In a pivotal moment for the food and beverage industry, Danone Waters of America faces a legal battle over its environmental claims on Evian bottled water, as a federal judge has recently denied the company’s attempt to dismiss a class action lawsuit. The suit accuses Danone of misleading consumers with the assertion that Evian is “carbon neutral,” a claim that the judge has deemed potentially deceptive.
The lawsuit, which was filed against Danone Waters of America in New York in 2022, has become a focal point for regulatory affairs experts and large consumer packaged goods (CPG) companies. The increasing scrutiny of environmental claims comes at a time when some industry giants, including Nestlé, are reportedly reconsidering the use of such terms. The case against Danone involves a “carbon neutral” claim that was certified by the Carbon Trust, a prominent third-party organization.
Plaintiffs in the case argue that the average consumer would interpret “carbon neutral” to mean that the product’s entire lifecycle—from the materials used, to production, to transportation—does not contribute to carbon emissions, thus not impacting the climate adversely. Danone, however, contends that this interpretation is unreasonable. The company maintains that no consumer would believe a product could be transported from the French Alps without generating any carbon dioxide. Danone further asserts that its packaging complies with the Federal Trade Commission’s (FTC) Green Guides, which encourage marketers to make specific environmental claims.
US District Judge Nelson S. Román, in his January 10 order, found that the term “carbon neutral” could indeed carry multiple meanings, including the possibility of zero carbon emissions, Danone’s definition of offsetting emissions, or even a third, undefined meaning. Given the term’s ambiguity, Román concluded that a jury should determine the outcome, rather than the court making a preemptive judgment.
In the face of these legal challenges, Danone Waters of America has not issued a response. The Evian website, however, states that the brand has achieved carbon neutrality by measuring and reducing its carbon emissions at each stage of the bottle’s life cycle, and offsetting the remaining emissions through tree planting initiatives with Livelihood Funds.
The lawsuit comes at a time when legal experts like David Kwasniewski, a partner at law firm BraunHagey & Borden, notice an uptick in greenwashing allegations. Kwasniewski highlighted the inherent risks in making carbon neutral claims, especially in the absence of a regulatory definition. He also pointed out the irony of bottled water companies claiming environmental stewardship, given the availability of tap water as a more sustainable option.
The term “carbon neutral” lacks a legal definition in the United States, and while the FTC’s Green Guides provide some guidance on carbon offsets, they stop short of defining terms like “carbon neutral” or “net zero.” This regulatory gap has created a complex landscape for manufacturers, particularly as the FTC considers updates to the Green Guides, which haven’t been revised since 2012.
Public comments to the FTC from organizations such as HowGood and the World Wildlife Fund have called for stricter regulations on carbon neutral claims, arguing that they should not be based entirely on offsets. The National Advertising Division (NAD) has also weighed in, suggesting that companies making environmental claims should be able to demonstrate a clear plan to achieve their goals.
As the case—Stephanie Dorris et al vs Danone Waters Of America—progresses, the outcome may set a precedent for how environmental claims are made and regulated in the CPG industry. It underscores the growing demand for transparency and accountability in corporate sustainability efforts, and could potentially lead to more stringent guidelines for environmental marketing claims in the future.