The/most/environmentally/friendly/generator/on/the/market/–/consumes/less/fuel/and/releases/fewer/emissions.”/

•  The'claim'was'not'supported'by'superior'fuel'consump@on'or'emissions'release'data.'

•  Rather,'the'Generac'generator'required'less'“exercise”'@me;'which'meant'it'would'burn'less'fuel'and'release'fewer'emissions'over'the'course'of'a'year.'


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NAD'recommended'that'the'claims'be'discon@nued:'

•  Generac'did'not'substan@ate'the'fuel'consump@on'and'emissions'claim'with'headUtoUhead'tes@ng.'

•  The'overall'impression'of'the'claims'is'that'the'generator'is'“environmentally'friendly.”''NAD'recognizes'that'products'that'consume'substan@al'amounts'of'power'cannot'accurately'characterize'themselves'as'“environmentally'friendly”'without'demonstra@ng'significant'environmental'benefits.''The'FTC'Green'Guides'counsel'adver@sers'not'to'overstate'the'environmental'benefits'of'a'product.'''

•  While'Generac'is'free'to'tout'the'shortened'exercise'cycle'of'its'generators,'NAD'recommended'that'Generac'discon@nue'claiming'its'generators'are'affirma@vely'environmentally'friendly.'

Pac)v%Corpora)on%Alterna)ve%Packaging%Products;%

Case%No.%5472;%06/15/2012%

•  EcoUProducts,'Inc.'challenged'B'to'B'claims'made'by'Pac@v'Corpora@on'for'a'wide'selec@on'of'products:'

•  “The/Paperboard/used/by/Pac1v/is/made/from/recyclable/paperboard/materials.”/

•  “Reduces/solid/waste/in/landfills.”/•  “All/Pac1v’s/clear/products/are/recyclable/where/#1/PET,/#5PP/

and/#7/is/accepted.”/•  Pac1v’s/polystyrene/foam/products/are/‘environmentally/

friendly.’”//


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NAD'approved'Pac@v’s'decision'to'discon@nue'the'claims'since'the'products'had'significant'limita@ons'on'their'recyclability:'

Ci@ng'the'Green'Guides,'NAD'stated'that'only'when'recycling'facili@es'are'available'to'a'“substan@al'majority'of'consumers'or'communi@es'where'the'item'is'sold,'can'marketers'make'unqualified'recyclable'claims.''Otherwise,'recyclable'claims'need'to'be'qualified.''Where'recycling'facili@es'are'available'to'less'than'a'significant'percentage'of'the'popula@on,'the'Guides'recommend'disclosing'these'limita@ons.”'

Apple%Inc.,%Apple%Notebooks%

Case%No.%5013;%06/03/2009%

•  “The/New/MacBooks.//The/world’s/greenest/family/of/notebooks.”/

•  Its/advanced/aluminum/and/glass/enclosure/is/completely/recyclable./

•  It/is/engineered/to/be/so/efficient,/it/runs/on/a/quarter/of/the/power/of/a/single/light/bulb./

•  And/it’s/made/without/many/of/the/harmful/toxins/found/in/computers/like/mercury./


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Apple%Inc.,%Apple%Notebooks%

Case%No.%5013;%06/03/2009%

•  Apple'based'its'claim'on'“gold”'ra@ngs'by'the'Electronic''Product'Environmental'Assessment'Tool'(“EPEAT”).'

•  The'challenger'–'Dell'–'was'not'so'much'upset'by'the'monadic'claims,'as'it'was'by'the'implied'superiority'claim;'that'Apple'notebooks'were'“greener”'than'Dell’s'computers,'which'had'also'received'EPEAT'“gold”'awards.'

•  NAD'said'that'the'Green'Guides'made'it'clear'that'unqualified'general'environmental'claims'were'poten@ally'misleading'and'difficult'to'interpret.'

•  NAD'found'that'EPEAT'Gold'status'did'demonstrate'a'posi@ve'assessment'of'the'overall'environmental'acributes'of'computer'products.'

•  However,'while'the'“green”'claim'was'jus@fied,'NAD'felt'Apple'went'a'bit'too'far'and'recommended'that'Apple'avoid'the'reference'to'“world’s'greenest”'given'the'poten@al'for'overstatement.'

State'Laws'and'Enforcement'

•  California'•  State'AG'and'County'DA'Enforcement'•  Plain@ffs’'Lawsuits'Under'State'Consumer'Protec@on'and'Unfair'Prac@ces'Laws'


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Countries%with%Environmental%Marke)ng%Laws/Guidance*%

Interna@onal'Frameworks'

*This'may'be'a'nonUexhaus@ve'list.''This'presenta@on'does'not'cons@tute'legal'advice.'

Interna)onal%Trends%&%Themes%

•  Good'news:''Guidance'starts'from'similar'principles'and'focuses'on'the'same'terms'and'underlying'concepts.'•  Claims'must'be'substan@ated''•  Claims'must'not'be'overstated'•  General'claims'of'environmental'benefit'are'

discouraged'•  There'can'be'a'difference'in'emphasis'and,'in'

some'cases,'there'is'different'guidance'for'certain'types'of'environmental'claims.'

