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Green Marketing – FTC Guidance

In recent years, businesses have increasingly used “green” claims to market their products and services.

The Federal Trade Commission (FTC) has provided guidance to businesses on how these green claims can be made – to ensure that the claims are true and substantiated. The FTC guidance, also referenced to as the Green Guides, includes: (1) general principles that apply to all environmental marketing claims; (2) how consumers are likely to interpret particular claims; (3) how businesses can substantiate these claims, and; (4) how businesses can qualify these claims to avoid deceiving consumers.

FTC’s proposed revisions to the Green Guides include changes to strengthen guidance on claims that are already addressed, and to provide new guidance on marketing claims that were not common when the Green Guides were last revised in 1998. The public comment on the proposed revisions ended in December 2010, so it is just a matter of time before FTC finalizes the proposed revisions.

The proposed revisions caution businesses not to make blanket, general claims that a product is “environmentally friendly” or “eco-friendly.” Based on consumer studies, FTC perceives that such claims are likely to suggest that that product has specific and far reaching benefits. Few products, if any, have all the attributes consumers seem to perceive from claims, making these claims nearly impossible to substantiate. The proposed revisions also caution businesses not to use unqualified certifications or seals of approval, since these likely constitute general environmental benefit claims. Qualifications to certifications or seals of approval should be clear, prominent and specific.

The revisions provide guidance on certain specific claims. For example, use of the term “recyclable” would have to correlate to the general availability of recycling programs to consumers. A three tier analysis is used. If a substantial majority of consumers/communities have access to recycling facilities – then the business can make an unqualified recyclable claim. If a significant percentage have access – the business should qualify the recyclable claim (e.g., package may not be recyclable in your area). If less than a significant percentage have access, the business should qualify the recyclable claim (e.g., product is recyclable only in the few communities that have recycling programs). Guidance is also provided for the following specific environmental claims: degradable, compostable, ozone safe/ozone friendly, free of/non-toxic. The proposed revisions also provide advice about claims that are not addressed in the current Green Guides. For example, if a claim is made that a product is made with renewable materials, specific information about the renewable material should be provided (what it is, how sourced, and why it is renewable). In addition, the claim should be qualified if the product is not made entirely of renewable materials, excluding minor incidental components. New guidance is also provided for claims about carbon offsets and made with renewable energy.

While the proposed revisions are not yet final, businesses and their marketing departments should do their homework. They should review marketing materials that include environmental benefit claims to determine whether the claims meet the new substantiation and specificity requirements. In doing this review, businesses should remember that if they make an environmental claim that is challenged, whether by the FTC, a competitor, or a consumer, the business would bear the burden of proving that a claim is truthful and substantiated.