On October 2, 2012, the Federal Trade Commission (FTC) published long-awaited revised guidelines, known as the Green Guides, to aid marketers in properly making environmental benefit claims. The FTC released its final revisions after a multiyear investigatory process, which included marketing surveys as well as reviewing comments from companies, trade organizations, government entities and individuals. The the Green Guides lack the force of law, they provide guidance 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.
Below is a short summary of some of the major changes contained within the final revisions.
Highlights of the Newly Revised Green Guides
General Environmental Benefit Claims: The Green Guides caution against making general environmental benefit claims, such as using the words “green” or “eco-friendly,” without stating the basis for and qualifying these terms. The qualifying information must be clear, prominent and available at the point of sale—so consumers are able to see it before making their purchasing decisions.
Carbon Offsets: Marketers should use competent and reliable scientific evidence and comprehensive accounting methods to support their claims. However, an offset claim is inappropriate if the activity that makes the basis of the claim is required by law. If the offset purchase will pay for an emission reduction that will not occur for at least two years, then marketers are encouraged to disclose this information.
Certifications and Seals of Approval: The Green Guides also make recommendations for certifications and seals of approval used for endorsements. Marketers are encouraged to use environmental certifications or seals that convey the basis for the certification, but if these are not available, then they should clearly identify the product’s specific environmental benefits. Marketers are also encouraged to disclose their material connections with certifying organizations and must verify all express and implied claims when using third-party certification.
Compostable or Degradable: “Compostable” claims must be based on competent and reliable scientific evidence, showing that product or packaging materials will become usable compost. Marketers should qualify if the product is not able to be composted in a safe or timely fashion. “Degradable” claims do not have to be qualified if the product or package can completely break down within a reasonably short amount of time, typically one year.
“Free-Off”: “Free-of” claims can be made if the product contains trace amounts, background levels or less of the substance; the substance was not intentionally added to the product; and the amount contained with the product will not cause the type of harm linked to the substance. The final revision differs from the standard articulated in the draft revision, and it will certainly create challenges for marketers.
Non-Toxic: For “non-toxic” claims, marketers should employ competent and reliable scientific evidence showing that the product is safe for people and the environment, unless otherwise qualified. A product might be considered “non-toxic” under certain agency regulations designed to protect human health, but those regulations might not ensure protection for the environment.
Ozone-Safe: Marketers are cautioned against misrepresenting that a product is safe for the atmosphere or ozone layer because the FTC finds that these can be unqualified general environmental benefit claims.
Recyclable and Recycled Content: The Green Guides also provide guidance regarding “recyclable” and “recycled content” claims. Recyclable claims should be qualified if recycling facilities are unavailable to 60 percent of consumers or communities to whom manufacturers sell a product. Recycled content refers to material recovered or diverted from waste during manufacturing or post-consumer use. Marketers are advised to qualify claims for products or packaging constructed partly from recycled material and specify the amount of partly recycled material contained therein. In addition, qualified claims should be made for products containing used, reconditioned or remanufactured parts.
Refillable: Marketers should not make unqualified “refillable” claims unless they identify a method to refill the product.
Renewable Materials and Energy : With claims like “made with renewable materials or energy,” the guides provide that marketers should qualify claims with specific information about the renewable materials used, such as what the renewable material is, how it is sourced and what qualifies it as renewable. Also, the Green Guides specify that marketers should qualify claims of renewable energy by specifying the source (e.g., wind or solar). If the power used to manufacture the product or any component of the product comes from fossil fuels, a renewable energy claim is inappropriate unless renewable energy certificates are purchased to link with energy use.
Source Reduction: Finally, “source reduction” claims should be qualified with the amount of reduction and the basis for comparison from which the claim is made (e.g., “30 percent less runof f than our earlier model”).
“Sustainable” and “Organic” Are Not Addressed: The final revisions offer no guidance on claims regarding “sustainability” and whether a product is “organic.” The FTC claims that it lacks a sufficient basis or context to provide guidance on these claims because these terms have numerous meanings among consumers. However, the Green Guides caution marketers from making these types of claims without impunity.