•  Appear'to'be'differences'in'enforcement.'


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Interna)onal%Trends%&%Themes%

•  “Degradable”'Claims:'Only'United'States'requires'products'claimed'as'“degradable”'to'degrade'completely'within'one'year.'

•  Claims'of'“environmentally'friendly”'•  United'States:''claim'must'be'accompanied'by'

support'in'the'claim/not'a'footnote'(e.g.,'“environmentally'friendly,'50'mpg'highway”)'

•  Canada:''lifeUcycle'analysis'required'for'product'

•  Australia:''forbidden'

Hypothe)cal%Case:%%Product%X%

•  Can'you'market'Product'X'as'“environmentally'friendly”'on'your'website?'

•  What'safeguards'should'your'company'put'in'place'to'ensure'that'printed'materials'sent'to'New'Zealand'consumers'are'not'also'distributed'in'Australia?'

•  Can'you'reference'the'“environmentally'friendly”'Product'X'on'worldwide'corporate'sustainability'reports?'

Scenario:/You/conclude/that/Product/X/is/“environmentally/friendly”/in/the/U.S./but/not/Canada.//The/marke1ng/department/wants/to/adver1se/that/the/product/is/“environmentally/friendly”/in/as/many/jurisdic1ons/as/possible./

'


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Hot Spot: Brazil’s%Proposed%Greenwashing%Legisla)on%•  Late'last'year,'a'bill'was'introduced'in'Brazil'that'

would'require'companies'to'substan@ate'environmental'marke@ng'claims'on'their'websites.'

•  The'bill'would'impose'penal@es'–'including'fines,'product'confisca@on,'and'suspension'of'sales'–'on'companies'whose'claims'were'not'properly'substan@ated.'

Resources%•  FTC'Green'Guides,'16'C.F.R.'Part'260,'hcp://www.ic.gov/os/2012/10/greenguides.pdf''•  Interna@onal'Organiza@on'for'Standardiza@on'(ISO)'Standard'on'SelfUDeclared'Environmental'Claims,'ISO'14021:1999'

(available'for'a'fee'at'hcp://www.iso.org/iso/catalogue_detail.htm?csnumber=23146)'(see'also'2011'amendment)''•  European'Commission:'Guidelines'for'Making'and'Assessing'Environmental'Claims,'

hcp://ec.europa.eu/consumers/cons_safe/news/green/guidelines_en.pdf'(based'largely'on'ISO'Standard'14021:1999)'

•  Canada:'Environmental'Claims:'A'Guide'for'Industry'and'Adver@sers,'hcp://www.compe@@onbureau.gc.ca/eic/site/cbUbc.nsf/eng/02701.html'(based'largely'on'ISO'Standard'14021:1999)'

•  UK'Green'Claims'Guidance,'hcps://www.gov.uk/government/uploads/system/uploads/acachment_data/file/69301/pb13453UgreenUclaimsUguidance.pdf,'see'also'hcps://www.gov.uk/environmentalUclaimsUandUlabelsUguidanceUforUbusinesses'''

•  Australia'Green'Marke@ng'and'the'Trade'Prac@ces'Act'Guidance,'hcp://www.accc.gov.au/publica@ons/greenUmarke@ngUandUtheUaustralianUconsumerUlaw''

•  New'Zealand'Guidelines'for'Green'Marke@ng'and'Guidelines'for'Carbon'Claims,'hcp://www.comcom.govt.nz/fairUtrading/fairUtradingUdownloads/greenUmarke@ngUandUcarbonUclaims/''

•  Denmark'Environmental'and'Ethical'Marke@ng'Claims,'hcp://www.consumerombudsman.dk/RegulatoryUframework/dcoguides/EnvironmentalUandUethicalUmarke@ng''

•  Finland'Consumer'Ombudsman’s'Guidelines,'hcp://www.kulucajavirasto.fi/File/af79d071U4cddU4ac4Ub996Ud677356bb3|/The+use+of+environmentally+oriented+claims+in+marke@ng+.pdf''

•  OECD'Environmental'Claims:'Findings'and'Conclusions'of'the'OECD'Commicee'on'Consumer'Policy,'hcp://www.oecd.org/s@/consumer/48127506.pdf''

•  Interna@onal'Chamber'of'Commerce'Framework'for'Responsible'Environmental'Marke@ng'Communica@ons,'hcp://www.uscib.org/docs/icc_framework_on_environmental_marke@ng_claims.pdf''


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Ques@ons/Discussion'

Thank'You'Presenters:'Jennifer%Morris,%Global'SER'&'US'EHS'Counsel,'HewlecUPackard'Company''Tim%Ernst,%Vice'President,'General'Counsel'and'Secretary,'Del'Monte'Foods'Meagan%Given,%Associate'Corporate'Counsel,'The'Clorox'Company'

Moderator:'

Laura%Duncan,%Principal,'Beveridge'&'Diamond,'P.C.'''


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Documents

311: Green Marketing: Green Guides, Eco- Labels ... · PDF file311: Green Marketing: Green Guides, Eco-Labels, Litigation and Environmental Marketing Claims Laura Duncan Principal