As consumers have become more environmentally conscious, manufacturers and marketers have increasingly utilized environmental marketing claims to increase market share. Out of concern that consumers’ perceived environmental benefit often exceeds the actual environmental benefit provided by the manufacturer, the Federal Trade Commission (FTC) has proposed revisions to its Green Guides.
The proposed revisions focus on three topics: (1) revisions to previously established Green Guide provisions, (2) entirely new Green Guide provisions and (3) matters for which the FTC has declined to provide guidance. The common thread throughout these topics is the FTC’s desire to encourage more specificity in marketers’ claims, to avoid causing confusion to consumers. While not having the force of law, the Green Guides provide guidance to the public on how to avoid false or misleading environmental marketing claims in violation of Section 5 of the FTC Act, which prohibits unfair or deceptive acts or practices.
Revisions to Current Guides
Last revised in 1998, the newly proposed revisions to the Green Guides include more specific guidelines for topics and claims currently covered. The FTC’s revisions to the proposed guides direct that marketers should not make unqualified general environmental benefit claims, such as identifying a product as “green” or “eco-friendly,” since these claims are likely to deceive consumers and are typically impossible to substantiate. The FTC’s revisions provide that marketers must qualify and limit these broad claims by identifying a specific environmental benefit.
Additionally, the proposed Green Guides also caution manufacturers and marketers against using seals and certifications that suggest an environmental seal-of-approval or eco-certification because those designations may imply that the product is environmentally superior to other products. Further, the revised guidelines provide that marketers who self-certify their products must disclose that the product is self-certified. Finally, the guidelines provide that the marketers and manufacturers who make these certification claims are “on the hook” for the accuracy of that certification, even if the certification comes from a third-party association. Thus, the new Green Guides encourage businesses to do their due diligence before touting an organization’s seal.
Other revisions to the current guidelines provide greater specificity on use of other marketing claims, including “biodegradable,” “recyclable,” “compostable” and “Free of/Non-toxic.”
Entirely New Guide Provisions
In the proposed revisions to the Green Guides, the FTC also provides guidance regarding claims that are not addressed in the current Green Guides. Among the new provisions are detailed guidelines for marketers using claims like “made with renewable materials or energy.” Specifically, the proposed revisions provide that marketers should qualify claims with specific information about the renewable materials used—for example, what the renewable material is, how it is sourced and what qualifies it as renewable. Further, the proposed revisions specify that marketers should qualify claims of renewable energy by specifying the source (e.g., wind or solar), and that if the power used to manufacture any of the product comes from fossil fuels, a renewable energy claim is inappropriate.
Additionally, the revised guidelines provide greater specificity for marketers making carbon offset claims. First, marketers cannot make an unqualified carbon offset claim for an offset that will not occur within two years. If it takes any longer, the claim must qualify the time-frame. Second, if the activity that makes the basis of the claim is required by law, an offset claim is inappropriate. Third, any claim must be supported by solid scientific evidence and thorough accounting practices.
Topics the Guides Do Not Address
While the revised guidelines provide greater detail in a number of areas, the FTC declined to provide guidance on marketing claims regarding “sustainability” and whether a product is “organic.” In declining to provide guidance on whether a product is “sustainable,” the FTC explained that consumer studies identified that consumer perception was far too varied to create an enforceable guideline. Additionally, in declining to provide guidance on whether a product is “organic,” the FTC noted that whether a product qualifies as “organic” is solely within the jurisdiction of the U.S. Department of Agriculture.
Commenting on Proposed Revisions
The FTC is accepting comments on its proposal through December 10, and more information on the agency’s proposed modifications may be found on the FTC’s dedicated “green” website at http:// www.ftc.gov/green. Manufacturers and marketers should anticipate the FTC finalizing some form of these revisions to the Green Guides and begin the process of evaluating and updating current marketing claims and materials in light of the direction the FTC is moving.