Green Advertising: The FTC Green Guides
Nov 23, 2011 QuickCounsel Download PDF
By Bonni F. Kaufman
First issued in 1992, the FTC designed its Guides for the Use of Environmental Marketing Claims ("Green Guides")to help marketers avoid misleading environmental claims that are unfair or deceptive under Section 5 of the Federal Trade Commission Act. The FTC formally updated the guides in 1996 and 1998, and in 2010 proposed new revisions to the guides.
The Green Guides cover "environmental claims" made in advertising, including promotional material, internet advertising, product packaging and labels. An "environmental claim" is any claim about the environmental attributes of a product (or component), package or service. The Green Guides apply to environmental claims in all forms of marketing, "whether asserted directly or by implication, through words, symbols, emblems, logos, depictions, product brand names, or through other means, such as the Internet or electronic mail." The 2010 revisions to the Green Guides address carbon offset claims and renewable energy claims as well as traditional environmental claims such as biodegradation and recycling.
The Green Guides are administrative interpretations of the law so they are not independently enforceable. However, they are highly influential in FTC enforcement decisions, and therefore deserve close scrutiny. For example, in the last few years, the FTC has charged four sellers of clothing and other textile products with making false and unsubstantiated "green" claims that their clothing and textile products were manufactured using an environmentally friendly process; that they retained the natural antimicrobial properties of the bamboo plant, and that they were biodegradable. The FTC also brought an enforcement action against Kmart Corp., Tender Corp., and Dyna-E International for allegedly making false and unsubstantiated claims that their paper products were "biodegradable."This QuickCounsel briefly describes the revisions to the Green Guides and introduces the basic tenants of the guidance.
Environmental claims, like other advertising claims must be factually correct and substantiated by competent and reliable evidence. This evidence must be available at the time an entity makes the claim, and claims must be qualified as necessary to prevent the claim from being false, misleading, or deceptive.Unless it is clear from the context, a claim should specify whether it refers to the product, the product's packaging, a service, or to a portion of the product, package, or service. Additionally, any comparative claims should make clear whether the entity is making the comparison related to previous versions of the product or to competitive products.
Claims of environmental benefit that are accurate as stated and substantiated can still be misleading or deceptive if an entity overstates the benefits. Examples:
Certifications and Seals
The proposed changes caution against unqualified certifications or seals of approval (i.e., ones that do not state the basis for the certification). Instead, marketers should use clear and prominent language limiting the claim to the specific, [don't change here} environmental benefits that can be properly substantiated. . The proposal also emphasizes that certifications and seals are endorsements covered by the Commission's Endorsement Guides. Hence, the revisions require that companies demonstrate independence by disclosing any material connections that the company may have to the certifying body. Third-party certifications do not eliminate a marketer's obligation to have substantiation for all conveyed claims.
General Environmental Benefit
Marketers should avoid unqualified claims of general environmental benefit, such as "environmentally friendly," "good for the environment," "environmentally safe" or "green." The current Green Guides allow an unqualified general claim when a marketer can substantiate all material claims implied by use of the term in context. However, the proposed revisions explain that "[b]ecause it is highly unlikely that marketers can substantiate all reasonable interpretations of these claims, marketers should not make unqualified general environmental benefit claims."Companies may, however, qualify general environmental claims to specify a particular attribute or aspect for which the marketers can substantiate the claim.
Claims that a product is recyclable (including use of a recycling symbol) should:
Claims of "recycled materials" or other claims of recycled content should be qualified to indicate the percentage of recycled content, by weight. Ifthe materials use less than 100% pre-consumer recycled content, marketers must be able to show that these materials would otherwise have entered the solid waste stream.
Marketers should also qualify claims that products are biodegradable, degradable or photodegradable by indicating the rate and extent of degradation in the environment in which the product or packaging is typically disposed. Qualification is not necessary when the company can substantiate that the product or package to which the claim refers will completely break down and decompose into elements found in nature within a short period of time (i.e., one year) after customary disposal.In the proposed revisions, the FTC explains that any unqualified degradable claims for products or packages destined for landfills, incinerators, or recycling facilities are deceptive because decomposition will not occur within one year.
If an unqualified compostable claim is used, all materials in the product/package should break down in a safe and timely manner (i.e., in approximately the same time as the materials with which it is composted).
In the proposed revisions, the FTC advises companies that -- even if true -- claims that an item is "free-of" a substance may be deceptive if:
The proposed revisions provide new advice about carbon offset claims. Marketers should employ competent and reliable scientific and accounting methods to support their carbon offset claims. Additionally, companies should disclose if the offset represents emissions reductions that will not occur for two or more years. Offsets that are required by law should not be advertised.
Renewable Energy/Renewable Materials
The proposed revisions advise marketers to ensure that claims for products made with "renewable energy" and/or "renewable materials" are qualified and quantified. For renewable energy claims, companies should specify the source of renewable energy, and, forrenewable materials claims, they should provide specifics about the material used, the material's sourcing, and why it is renewable. Unqualified renewable energy claims should not be made unless all, or virtually all, of the "significant manufacturing processes involved in making the product or package are powered with renewable energy or conventional energy offset by renewable energy certificates." Likewise, marketers should not use unqualified renewable material claims unless the item is made entirely with renewable components (excluding minor, incidental components).
As companies and advertisers increasingly use claims of sustainability or environmental friendliness to market their goods, the FTC will continue to monitor these claims to protect consumers. The FTC's Guide for the Use of Environmental Claims provide companies with some guidance on making "green" claims. At its core, the Guide requires companies to be able to substantiate their environmental claims. This QuickCounsel provides an overview of the claims the Guide covers and guidance on how advertisers must limit their language to avoid liability.
*This article was prepared with the assistance of Stosh Silivos, a law student currently attending Columbia Law School.
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