Is your marketing department or advertising firm calling your product "eco-friendly" or telling consumers it is "made with renewable energy" or that it is "recyclable"? Do you have a product being marketed as "non-toxic?" Companies using these and similar green-marketing terms need to be aware that they can lead to investigation for deceptive marketing by the Federal Trade Commission (FTC) or civil suits from competitors.
After 14 years, the FTC recently finalized its amended Green Guides. The 2012 Green Guides require more specifics and cover a much wider range of claims than the 1998 version. From composting and biodegradable claims to "non-toxic?", refillable, "free of..." or even the physical placement of recycling symbols, the FTC and your rivals now pay close attention to these and other assertions in your marketing and other public statements.
Companies adhering to the 2012 Green Guides will only make specific claims based on how consumers actually use or dispose of a product and that can be substantiated or qualified with "clear, prominent and specific" language.
- Substantiating a claim means it must be grounded in "competent and reliable scientific evidence," or for carbon offsets, based on appropriate accounting methods to enumerate only voluntary offset purchases. The Green Guides allow companies to use third-party-generated certificates or seals of approval to validate claims, but this validation merely supplements the need to substantiate the claims; it does not replace it. Companies using third-party validation must disclose any material connections to the certifying organization and ensure the validation conveys specific environmental benefits.
- Where a claim cannot be substantiated in full, carefully drafted qualifying language can help a company highlight only significant benefits, thereby avoiding compliance issues from overly general claims. Claims cannot be based on extremely limited benefits or tout a reduction in harm from a substance that is never associated with a particular product (e.g., "gluten-free rice"). Qualifying language is especially important for claims that a particular product is "free of" a substance, uses fewer resources, is made with renewable energy or renewable/ recycled materials, or is recyclable or refillable.
Since 2004, McGuireWoods attorneys have counseled our clients on the Green Guides, as well as other environmental labeling and reporting, helping them avoid accusations of "greenwashing" in their marketing materials and other publicly available documents, and ensuring that their competitors also play by the rules. From review of annual reports and Securities and Exchange Commission filings to drafting appropriate language or helping clients make sure their claims are substantiated or qualified, we stand ready to help our clients properly market their green products and monitor claims made by others.