Earth Matters - April 2013: Update on Federal Trade Commission Guides for Green Marketing

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In the August 2010 issue of the Earth Matters newsletter, we provided recommendations for incorporating transparency into “green” marketing efforts based on the “Guides for the Use of Environmental Marketing Claims” (the “Green Guides”) issued by the Federal Trade Commission (FTC). In October 2012, the FTC issued updated Green Guides in order to clarify use of “green” certifications and seals, and to discourage broad claims of environmental benefits associated with products. The updated Green Guides also include new sections on carbon offsets, “free-of” claims, “non-toxic” claims, “made with renewable energy” claims, and “made with renewable materials” claims.

The Green Guides are not legislative rules or enforceable regulations, but provide guidance and examples of marketing practices to avoid liability under Section 5 of the FTC Act, which prohibits unfair or deceptive marketing practices and allows the FTC to take enforcement action against deceptive claims.

In the previous article on “green” marketing, we recommended that businesses “emphasize transparency by explaining and supporting the environmental attributes of a particular product at each stage, from production to distribution and use, in order to avoid claims of greenwashing or deceptive practices.” The updated Green Guides include clear guidance on incorporating this transparency in marketing claims. The use of terms that imply a general environmental benefit, such as “green,” “earth friendly,” or “eco-friendly,” would likely be considered deceptive if used without qualification because it is unlikely, and difficult to prove, that a product has the broad and far-reaching environmental benefits that are implied by such a general term. Instead, marketers should use clear and prominent qualifying language to convey that a general environmental claim refers only to a specific and limited environmental benefit. The Green Guides provide examples illustrating acceptable practices. An environmental benefit should not be advertised if it is negligible or if there are trade-offs that negate or offset that benefit.

Similarly, third-party environmental certifications or seals should not convey a general environmental benefit. The previous newsletter article discussed independent verification of the environmental attributes of a product from third-party certification organizations such as EcoLogo and Green Seal. According to the updated Green Guides, these certifications should indicate, with clear and prominent language, the specific and limited environmental benefits attributed to the product by the certification. For those seals or certifications that are based on comprehensive, multi-attribute standards, the updated Green Guides recommend including a qualification that refers the customer to a website or other resource that discusses the attributes evaluated for that product.

The updated Green Guides also contain new guidance on claims concerning carbon offsets, which refer to emissions of carbon dioxide or other greenhouse gases during the life-cycle of the product that are offset by reductions in emissions elsewhere. Carbon offset claims should be supported by reliable scientific evidence and appropriate accounting methods to ensure emission reductions are properly quantified. Carbon offset claims should not be made if such offsets are otherwise required by law.

Thus, for many “green” marketing claims, the updated Green Guides require analyzing a product’s net environmental benefit through all stages of raw materials procurement, production, distribution and disposal of the product. Such a life cycle assessment would prevent deceptive advertising that touts an environmental benefit during one stage of the process, which may be offset by environmental detriment during another stage in the process. Rather than conducting life-cycle assessments on all products, however, businesses should carefully consider whether one is necessary depending on the environmental benefit attributed to a particular product.

In general, the goal of the updated Green Guides is to allow only those “green” claims that actually describe a specific net benefit to the environment, which may in turn produce economic benefits for the consumer through a lower cost product due to more efficient production and distribution. Thus, when possible, businesses should focus on making claims that tout the benefit to the consumer from a company’s choices that are based on a product’s impact to the environment, instead of merely engendering positive feelings about the purchase of a product from a purely altruistic point of view.

To learn more about “green” marketing, contact Environment and Energy Associate Susan M. Marriott at (716) 504-5778 or smarriott@phillipslytle.com.