NAD Refers Claims Made by LEI, Maker of Eco Alkaline Batteries, to FTC for Further Review

New York, NY – March. 21, 2016 – The National Advertising Division has referred certain advertising claims made by LEI Electronics Inc., the maker of Eco Alkalines brand batteries, to the Federal Trade Commission (FTC) for further review, following the advertiser’s assertion that it would not comply with certain of NAD’s recommendations.

NAD is an investigative unit of the advertising industry’s system of self-regulation. It is administered by the Council of Better Business Bureaus.

Energizer Brands LLC, a maker of competing batteries, challenged a wide range of advertising claims that promoted the environmental benefits of LEI’s products. The claims  at issue in NAD’s review were made at the advertiser’s website, in an Internet commercial, and on product packaging.

In response to NAD’s inquiry, the advertiser said that it had permanently discontinued the challenged commercial, which had been posted to its website and YouTube channel.

A key issue for NAD was consideration of the advertiser’s carbon neutrality claims. The advertiser stated on its website that “every purchase is carbon neutral” and that “by purchasing Eco Alkalines batteries, you’re doing your part to reduce the CO2 and climate change impact brought about by the production, distribution, and disposal of alkaline batteries.” The website made the additional claim that the product is a “100% carbon neutral alkaline battery.”

NAD noted that the FTC’s Green Guides state that an advertiser should not make a carbon offset claim unless the emission reductions “have already occurred or will occur in the immediate future.” Absent that, the advertiser “should clearly and prominently disclose if  the carbon offset represents emission reductions that will not occur for two years or longer.” In support of its claim that its batteries are carbon neutral, the advertiser relied on certifications from third parties – Carbonfund.org and CarboNZero – and a life cycle assessment (LCA) that calculated the batteries’ carbon footprint.

The Green Guides note that “third-party certification does not eliminate a marketer’s obligation to ensure that it has substantiation for all claims reasonably communicated by the certification.” An advertiser must still have competent and reliable scientific evidence in order to substantiate environmental claims in its advertising. Thus, NAD determined that  the Carbonfund.org and CarboNZero certifications, by themselves, were insufficient to substantiate the advertiser’s carbon neutral or carbon offset claims.

Although the advertiser presented evidence about the types of projects supported by its carbon offset purchases and how much of the advertiser’s contributions were allocated to each project, no information was provided to NAD about when the reductions occurred or will occur. For example, some of the advertiser’s carbon offsets support reforestation projects, but no evidence was provided showing when and how new trees would grow and recapture carbon dioxide.

Regarding the LCA, NAD noted its concern about the LCA’s reliability and whether the calculated carbon footprint was accurate. The LCA did not include U.S. distribution or recycling and was instead limited to Canada. NAD recommended the advertiser discontinue its carbon-offset claims.

LEI noted in its advertiser’s statement the steps it has taken to comply with certain of NAD’s recommendations.

However, the company said, “LEI refuses to discontinue its claim that its EcoAlkalines batteries are carbon neutral. LEI has paid the membership fee for the Carbonfund.org program and have presented certificates that demonstrated our financial contribution to offset carbon emissions. The Certified Carbonfree Products program complies with the FTC Green Guides in that the carbon offsets to neutralize the registered batteries’ assessed carbon footprints are purchased and retired quarterly, based on quarterly sales data for each registered battery unit, and that the registered batteries’ carbon footprints are established by competent and reliable scientific analysis, in the form of Life Cycle Assessments (LCAs). The LCAs were performed by third-party professional sustainability consulting organizations (in 2009 and again in 2014), in accordance with the PAS 2050:2011 Specification for the assessment of the life cycle greenhouse gas emissions of goods and services.”

Given the advertiser’s stance, NAD has referred LEI’s claims to the FTC for further review.