The following is for informational purposes only. It is not legal advice nor is it intended to create a attorney-client relationship. For questions about the law, please consult your own legal counsel.
I. Introduction
Certification is most often viewed as a means of conveying a company’s commitment to a certain value or standard. It provides a way to communicate to consumers or potential customers that the product or service meets specific criteria. Compostability certification, for example, communicates the product maker’s commitment to sustainable environmental practices. However, certification serves not only as a marketing tool but also as a proactive legal and regulatory risk management strategy.
II. The Legal Function of Certification
The value of certification as a risk management and mitigation strategy is often overlooked. The certification process can reveal weaknesses, confirm alignment with industry standards, provide evidence of due diligence, and position the brand within industry norms.
Risk presents in a multitude of ways with a broad range of potential impacts. Pertinent in the certification realm is the communication function, often in the context of a broader marketing and public relations strategy. Communications that imply fact present risks of violating regulation or misleading consumers. Establishing evidence and rationale for making fact-based claims is vital insurance against these threats.
There are two primary means by which false or misleading claims are challenged: regulation and civil litigation. Each presents unique considerations and requirements in the risk management context.
III. FTC Green Guides and Litigation Risk
Federal Trade Commission has promulgated guidance for making environmental claims in the Guides for the Use of Environmental Marketing Claims, more commonly referred to as the “Green Guides” 16 C.F.R. pt. 260 (2023). These Guides do not, in themselves, have the force of law, but the FTC can take administrative action under § 5 of the Federal Trade Commission Act, 15 U.S.C. § 45 (2023) if they can show that the claim was unfair or deceptive. Specifically:
§ 260.7 Compostable Claims.
(a) It is deceptive to misrepresent, directly or by implication, that a product or package is compostable.
(b) A marketer claiming that an item is compostable should have competent and reliable scientific evidence that all the materials in the item will break down into, or otherwise become part of, usable compost (e.g., soil-conditioning material, mulch) in a safe and timely manner (i.e., in approximately the same time as the materials with which it is composted) in an appropriate composting facility, or in a home compost pile or device.
(c) A marketer should clearly and prominently qualify compostable claims to the extent necessary to avoid deception if:
(1) The item cannot be composted safely or in a timely manner in a home compost pile or device; or
(2) The claim misleads reasonable consumers about the environmental benefit provided when the item is disposed of in a landfill.
(d) To avoid deception about the limited availability of municipal or institutional composting facilities, a marketer should clearly and prominently qualify compostable claims if such facilities are not available to a substantial majority of consumers or communities where the item is sold.
As a threshold matter, certification confirms that claims of compostability are not intended to mislead the consumer (§260.7(a)). This section focuses on the intent of the presentation of a product rather than on specific scientific evidence. The act of seeking out external confirmation of a claim is itself evidence of the lack of intent to mislead.
Section 260.7(b) requires documentation to show the marketing claims are based on scientific evidence. This must include
competent and reliable scientific evidence that all the materials in the item will break down into, or otherwise become part of, usable compost (e.g., soil-conditioning material, mulch) in a safe and timely manner (i.e., in approximately the same time as the materials with which it is composted) in an appropriate composting facility, or in a home compost pile or device.
16 C.F.R. § 260.7(b) (2023)
This definition presents significant ambiguities and potential interpretational conflicts. What qualifies as “competent and reliable scientific evidence”? Is laboratory testing sufficient to show that the material breaks down “in an appropriate composting facility, or in a home compost pile or device”? What does “approximately the same time as the materials with which it is composted” mean? Does “break down into, or otherwise become part of, usable compost” mean 100% of the product does so, or are microscopic remnants acceptable? These ambiguities suggest that manufacturers should consult their own legal counsel before making compostability or any environmental claim.
The term “compostable” itself is subject to many interpretations. Definitions have been codified into law, are contained in the Green Guides, and courts may use the consumer’s reasonable belief about what it means to be “compostable.” Therefore, it behooves the manufacturer to use the most conservative definition possible to ensure they are meeting the highest standards.
“(B)reak down into, or otherwise become part of, usable compost” is being interpreted to include the microscopic level. This is the precise basis on which litigation has been undertaken relative to PFAS in some jurisdictions. Many lawsuits are basing their causes of action upon a detailed and strict reading of the Green Guides and other statutes. They rely on state consumer protection laws to bring the lawsuit and cite to the Green Guides, as well as state law, as the measure of a deceptive claim.
Consumer protection laws, present in virtually every state, are designed to provide consumers with recourse and remedy when a business acts in an unfair or deceptive manner. When regulations do not exist or are not enforced, consumer protection laws are available to provide a means of compensating for harm but also as a means to stop bad actors in the marketplace. When breaking the law becomes more costly than following the law, bad actors have financial motivation to change their ways.
