Everyone is “going green.” From recycling to reduced packaging, consumers want products they perceive to be environmentally friendly. But what do those “green” claims really mean?
Many reports have accused businesses of “greenwashing,” or using vague or unsubstantiated claims that may mislead customers. The Federal Trade Commission (FTC) recently weighed in on this issue with its Green Guides, the 2012 update of guidance first issued in 1992 to help marketers avoid making misleading environmental claims. The Green Guides and additional information about them are available on the FTC’s web site. The Guides are not regulations, but they represent the FTC’s views on the types of claims that may be deceptive.
The Guides address two broad categories of environmental claims. The first category is “general environmental benefit” claims, such as “green” or “environmentally friendly.” The second category includes 13 specific types of claims often made by marketers. In addition to setting forth general principles, the Guides provide specific examples of claims that the FTC would or would not find deceptive.
General Environmental Benefit Claims
Broad terms like “environmentally preferable” or “eco-friendly,” without more explanation and substantiation, will always be considered deceptive. These types of claims are closely scrutinized by the FTC because consumers may interpret them to indicate that a product has no negative environmental impact at all. The FTC believes a marketer should qualify general environmental benefit claims by providing clear and prominent language limiting the claim to a specific and limited benefit. A label that says “eco-friendly” is deceptive, but a label that says “eco-friendly: made with recycled materials” is not deceptive if the limitation is clear and prominent, the marketer can substantiate that the entire product, except for minor or incidental components, is made from recycled material, and making the product with recycled materials makes the product more environmentally beneficial overall (e.g., making the product from recycled materials does not require substantially more energy).
Even if a marketer explains, and has substantiation for, the product’s specific environmental attributes, the advertisement should not “imply” deceptive environmental claims. The Guides offer the following example of a deceptive implication: A picture of a laser printer in a bird’s nest balancing on a tree branch, surrounded by a dense forest, with the words “Buy our printer. Make a change” in green type. Although the advertisement makes no express claim, the FTC believes that the images and text likely convey that the product has far-reaching environmental benefits, which the marketer is “highly unlikely” to be able to substantiate. Additionally, a general environmental claim may be deceptive if it highlights a specific attribute of the product that provides only a negligible environmental benefit. For example, a label that says an area rug has “50 percent more recycled content than before” may be technically true if the percentage of recycled content has increased from 2 percent to 3 percent, but the FTC believes such a claim conveys a false impression.
Specific Environmental Claims
For any specific claim, the FTC expects marketers to have a competent and reliable scientific basis for the claim. The 2012 Green Guides address 13 common specific product claims. Some of the more common claims being used today are:
Carbon offsets: The Guides state that any claim should disclose if the carbon offset represents emission reductions that will not occur for two years or longer. In addition, no claim of emission reduction should be made if the reduction or the activity that causes the reduction was required by law.
Certificates and seals of approval: Environmental seals and certifications are subject to the FTC’s “Endorsement Guides” that provide the administrative guidance for the proper use of endorsements in marketing.
Degradable claims: The Guides state that an unqualified “degradable” claim is deceptive if the materials do not completely decompose within one year after customary disposal. This means that unqualified degradable claims for items that are customarily disposed in landfills are deceptive because landfills do not present conditions in which complete decomposition will occur within one year.
“Free-of” claims: Even a truthful claim that a product is “free of” a certain material is deceptive if the product contains substances that pose the same or similar environmental risk as the absent material or if the material has not been associated with similar products.
“Ozone-safe” and “ozone-friendly” claims: The Guides focus on both preserving “good ozone,” the layer in the earth’s atmosphere that protects from harmful radiation, and avoiding “bad ozone,” or ground level smog. A product claiming to be ozone-safe or ozone-friendly should contain neither materials designated by the Environmental Protection Agency as ozone-depleting nor materials such as volatile organic compounds that contribute to ground-level ozone.
Recyclable claims: Recyclable claims without qualifying language are appropriate only if recycling facilities are available to a substantial majority (at least 60 percent) of consumers or communities where the product is sold.
The press release accompanying the Green Guides notes that the FTC chose not to address the terms “sustainable,” “natural,” and “organic,” either because it lacked a sufficient basis to provide meaningful guidance or wanted to avoid proposing guidance that duplicated or contracted rules or guidance of other agencies.
Enforcement Against Greenwashers
While only the FTC may enforce the Federal Trade Commission Act, violations are frequently brought to the FTC’s attention by consumers and competitors. In addition, states and private parties in most states may sue under the state’s deceptive practices or unfair trade practice statutes.
The publication of the Green Guides offers detailed guidance on many common environmental claims, and the FTC’s reasoning is likely to carry some weight with courts struggling to determine whether a particular claim is deceptive or misleading. Avoiding liability requires crafting specific claims and ensuring that those claims can be substantiated.
Note: The full version of this article may be found in the March 2013 issue of South Carolina Lawyer, published by the South Carolina Bar.