Consumers increasingly purchase products based in part on the environmental benefits claimed by advertisers. In a recent decision, the National Advertising Division (NAD) of BBB National Programs stated: “Consumers eager to reduce their impact on the environment can be misled by advertisers due to the complex nature of environmental benefit claims, ambiguous terms, and less than expert environmental knowledge.”
Net zero claims by JBS, the second-largest food company and the largest animal protein producer in the world, were challenged by the Institute for Agriculture and Trade Policy (IATP), a not-for-profit organization with the mission of working for fair and sustainable food, farm and trade systems. JBS has an extensive portfolio of brands, including Swift and Pilgrim’s Pride, that sell products to consumers in more than 190 countries throughout the world. JBS’ products include ground beef, fresh pork, bacon, poultry, lamb, seafood and meat-based snack products.
The challenged claims included:
- “JBS is committing to be net zero by 2040.”
- “Global Commitment to Achieve Net-Zero Greenhouse Gas Emissions by 2040.”
- “Bacon, chicken wings and steak with net zero emissions. It’s possible.”
- “Leading change across the food industry and achieving our goal of net zero by 2040 will be a challenge. Anything less is not an option.”
The NAD stated that the challenged claims “appear on multiple national advertising platforms, including websites, social media, newspapers, YouTube, and publicly accessible corporate reports.” The evidence presented by IATP in its challenge and reviewed by the NAD included a JBS Annual and Sustainability Report. Although the NAD has reviewed company data and statements in corporate annual reports in prior cases to determine whether an advertiser’s claims outside those reports were substantiated, this appears to be the first time that the NAD has indicated that claims made within corporate annual reports are considered advertising. This decision seems to be an expansion of the NAD’s scope of review to include claims made in corporate annual reports.
IATP argued that the claims are misleading because they convey the message that JBS has an operational plan in place to achieve its net zero goals and is implementing such a plan. For example, IATP argued that the claim “JBS is committing to be net zero by 2040” is definitive and creates the net impression that JBS is “actively reducing its emissions and building more sustainable operations” to be net zero by 2040.
JBS argued that the claims are aspirational and are intended to communicate the message that it has set a goal to achieve net zero emissions by 2040. It argued that the claims are not intended to convey a message that the aspirational future benefits from JBS are presently available to consumers. JBS provided evidence of a preliminary investment toward reducing emissions by 2040, including steps toward each of the stated net zero commitments.
The NAD has held in past cases that “when aspirational claims are tied to measurable outcomes, an advertiser must be able to demonstrate that its goals and aspirations are not merely illusory and to provide evidence of the steps it is taking to reach its stated goal.” In several recent cases involving aspirational claims, such as cases involving claims by Georgia-Pacific and Chipotle, the NAD found that the advertisers had supported their claims.
The NAD stated in this case, “Net zero is a recognized standard that guides companies in defining and establishing short and long-term science-based greenhouse gas emissions reductions goals which align with the Paris Agreement.” Since 2015, the global community has attempted to address environmental impacts by means of the Paris Agreement.
The NAD determined that JBS’ net zero claims “reasonably create consumer expectations that its efforts are providing environmental benefits, specifically net zero carbon emissions by a specified date, a measurable outcome.” While the NAD recognized that “the record provides evidence of a significant preliminary investment JBS has made toward reducing emissions by 2040,” it found that it “does not support the message conveyed by the claim that JBS has a plan it is implementing today to achieve net zero operational impact by 2040.”
Based on that determination, the NAD recommended that JBS discontinue each of the challenged net zero claims. However, the NAD stated: “Nothing in this decision precludes the advertiser from making narrower truthful and not misleading claims regarding its efforts at researching potential methods for reducing emissions and any efforts it is undertaking to reduce emissions.”
JBS announced that it is appealing the NAD’s decision to the National Advertising Review Board due to its disagreement that “the challenged aspirational claims communicate a message that it has a detailed plan in place today to achieve net zero by 2040—17 years from now.” JBS stated: “We continue to believe that the express messaging in the challenged claims, and our entire net zero by 2040 campaign, truthfully communicates our intent to achieve net zero emissions by 2040. The foundational work we have done to date substantiates those communications.”
Why It Matters
Advertising plays an important role in raising consumers’ consciousness about sustainability and informing consumers of a company’s environmental activities and commitments, as stated by the NAD in its decision. Net zero emissions claims and similar sustainability claims by advertisers have become increasingly prevalent. The principle stated by the NAD in this decision is important for advertisers to keep in mind in making aspirational net zero claims: “An aspirational ‘net zero’ claim reasonably creates high expectations on the part of consumers and requires significant evidence that the advertiser’s efforts are providing environmental benefits with a very specific measurable outcome.”
Additionally, where advertisers make such environmental claims is more important now than ever. Not only are claims in an advertiser’s consumer-facing materials under scrutiny, but claims made in the advertiser’s corporate reports are too. Advertisers would do well to ensure that all such claims made in public-facing materials are adequately substantiated.