As the leaves begin turning colors for the fall, the Federal Trade Commission (“FTC”) is turning green. Specifically, on October 1st, the FTC released its revisions to its Guides for the Use of Environmental Marketing Claims (commonly known as “Green Guides”). As you may recall from our earlier alert, the FTC previously released a request for public comments for its proposed revisions to the Green Guides. After reviewing thousands of public comments, the FTC has now released the revised Green Guides.
The Green Guides provide some requirements for a broad span of environmental advertising claims, as well as guidance on several specific areas. Overall, the Green Guides encourage marketers to avoid deception when making environmental claims about their products. Environmental benefits should not be overstated or misleading. Marketers are reminded that advertising claims must be substantiated and any qualifications or disclosures should be presented in a “clear, prominent, and understandable” way. Further, where it cannot be determined if a claim refers to a product’s packaging or to the product itself, the claim may be viewed as referring to both and should be clarified if that is not the case.
In addition to the broad guidance described above, the Green Guides also present specific guidance related to a number of categories of claims. Such categories include the following:
General Environmental Benefit Claims
The Green Guides caution against making general environmental benefit claims because they convey a wide range of meanings, are difficult for consumers to interpret, and very difficult for marketers to substantiate. Examples of such claims include words such as “eco-friendly,” “eco-smart,” and “green.” Before using such terms, the Green Guides caution marketers that the terms should be qualified. As an example, the FTC indicates that a properly qualified statement might be, “Eco-friendly: made with recycled materials” as long as the statement is clear, substantiated, doesn’t mislead consumers about the overall environmental impact of the product, and the context is not deceptive.
The Green Guides encourage carbon offset sellers to use “competent and reliable scientific and accounting methods” to properly convey their emission reductions and to avoid selling the same reduction more than once. Further, those marketers making claims about their purchased carbon offsets and emission reductions should avoid deceptive claims regarding when the emission reduction will or has occurred and should provide a clear disclosure where an offset will not occur for a period of two years or more. Additionally, marketers must not advertise carbon offset purchases where the emission reduction is required by law.
Certifications & Seals of Approval
The most important thing to remember with certifications and seals of approval is that such emblems on packaging or websites may be viewed by the FTC as an endorsement that must comply with the FTC’s Endorsement Guides. Therefore, before applying the name, seal, or logo of a third-party certifier, a marketer must not only meet the basic advertising requirements of ensuring that they have proper substantiation for the claims, but the marketer must also disclose material connections to the certifying organization and any information that may affect the credibility to be given the use of the certification or seal. Further, such seals or logos may be viewed as general environmental benefit claims so marketers should ensure that they qualify the claims and limit them to clarify the benefit of the product, packaging, or service.
Marketers should not make deceptive compostable claims. Specifically, a compostable claim should not be made unless the marketer can substantiate the fact that all materials in the product and packaging will break down into “usable compost” at the same rate of time as other materials with which it will be composted and that there is an appropriate composting facility available to a substantial majority of individuals to whom the product is marketed. If such a facility is not available to a substantial majority or the item will not compost at the appropriate rate of time, any compostable claims should be properly qualified to convey such facts.
All claims regarding the degradability of a product should be properly substantiated. For example, a claim that a product is “bio-degradable” must be backed by scientific evidence that the product will completely decompose within one year after being disposed of in a customary fashion. If not, proper qualification should clearly and prominently disclose information to avoid deceiving consumers about the ability of the product to degrade when disposed of in a customary fashion and “the rate and extent of degradation.”
Claims that a product is “free of” a specific substance must be substantiated. Such claims should not be made where the product is free of one substance, but contains an equally harmful substance. Further, a “free of” claim is not appropriate where a product is not associated with the substance with which the claim purports it is “free of.”
Marketers should be careful when making claims that a product is non-toxic. According to the FTC, such claims convey “that a product, package, or service is non-toxic both for humans and for the environment generally.” If such is not the case, the claim should be clearly and prominently clarified to avoid deception.
Ozone-Safe & Ozone-Friendly
Many “ozone-safe” and “ozone-friendly” claims convey that a product is safe for the “atmosphere as a whole.” If the claim directly or by implication represents that a product, package, or service, is safe for the atmosphere, the marketer must have substantiation to support such a claim.
Marketers should not make claims that a product or packaging is “recyclable” unless such product and/or packaging can be “collected, separated, or otherwise recovered from the waste stream through an established recycling program for reuse or use in manufacturing or assembling another item.” (italics added). An unqualified claim that a product is “recyclable” indicates that the entire product (and packaging, unless excluded within the claim) except for minor incidental components can be recycled. According to the FTC, this means that a recycling program must be available to a “substantial majority” of consumers to whom the item is marketed and the FTC defines “substantial majority” to mean “at least 60 percent.” Therefore, if facilities are not available to at least 60 percent of the consumers to whom the product is marketed, a “recyclable” claim must be qualified to the extent necessary to properly convey the availability of an appropriate recycling facility.
Recycled content claims should only be made where a product contains components that are “used, reconditioned, [or] re-manufactured.” To be considered recycled content, material must be diverted from the waste stream either during the manufacture of another product or after a consumer has used it. Such claims should be qualified unless the entire product, excluding minor incidental components, is composed of recycled content.
Unqualified claims that an item is “refillable” should only be made where the marketer provides the means through which a consumer can refill the packaging. This may either be provided by a collection and refill system or by selling bulk products to be used for refilling the original package.
Made with Renewable Energy
Marketers should not make unqualified “made with renewable energy” claims unless the entire product is manufactured using power from renewable energy sources such as wind power. And, for an unqualified claim, a marketer must purchase renewable energy certificates to match any non-renewable energy used to manufacture portions of the product that are not manufactured using renewable energy. The FTC recommends that marketers specify the source of renewable energy (e.g., wind, solar). Further, as with any carbon offset, marketers who generate renewable energy cannot claim that their products are “made with renewable energy” if they sell certificates for the energy that they generate.
Made with Renewable Materials
As with other types of claims, claims that a product or packaging is made with renewable materials must be substantiated unless the entire product is made with such materials, excluding minor incidental components. To avoid deception, the FTC recommends that marketers identify the material used and explain why the material is renewable. For example, the FTC recommends a claim such as, “Our packaging is made from 50% plant-based renewable materials. Because we turn fast-growing plants into bio-plastics, only half of our product is made from petroleum-based materials.” By explaining the claim in this way, the FTC believes that the risk of consumer deception is minimized.
Any claims that the weight, volume, or toxicity of a product or packaging has been reduced should be qualified to avoid consumer deception. As an example, the FTC indicates that a claim such as “10% less waste than our previous product” would be appropriate if the marketer can substantiate that “the current product’s disposal contributes 10% less waste by weight or volume to the solid waste stream when compared with the immediately preceding version of the product.”
Overall, the FTC’s release of the Green Guides should serve as a reminder to companies touting the environmental benefits of their products that such claims should be reviewed to ensure that they do not mislead consumers. Consumers seeking products and services with environmental benefits should be sure that the items that they purchase provide such benefits. Failure to provide clear and substantiated claims may not only result in the degradation of the market for environmentally friendly products, but may also lead to an enforcement action by the FTC.