On October 6, 2010, the Federal Trade Commission (FTC) posted on its website a 225-page document entitled “Proposed Revisions to the Green Guides.” In addition to the proposed revised Green Guides (Guides) themselves, the document includes comments—received in response to several FTC workshops and other requests for comments—dating back to 1998, when the Guides were last revised. Also included is a lengthy set of questions on which the FTC is seeking comments (due by December 10, 2010) and a section on advertising claims that are not addressed in the revised Guides (i.e., “sustainable” claims, and “organic” and “natural” claims) primarily on the grounds that the FTC lacks a significant basis to provide meaningful guidance.
Tougher New Standards on Certifications and Seals of Approval
One area in which the FTC comes down with noticeably stricter standards concerns certification and seals of approval. Earlier Guides made mention of only one short example. In the proposed Guides, the subject has been expanded to be a complete new section that concludes that: “A marketer’s use of an unqualified environmental certification or seal of approval (i.e., one that does not state the basis for the certification) likely conveys a general environmental benefit claim. Because it is highly unlikely that marketers can substantiate such claims, marketers should not use unqualified certifications or seals of approval.” This new provision puts in jeopardy the numerous certifications and environmental seals of approval (estimates run as high as several hundred) and many will have to be modified or dropped. As the FTC also emphasizes, third-party certification does not eliminate a marketer’s obligation to have substantiation for all claims and marketers should use clear and prominent language limiting the claim to particular attributes for which they have substantiation.
New Claims Covered in the Proposed Guides
New claims not covered by the existing Guides include “renewable materials,” “renewable energy” and “carbon offsets.” Carbon offsets fund projects that reduce greenhouse gas emissions in one place in order to counterbalance or “offset” emissions that occur elsewhere. The proposed Guides require marketers to provide specific information about the materials and energy used. Moreover, marketers should not provide unqualified renewable energy claims if the power used to manufacture any part of the product was derived from fossil fuels. In a more limited way, the proposed Guides, for the first time, set some standards for carbon offsets. The Guides require marketers to have competent and reliable scientific evidence to support their carbon offset claims, including use of appropriate accounting methods to ensure that they are properly quantifying emission reductions and are not selling those reductions more than once.
Expanded Requirements for Claims Covered in the Current Guides
In a number of key areas, the proposed, revised Guides expand the requirements for claims addressed in the current Guides, including claims that a product is “degradable,” “compostable,” “recyclable” or “free-of” a particular substance.
“Degradable.” The proposed Guides state specifically that degradable claims should not be made if complete decomposition will not occur within one year. Marketers should not make degradable claims for products destined for landfills, incinerators or recycling facilities because decomposition will not occur within one year.
“Compostable.” The proposed Guides clarify that the time period set forth in the current Guides (all materials will break down in a timely manner) means that a product or package will break down in approximately the same time as the materials with which it is composted.
“Recyclable.” The proposed Guides expand and emphasize that marketers must disclose any limited availability of recycling programs. If a “substantial majority” or a “significant percentage” of consumers do not have access to recycling facilities, marketers cannot make an unqualified recyclable claim.
“Free-of.” The proposed Guides expand the current guidance to advise that even if a claim is true that an item is free-of a substance, it may be deceptive if the item has substances that have the same or similar environmental risk as the substance not present or that the substance has never been associated with the product category