The Federal Trade Commission (“FTC”) recently announced the long awaited final update to its Guides for the Use of Environmental Marketing Claims, also known as the Green Guides (“Guides”). The purpose of the Guides is to provide advertisers with guidance regarding how the FTC will apply Section 5 of the FTC Act to environmental advertising and marketing. The Guides explain how the FTC believes a reasonable consumer interprets environmental marketing claims, describe the basic elements necessary to substantiate certain claims, and present guidance on how to qualify claims to avoid deception. The primary focus of the FTC in announcing the revised Guides seems to be on reining in broad, unqualified general environmental benefit claims such as “green” or “eco-friendly.” According to the FTC, these claims are not capable of being substantiated in most cases because such broad claims likely communicate a wide range specific environmental benefit claims which are not supported. Thus, while broad environmental benefit claims are not prohibited, they must be used in connection with clear and prominent disclosures that clarify the specific environmental benefit(s) of the product. In addition, the FTC expressed concern that even qualified general claims can convey that a product is more environmentally beneficial overall than similar products, and that such claims could be deceptive if there are environmental trade-offs from the touted attribute.
The Guides contain new guidance, generally consistent with the proposed Guides, on: 1) certifications and seals of approval; 2) carbon offsets; 3) “free-of” claims: 4) “non-toxic” claims: 5) “made with renewable energy” claims; and 6) “made with renewable materials” claims. The FTC’s summary of these new sections (as well as updated guidance on claims such as “recyclable” and “degradable”) can be found here.
With respect to certifications and seals, the final Guides include a new example which indicates that certifications based on multiple attributes may be qualified by disclosing that information about the relative attributes can be found on a Web site where the number of attributes evaluated is so great that it is not possible to effectively communicate all such attributes in the advertising.
With respect to “free-of” claims, the FTC focused on the issue of whether it is appropriate to make such a claim where there are (or may be) trace amounts of a substance in the product. The FTC concluded that it may be appropriate to make a “free-of” claim even when trace amount of a substance are present if 1) the amount of the substance present is no more than a trace or background level, 2) the presence of the substance does not cause the material harm typically associated with the substance at that level, and 3) the substance has not been intentionally added to the product.
The Guides also updated existing guidance on claims such as “recyclable.” With respect to the claim “recyclable”, the FTC simplified the proposed guidance regarding when an advertiser must disclose the limited availability of recycling programs by eliminating the potentially confusing requirement that “a significant percentage” of consumers and communities have access to recycling facilities for the material. The FTC clarified that an unqualified recyclable claim requires recycling facilities be available to 60 percent of consumers or communities where the item is sold and that marketers should otherwise qualify a recyclable claim.
The FTC did not, however, add guidance on claims including “sustainable,” “natural,” or “organic.” This does not mean that such claims can be made with impunity. The FTC staff explained that its consumer research showed a lack of clarity about what these claims mean in an environmental context, and for that reason they decided against providing specific guidance on these claims. This means that much like general environmental claims, an advertiser must possess a reasonable basis for these claims and these claims should be accompanied by clear and prominent disclosures that clarify the intended meaning of, and reasonable basis for, each such claim.
The FTC also noted that it has revised the definition of “competent and reliable scientific evidence” needed to adequately substantiate environmental marketing claims since issuing the 1998 Guides, and therefore incorporated this new definition into the revised Guides. The current standard applied by the FTC is that evidence “should be sufficient in quality and quantity based on standards generally accepted in the relevant scientific fields, when considered in light of the entire body of relevant and reliable scientific evidence, to substantiate that [a] representation is true.” The most significant difference between the prior standard and the current standard is the requirement that an advertiser’s evidence be “considered in light of the entire body of relevant and reliable scientific evidence.”
TIP: The Guides are effective immediately and represent the FTC’s interpretation of the law of environmental advertising and marketing. Companies should apply the guidance contained in the Guides to their green marketing campaigns to comply with Section 5 of the FTC Act. The FTC may bring an investigation or enforcement action under the FTC Act if a marketer makes an environmental claim inconsistent with the Guides. Notably, the Guides do not preempt regulations established by federal, state, or local agencies regarding environmental marketing claims.