The updated Green Guides will likely impact legal liability for environmental marketing claims in the years to come.

On December 20, 2022, the Federal Trade Commission (FTC) published a notice (hereinafter, the 2022 Notice) requesting public comments on its Guides for the Use of Environmental Marketing Claims (commonly known as the Green Guides or the Guides). The FTC reviews its rules and guides on a 10-year schedule, and its publication of the 2022 Notice is in accordance with the agency’s regulatory review cycle. The Guides were first issued in 1992 and most recently revised in 2012.

The public can submit comments by using the Federal Register online submission form or by mailing comments to the FTC. The public comment period will close on February 21, 2023.

The FTC publishes the Green Guides in part to support marketers and companies in their environmental advertising decisions. Adherence to the Guides can also help companies avoid litigation involving deceptive environmental claims. Further, the Guides can inform companies in their supply chain decision-making. Per the FTC, the Guides are designed to provide guidance on (1) general principles that apply to all environmental marketing claims; (2) how consumers are likely to interpret particular claims and how marketers can substantiate these claims; and (3) how marketers can qualify their claims to avoid deceiving consumers.[1]

The Evolving Focus Areas of the Green Guides

The 2012 update to the Green Guides provided substantive new guidance on various matters, including “environmentally friendly” claims, certifications and seals of approval, carbon offsets, free-of claims, non-toxic claims, made-with-renewable-energy claims, and made-with-renewable-materials claims. With the 2022 Notice, the FTC is taking a seemingly different tack: instead of proposing and seeking public comment on substantive revisions and additions to the 2012 Green Guides, the FTC is raising the more fundamental question of “the efficiency, costs, benefits, and regulatory impact of the Guides to determine whether to retain, modify or rescind them.”[2] Notably, as part of its solicitation of input on this question, the FTC is also inviting comment on whether the agency “should initiate a proceeding to consider a rulemaking relating to environmental benefit claims under its FTC Act authority.”[3]

In the 2022 Notice, the FTC is seeking comment on a series of specific questions that pertain to the following key topics:

• The efficacy of the Green Guides and the costs they impose on consumers and businesses alike
• The potential overlap between the Green Guides and existing international, federal, state, and local laws, regulations, and standards
• Broad climate change-related claims, including carbon offsets, net zero, carbon neutral, low carbon, ozone-safe/ozone-friendly, energy efficiency, and energy use
• Product disposal-related claims, including compostability, recyclability, and degradability
• Organic claims for non-agricultural products
• Sustainable claims, given that the FTC had determined in its 2012 Green Guides that it lacked a basis to give specific guidance on such claims

With reference to many of these topics, the FTC is seeking not only technical information, but also “evidence” regarding consumer understanding and perception.

Enforcement and Litigation Risk Associated With the Green Guides

The importance of the Green Guides extends beyond their use as a reference point for marketers and companies. The FTC and consumers have used deviations from the Guides as the basis for lawsuits, and some states, such as New York, have codified reliance on the Guides as a defense from liability.[4] Consequently, the Guides are frequently referenced in judicial opinions examining the merits of complaints alleging deceptive green advertising, and for some defendants, the ability to demonstrate marketing that is consistent with the Guides has led to a complete defense.[5] That said, under current federal law, violations of the Guides do not give rise to a cause of action under the FTC Act, 15 U.S.C. § 45. But that could change. The 2022 Notice reflects not only the FTC’s recognition of the increased attention to environmental concerns in the marketplace since publication of the 2012 Green Guides, but also the FTC’s acknowledgment of the challenges that companies may face in communicating complex environmental concepts, such as, for example, “how a product contributes to climate change, or pollution,”[6] in a manner that consumers perceive accurately, especially when the communication involves an area of evolving science. As a result, the FTC is also seeking input on whether it should consider rulemaking to establish independently enforceable requirements related to unfair and deceptive environmental claims.

Takeaways and Next Steps

Given the intense interest in environmental, social, and governance (ESG) matters across the domestic and global economies, the rising attention among consumers in purchasing products claiming environmental or sustainability-related benefits, and the attendant increase in greenwashing, consumer protection, and securities law litigation, the 2022 Notice initiates a process that will likely be consequential for a broad spectrum of companies that advertise and market products in the United States. This process may result in revisions to the Green Guides, or possibly, in some alternative pathway, even a new FTC regulation.

Under the circumstances, this is a rare opportunity for consumers, consumer and environmental organizations, and businesses to provide input and help shape the final form of the Green Guides for the decade to come. Companies that seek to market their products with environmental benefits should consider providing comments to the FTC ahead of the February 21, 2023, deadline, and should stay abreast of the changing guidance to ensure that their advertising conforms to the final version of the Guides.

Latham & Watkins will continue to monitor and communicate on further developments related to the Green Guides.

Endnotes

[1] Green Guides, Federal Trade Commission, https://www.ftc.gov/news-events/topics/truth-advertising/green-guides (last visited Dec. 1, 2022).

[2] Guides for the Use of Environmental Marketing Claims, 87 Fed. Reg. 243 (proposed Dec. 20, 2022) (to be codified at 16 C.F.R. pt. 260).

[3] Id.

[4] N.Y. Gen. Bus. Law §§ 394(d), 350(d) (McKinney 2022).

[5] Compare Duchimaza v. Niagara Bottling, LLC, — F. Supp. 3d. —, 2022 WL 3139898 (S.D.N.Y. Aug. 5, 2022) (discussing compliance with the Guides as a defense to a misleading advertising claim) with White v. Kroger, Co., No. 21-cv-08004-RS, 2022 WL 888657 (N.D. Cal. Mar. 25, 2022) (utilizing the Guides as support for a misleading advertising claim).

[6] Guides for the Use of Environmental Marketing Claims, 87 Fed. Reg. 243 (proposed Dec. 20, 2022) (to be codified at 16 C.F.R. pt. 260) (statement of Chair Lina M. Khan).