Defending against claims of unfair or deceptive practices, like the above, requires more than a bare statement that there is no ill intent, and that the manufacturer’s representatives subjectively believe the product is compostable. It requires evidence of compliance with the applicable definition as well as evidence demonstrating that the manufacturer is complying with industry-accepted standards.
IV. Benefits of Third-Party Certification
Even well-intentioned organizations face documentation gaps and communication breakdowns. Certification provides a structured process to confirm that documentation is complete and externally communicable.
Lack of documentation to support a claim or position can arise from a failure of the product to achieve one or more elements necessary to achieve certification. In a field in which others have met all criteria, finding an area of weakness can provide a manufacturer with an opportunity to focus remedial measures and take corrective action to ensure the product is not falling behind competitors.
Most importantly in the compostability realm, certification provides confirmation that the product has met widely accepted standards for safety and efficacy. This function is increasingly important as state laws evolve. Some states require specific attributes to label a product “compostable” and have implemented enforcement schemes. As part of their requirements, some states require third-party certification for any product claiming compostability (see Wash. Rev. Code § 70A.455.090 (2023)). In the consumer protection context, certification is an important affirmation in an environment in which consumers are increasingly aware of the health threats of unseen particles such as PFAS and microplastics.
Third-party certification is not uniform, however. There are differences in interpretation of the foundational standards such as ASTM. The perspective from which the certifier views and uses these standards is important to understand from a risk management perspective. While differing
interpretations may be valid and expected, choosing the awareness of these differences can maximize the efficacy of certification as a risk management strategy.
From the perspective of the compost manufacturer, CMA interprets the standards conservatively. We are committed to supporting the industry to achieve the highest standards possible and encouraging continual improvement of these standards over time. From our perspective, to do any less risks future repercussions in the form of litigation over contamination and unforeseen consequences of adopting a “good enough” attitude.
V. Limits and Evaluation of Certification
In the US, the ASTM standards are widely used as the basis for certification. ASTM D6400, D6868 and D8410 address baseline criteria for compostability. Laboratory standards are vital to ensure products are not contaminating the compost with toxic chemicals and will not affect the beneficial use of the product. However, not every aspect of compostability in the broader context of consumers and composting facilities is captured by these laboratory standards. The perspectives of consumers and of compost facility operators should be considered when assessing risk.
At CMA, products must meet the ASTM standards but must also pass field disintegration testing to achieve certification. To many composters, this is the criteria by which they consider an item compostable in their facility. This is the fundamental reason CMA came into being – composters wanted a standard that met their practical criteria for acceptance.
Ask a consumer what they think makes something compostable and they are unlikely to mention ASTM standards. There may be variance among consumers, but there will likely be commonalities that encompass the ability of the product to turn into compost and to do so safely. Considering the basis of many state laws and consumer protection actions is squarely viewed from the perspective of the consumer, manufacturers ignore the consumer perspective at their peril. Accepting laboratory standards as the sole basis on which to claim compostability may, in the end, be insufficient. Laboratory standards should be the starting point from a risk management perspective.
Where there are external, consensus-based standards, like ASTM, there is a predictable path to and parameters for certification. However, certification can go beyond the external standards. There is currently no consensus-based standard for compostability for disintegration of the product in a commercial compost setting. CMA has developed criteria, in conjunction with compost manufacturers, that are applied to CMA certified products.
There is no specific, generally accepted standard for testing for PFAS. Direct testing for PFAS is prohibitively expensive and impractical. Therefore, total fluorine testing is used as a proxy for PFAS testing. While certifiers now require total fluorine testing to achieve certification, there is no consensus-based standard method for this testing. Varied methods can result in varied results, a dangerous situation when managing risk. As a result, CMA requires total fluorine testing by a specific preparation method that has been developed and vetted by numerous labs and experts.
The presence of PFAS in compostable products is the basis of significant litigation (see above). This is an area in which using the best available, evidence-based method is vital. Litigation requires (expensive) expert testimony and evidence to support one’s position. Risk management should include an evaluation of the evidence at your disposal in a litigation context.
VI. The Disclaimer
Regardless of the certification scheme, the product manufacturer remains solely responsible for evaluating their products, claims and risks. Certification can be evidence of due diligence and meeting industry standards but does not guarantee or warrant that the product complies with any particular law or legal standard. The product manufacturer must use certification as one part of an overall risk mitigation strategy.
VII. Conclusion
In an environment of increasing scrutiny and low consumer and composter trust, evaluating and mitigating risk is vital to avoid regulatory enforcement and litigation. Should a manufacturer find itself in such a position, solid evidence will go a long way to supporting the company’s argument. Certification, with an eye on evaluating what the certification itself can provide, can be compelling evidence of the company’s commitment to achieving the highest standards.