After nearly two years of public comment, the United States Federal Trade Commission (“FTC”) issued long-awaited revisions to its Green Guides for the Use of Environmental Marketing Claims (“Green Guides”). The Green Guides reflect the FTC’s current views about the types of environmental marketing claims that are unfair or deceptive under Section 5 of the FTC Act. Given the explosion of “green” marketing campaigns and initiatives in the last several years, marketers should be familiar with the new Green Guides and anticipate new FTC enforcement actions in their wake.
Environmental marketing claims are claims about the environmental benefits or attributes of products, packaging, or services. The new Green Guides address many of the ubiquitous “green” claims marketers love and consumers regularly encounter. They apply not only to claims made in labeling, advertising and promotional materials, but also to claims made in “all other forms of marketing or medium, whether asserted directly or by implication, through words, symbols, logos, depictions, product brand names, or any other means.
The Green Guides emphasize these general principles:
- Qualify claims to the extent necessary to avoid deception and be sure disclosures are clear, prominent and understandable;
- Claims should be specific and clearly convey whether they refer to a product, its packaging, a service, or only some part of the product, packaging or service;
- Avoid overstating “green” attributes, directly or by implication;
- Comparative claims should be clear to avoid confusion about the comparison and must also be substantiated.
General Environmental Benefit Claims
Marketers should not make unqualified, general environmental benefit claims, such as “green” or “ecofriendly,” as they rarely can be substantiated. Instead, the Green Guides require marketers to qualify these claims by specifying the particular environmental benefits provided. Qualifications must be clear, prominent and specific and the marketer must be able to substantiate that claim. However, if the environmental benefit is negligible, or if the claim implies that the environmental benefit is more significant than it actually is, the claim may still be deceptive even if adequate substantiation exists.
This new section of the Guides requires marketers to have competent and reliable scientific evidence to support carbon offset claims. This includes using proper accounting methods to calculate emission reductions so as not to sell them more than once. And if consumers’ offset purchases fund emission reductions that will not occur for two or more years, this should be disclosed. Also, carbon offsets should not be advertised if the law already requires the activity that is the basis of the offset.
Certifications and Seals of Approval
The Guides now address the common marketing practice of using a certification or seal of approval with a “green” or “eco-friendly” word, phrase or design. These certifications and seals raise concerns with regulators because they often convey a general environmental benefit without clearly specifying the nature of the benefit. They also convey the impression that the product or service has been “certified” by an independent third party as having environmental benefits.
The Green Guides require:
- that certifications and seals of approval clearly convey, via their names or other means, the basis for the certification;
- that any “material connection” to the certifying organization is disclosed, as required by the FTC’s Endorsement Guides; and
- that marketers substantiate all express and implied claims.
The Green Guides also provide guidance from the FTC on how to avoid deception when making the following types of claims:
Marketers describing an item as “compostable” must have competent and reliable scientific evidence that the entire item will break down into, or become part of, usable compost in a “safe and timely manner” in a composting facility or a home compost pile or device. For example, if a product releases toxins when it breaks down, or takes far longer to break down than other materials with which it is composted, an unqualified compostable claim is deceptive. Also, if the product cannot be composted safely or in a timely manner at home, or if municipal composting facilities are not available to a substantial majority of consumers where the item is sold, the claim must be qualified.
A claim that a product is “degradable” or “biodegradable” requires competent and reliable scientific evidence that the entire item will break down and decompose within a “reasonably short period of time after customary disposal.” The FTC considers this time period to be one year for solid waste. Marketers may not, for example, claim that a product is degradable based on tests involving a non-customary disposal method (e.g., soil burial test) unless the claim is properly qualified.
Representing that a product is “free of” a substance is deceptive: (1) if another substance is present which poses the same or a similar environmental risk; or (2) if that substance has never been associated with the product category. Interestingly, the FTC suggests that in some limited situations, a “free of” claim is proper even if a substance is present in trace amounts. For example a “formaldehyde free” claim is not deceptive where tests show that the product emits trace amounts of it but trace amounts also are present in virtually all indoor and outdoor environments; the product emits less formaldehyde than is typically found in outdoor environments; and the trace amounts apparently do not cause material harm and “likely are inconsequential” to consumers.
Marketers of non-toxic claims need competent and reliable scientific evidence that the item is non-toxic for humans and for the environment. For example, a claim that a cleaning product is “essentially non-toxic” would be deceptive without further qualification if it could pose harm to pets or groundwater.
Ozone-Safe and Ozone-Friendly
It is deceptive to misrepresent, directly or by implication, that a product, package or service is “ozone-safe” or “ozone-friendly.” For example, if a product is labeled “ozone-friendly” but contains ozone-depleting substances, the claim is deceptive.
Marketers may promote an item as “recyclable” only if it 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.” If only part of an item is recyclable, or if any component of it (e.g., shape, size) significantly limits the ability to recycle the item, this must be clearly and prominently disclosed to consumers.
Also, when recycling facilities are not available to a substantial majority (the FTC defines this as at least 60%) of consumers or communities where the item is sold, the recyclable claim must be qualified (e.g., “This item may not be recyclable in your area.”). Even stronger language may be needed where the recycling options are available to only to a few; vague statements such as “recyclable where facilities exist” and “recyclable – check to see if recycling facilities exist in your area” may be deceptive because they do not adequately disclose the limited availability of recycling programs.
Regulators may also consider how conspicuous a universal recycling symbol is when determining whether a “recyclable” claim is being made. When the symbol is stamped in an inconspicuous location on the bottom of a container, this typically would not be a recyclable claim. If the symbol appears in a prominent location near the brand name, this likely would be a recyclable claim.
Marketers can make unqualified “recycled content” claims if the entire product or package, excluding minor, incidental components, is made from recycled material. Recycled content includes recycled raw material and used, reconditioned and re-manufactured components that have been recovered or otherwise diverted from the waste stream. For products that contain used, reconditioned or re-manufactured components, the claim should be qualified to specify this and the relevant percentage of the material these components represent. As with recyclable claims, recycled content claims need to be properly qualified if only a portion of an item or its packaging is recycled content. For instance, a prominent use of the universal recycling symbol on packaging, without more, likely conveys that the packaging is both recyclable and made entirely from recycled content. Unless substantiation exists for both messages, this claim will need to be qualified.
Marketers making unqualified “refillable” claims need to provide a means for customers to refill the package (e.g., system for the collection and refilling of the package; sale of refills).
Unqualified “made with renewable energy” claims are deceptive unless “all, or virtually all” of the significant manufacturing processes for making the product or package (or the processes for powering the service) are powered with renewable energy (e.g., wind or solar) or non-renewable energy matched by renewable energy certificates. Otherwise, the percentage of renewable energy involved should be clearly and prominently specified.
Claims that an item is “made with renewable materials” need to be qualified unless the item (excluding minor, incidental components) is made entirely with renewable materials. Qualifications may need to be made about the percentage of renewable materials present in the item. Also, identifying the material used and explaining why the material is renewable may help avoid an unintended recycled content, recyclable or biodegradable claim.
Claims that represent that a product or package have been reduced or are lower in weight, volume or toxicity may need to be qualified to clarify the amount of the source reduction and the basis for the comparison. For example, a claim that disposal of a product generates “20% less waste” could be interpreted as a comparison to either the advertiser’s most recent preceding product or to its competitors’ products, so the claim needs to be qualified to specify the basis for the comparison