The Federal Trade Commission (FTC) has released its proposals for the updated Guides for the Use of Environmental Marketing Claims (Green Guides or Guides). In recent years, businesses have increased their focus on the way that they impact the environment. Due to this “going green” era, the FTC made the decision to revamp the Guides that businesses use to validate the claims they make to consumers, which had not been updated since 1998. The proposed version of the Green Guides will force businesses to be stricter with the claims that they make regarding the environmental impact of their products.
What are the Green Guides?
The FTC monitors marketing claims made to consumers to ensure that such claims are truthful and non-deceptive. As businesses have become more driven to market products as environmentally-friendly, the FTC has stepped in to ensure that statements are accurate and substantiated. Additionally, through the Green Guides, the FTC has provided businesses and advertisers with general principles they should follow in advertising to consumers, ways that consumers may perceive or misperceive various marketing claims, and guidance to avoid making deceptive claims.
The older version of the Green Guides had 10 major focuses. These focuses included: general environmental benefit claims, certifications and seals of approval, compostable claims, degradable claims, “free of” and “non-toxic” claims, ozone-safe and ozone-friendly claims, recyclable claims, recycled content claims, refillable claims, and source reduction claims. The proposed Green Guides cover the aforementioned claims, but also cover marketing claims regarding carbon offsets, renewable energy claims, and renewable materials claims. There are some minor, non-substantive changes to the Guides to increase readability, but the major substantive changes are detailed below.
Updated Sections of the Green Guides
General Environmental Benefit Claims. This section sets forth guidelines for general environmental claims, such as statements that a product is “green” or “eco-friendly.” The old Guides allowed unqualified environmental benefit claims as long as they could be substantiated. Now, environmental benefit claims must be qualified. Additionally, the new Guides reinforce the need for clear and prominent language and reinforce that the context of the advertisements, regardless of the language, should not imply unsubstantiated or deceptive claims.
Certifications & Seals of Approval. This section of the Guides deals with products that are marked with seals of approval or that claim to have been approved by various organizations. The old Guides confined the discussion of certifications and seals to the fifth example under general environmental benefit claims. The new Guides, however, have greatly increased the discussion of certifications and seals of approval. They state that third-party endorsements do not alleviate marketers’ responsibilities to validate all claims independently. Furthermore, they clarify that such certifications qualify as endorsements and that all endorsements must satisfy the FTC Endorsement Guides. Additionally, material connections between companies and endorsers must be revealed. Membership certifications on products are also considered deceptive if they convey that not only is the marketer a member of an organization, but that the organization also approved of the product, if the organization has not done so.
Compostable Claims. Marketers must ensure that compostable claims are not deceptive. The old and the new version are virtually the same. They stress that a claim that a product is compostable is deceiving if the product cannot be safely composted in a home compost pile or if the availability of a facility at which the product can be composted is extremely limited and the marketer does not reveal that. The one change in the section is that the new Guides clarify that the requirement that a product breakdown in a timely manner means that it should break down “in approximately the same time as the materials with which it is composted.”
Degradable Claims. The section dealing with claims that a product or package is degradable, biodegradable, oxo-degradable, oxo-biodegradable, or photodegradable remains substantially the same. Unqualified degradable claims are considered deceptive if the product does not break down in a “reasonably short period of time after customary disposal.” The one minor change made is that the new Guides clarify that a “reasonably short period of time” means “within one year.” The new Guides also clarify that their purpose is to demonstrate methods with which marketers can prevent deception and do not create standards for the degradability of littered products.
Free-of and Non-Toxic Claims. Currently, the Guides only address claims that a product is free of a substance or non-toxic in examples (free of: example 3 of the ozone safe section, addressing CFCs; non-toxic: example 4 of the general environmental benefits section). The new Guides dedicate an entire section to the issue. They require that all claims that a product is free of a substance or non-toxic be qualified, where necessary, to avoid deception. Such claims may only be used where the amount of a substance is “de minimis” or less. As usual, all such claims should be substantiated with scientific evidence as well. Additionally, claims that a product is free of a substance may still be considered deceptive if the product contains a material that poses a threat similar to the threat posed by the missing material or consumers have never associated the material with the product.
Ozone-Safe and Ozone-Friendly Claims. The section remains substantially the same. The one minor change is that, in Example 1, the new Guides remove the list of Class II chemicals due to changes in the regulations concerning chemicals that deplete the ozone.
Recyclable Claims. The old and new Guides are substantially the same. The new Guides do, however, make it clearer that unqualified claims may be made where a “substantial majority” (defined as “at least 60 percent”) of consumers have access to a recycling facility that can handle the material. All other claims—where there is only a “significant percentage” or less—should be qualified.
Recycled Content Claims. There are no substantive changes to this section. It directs marketers to avoid using claims that suggest that materials are “recyclable” unless they are pre-consumer materials, diverted from the solid waste stream, or post-consumer materials. Additionally, used goods, should not be labeled “recyclable” where use of that term may deceive consumers into believing that the goods are composed of recyclable materials instead of being already used.
Refillable Claims. There are no substantive changes to this section. It states that the term “refillable” should not be used if there is no procedure in place for safely refilling the product or if the use of the term will deceive consumers.
Source Reduction Claims. There are no substantive changes to this section. It directs marketers to avoid deceiving consumers by ensuring that all statements stating that products or packaging have a reduced volume, weight, or toxicity are qualified.
Additions to the Green Guides
Carbon Offsets. The proposed Guides include a section on carbon offsets that is not included in the previous version of the Guides. They require that marketers “employ competent and reliable scientific and accounting methods to properly quantify claimed emission reductions and to ensure that they do not sell the same reduction more than one time.” Additionally, any carbon offsets that represent emission reductions that will not occur for two or more years must be prominently disclosed and no carbon offsets that represent reductions required by law may be claimed.
Renewable Energy Claims. The proposed Guides include a section directing marketers to avoid claims that their products are made “with renewable energy” if the product is made using fossil fuels. Additionally, the source of the renewable energy should be disclosed. Furthermore, those marketers who create their goods with renewable energy, but then sell renewable energy certificates, may not claim that they use renewable energy where such a claim will deceive consumers.
Renewable Materials Claims. The proposed Guides include a section requiring marketers to avoid deceiving claims about “renewable materials” so that it is clear what the materials are, where they came from, and why they are considered renewable. Additionally, as with all other claims, any claim that a product is made with renewable materials should be qualified if it is not entirely produced with such materials.
To be clear, the Green Guides focus on avoiding consumer deception. Marketers should substantiate and qualify claims to avoid deceiving consumers. The FTC is seeking public comments on the proposed changes until December 10, 2010, after which it will begin finalizing the Guides.