These days, every product claim is under the spotlight. Whether you say your product is “organic,” “plant-based,” “recyclable,” or “made in the USA,” someone is paying attention—customers, regulators, even your competitors. And if a claim doesn’t hold up? The fallout can be brutal: lawsuits, fines, damaged reputation, and consumers who lose trust in your brand.

Here’s the kicker: most companies don’t set out to mislead anyone. The rules are just complicated, inconsistent, and always shifting. But the consequences don’t make exceptions. Even an honest mistake can put you in legal hot water and chip away at the trust you’ve worked so hard to build.

In a past post, we talked about greenwashing as an example of risky claims. This time, we’re zooming out. Why do all claims matter? How do you stay tuned into the regulations relevant to your industry? And most importantly—how can you protect your brand from unnecessary risk?

Understanding the Regulations

Governments and regulators have made it clear: misleading product claims will not be tolerated.

In the U.S., the FTC has suggested it will be updating its Green Guides to provide stricter direction on sustainability and environmental claims. And the FDA provides guidance on food claims.
The EU Green Claims Directive sets specific standards for how companies can market sustainability.
Australia, the UK, and Canada are actively investigating and penalizing misleading claims.
- The ACCC fined Clorox Australia A$8.25 million for misleading claims about its “GLAD to be Green” bags, falsely advertised as containing “50% Ocean Plastic.”
- The UK Advertising Standards Authority (ASA) recently ruled against OceanSaver Ltd., which claimed its cleaning products had “Zero Plastics.”
- After a complaint from the Watchdog organization Stand.earth, Canada’s Competition Bureau investigated Lululemon’s “Be Planet” campaign.

Why this matters:

Reputation: Consumers are quick to call out misleading claims on social media.
Financial liability: Lawsuits and fines can cost companies millions.
Competitive edge: Brands that comply stand out as credible leaders.

Action Step: Regularly audit all marketing claims against current regulations. Standards evolve quickly, and your messaging must keep pace. Contact Softly Solutions for an easy way to stay on top of the regulations specific to your industry.

Assessing Your Claims Risk

Every product claim carries a level of risk. Some are supported by clear evidence, while others are dangerously ambiguous.

High-risk claims include:

Broad terms like “eco-friendly” or “all natural” without supporting evidence.
- Read more about the risks of an All-Natural claim here.
Recycling claims that are technically true but not feasible for most consumers.
- Discover how to sidestep the greenwashing pitfalls of recyclability in our blog post on recyclability claims.
Offsetting or “carbon neutral” statements that rely on questionable offsets.
Green imagery, such as green leaves and logos.
- Explore more about the scrutiny surrounding green imagery here.

Lower-risk claims include:

Verified certifications such as EWG Verified or Global Organic Textiles Standard (GOTS).
- Discover how to safeguard your reputation against greenwashing by using sustainability certifications.
Transparent metrics (e.g., “Made with 60% recycled plastic”).

Action Step: Set up a complimentary meeting with Softly Solutions to help understand your greenwashing risk.

Companies Are Being Sued—This Is Real

The risks are not hypothetical. Companies have faced lawsuits and regulatory investigations, including the following, which have resulted in large fines and settlements:

Keurig settled a $10 million class-action lawsuit for labeling coffee pods as “recyclable” when most facilities could not process them.
Kohl’s paid a $2.5M settlement for falsely advertising its bamboo bedding as sustainable and environmentally friendly.
Williams-Sonoma was fined $3.17 million by the FTC—the largest penalty for a “Made in the USA” claim.

These examples show that misleading claims are not just bad PR—it is a legal liability.

Action Step: Before publishing any product claim, ask: “Could we defend this statement in court?” If the answer is no, do not use it.

Exercising Care With Product Claims

Accuracy in sustainability claims is non-negotiable. Vague or exaggerated wording can quickly be deemed deceptive.

Best practices:

Be specific: “Made with 30% post-consumer recycled content” is stronger than “made with recycled material.”
Verify: Use third-party certifications and maintain records of compliance.
Communicate clearly: Avoid technical jargon or overcomplicated explanations.

Action Step: Establish a cross-functional review process that includes Marketing, Legal, Compliance, and Sustainability teams to vet all claims before release.

Who’s on the Hook

Greenwashing risks affect more than just the marketing department. Awareness must extend across the organization:

Marketing & Communications – to ensure accurate messaging.
Legal & Compliance – to assess regulatory alignment.
Executive Leadership – to safeguard reputation and brand value.
Sustainability Teams – to provide verified data and certifications.
Product Development – to ensure design choices support claims.

Action Step: Hold quarterly workshops or check-ins across teams to align on sustainability claims and compliance updates.

Which sustainability claim have you seen recently that seemed too good to be true?

Conclusion: Protect Your Brand Through Accuracy

Greenwashing and product claim risks are escalating as regulators, courts, and consumers pay closer attention to these claims. Knowing the regulations, understanding your risk profile, recognizing that lawsuits are a real possibility, and carefully reviewing all claims are essential steps for protecting your brand.

Authenticity is not just the ethical choice—it is the profitable one. Customers reward transparency and consistency. Missteps, however, can damage trust that may take years to rebuild.

Call to Action

Start your product claim audit today. Align your marketing with regulations and verify your data to showcase your brand’s credibility and innovation. Set up a no-cost meeting with Softly Solutions to gain insights into the environmental risks associated with your project or investment.

References

This article was created with the assistance of OpenAI’s ChatGPT and may contain AI-generated content.

Information provided is for general purposes only and not legal advice; consult a qualified attorney for personalized guidance. Softly disclaims any liability for actions based on this information.

The Truth About Product Claims: Why Even Honest Mistakes Hurt