The FTC has been sifting through public comments from consumer groups, industry and other agencies and individuals about its announced efforts to revisit its 1992 Green Advertising Guides. The EPA has noted the importance of preventing misleading "green-washing" ad claims without inhibiting the market for legitimate environmentally preferred and improved products.
Now Congress has burst on the scene with hearings early in June to express its concern that action be taken quickly so that consumers will not confuse genuinely preferred products with those that are marketed with hyped green claims that are clever but provide only illusory benefits.
The phrase "old wine in new bottles" would be an excellent description for the status of some "green" marketing claims in 2009. Some green products actually do include new technologies and benefits, but in many other cases, consumers get the same old products with hot "new" environmental claims that falsely imply that they are somehow better for the environment than they really are.
At the center of this discussion are the questions: "What does green language actually mean to consumers and Who makes that determination?" Though some activists would like the FTC to force companies to set higher standards for their products, the FTC's job is not creating "design standards" for defining what a "green" claim means. Its Guides protect consumers from being misled by the ad claims that are made. For example, the FTC typically would not require that a product must have 30% or more "post consumer waste" to make a "recycled" claim, but it will ensure that consumers are not deceived as to what constitutes "post consumer waste" and how much, if any, a particular product has.
In the early 1990s, the FTC had its hands full with claims that products were "recycled" or "recyclable," were safe for the ozone layer or in a landfill, or were simply "environmentally friendly," perhaps with some green logo on the packaging. Nearly 20 years later, the issues are similar but the terminology is new. Now we are hearing about "sustainable," "compostable," "non-toxic," "organic" and "renewable" goods. The problem is that many consumers have little idea what those terms really mean. In fact, there are not clearly accepted meanings for these general terms.
As a result, not only can consumers be misled on their product choices, but producers of improved products lose their competitive advantage because of the misleading hype that others use. Even these legitimate producers may be confused about the type and amount of "competent and reliable scientific evidence" they must have for general ad claims because they cannot be sure how reasonable consumers will interpret them.
That is why specific green claims are typically less risky than general claims. The phrase "Made with 50% post-consumer waste" is both less prone to consumer confusion and more easily established with hard facts. But words like "sustainable" and "renewable" are fraught with danger, given that we do not know for sure exactly what they will mean to consumers and there is no established definitions for them.
The FTC will be taking a hard look at the "new" cluster of popular green claims. However, industries should not assume it is safe to use these words until they get more specific guidance from the FTC. The 1992 "Guides" are in effect and provide general guidance for all environmental claims, not just the ones that were common in the early 1990s. Any claim must be analyzed in terms of existing general advertising law principles. Violations of law can be prosecuted even before the new Guides are issued.
An advertiser must develop a good sense of what its claim will mean to reasonable consumers. Sometimes it is a matter of logic, but often a specialized survey ("copy test") must be done to be more certain what a claim means. Many national advertisers do such surveys not just for legal compliance, but to make sure that consumers are getting the exact message they intended to send, by spending millions of advertising dollars. Next the advertiser must have good evidence -- often "competent and reliable" scientific evidence -- to support the claims before the ad runs. These two elements are the foundations of all advertising law.
Advertisers who believe that the FTC or state attorneys general will not see their ads and packaging are taking a big gamble. Many complaints about this kind of advertising come not from what the FTC sees on TV or in print, but from competitors who are concerned that they cannot compete fairly if they make legal claims for similar products. Your product may do the task it is intended for, but stretching the truth about environmental benefits is a good way to have government enforcers and competitors coming after you.
In sum, it will take quite some time for the government, industry and consumer groups to reach a consensus on how the new green advertising claims should be viewed and treated. In the meantime, you can take steps to protect yourself and your products from unnecessary attack:
- Be as specific as you can about the benefit you want to advertise for your product.
- Back up your claim with valid scientific research from within your organization, through reputable third party testers, or accepted science in the public domain.
- Follow the 1992 Guides and use good judgment for terms not covered back then.