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Marketing Green for Earth Day? What FTC’s Green Guides Mean for Your Business

3/17/2011

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In the run-up to Earth Day, April 22, marketers who are only starting to examine green marketing strategies may want to make a careful review of the Federal Trade Commission’s proposed revisions to its Green Guides.

The CBBB’s National Advertising Division gives great weight to the Guides in evaluating whether environmental claims are adequately substantiated. Last revised in 1998, the revised Green Guides provide clarification of environmental claims and also include new sections for claims not previously addressed, such as claims about the use of renewable materials, renewable energy and carbon offsets.  Here are some of the key revisions.

  • Marketers should not make unqualified general environmental benefit claims such as “green” or “eco-friendly”. According to the Guides, these claims are difficult, if not impossible, to substantiate.

  • Seals and Certifications are considered “endorsements.”  This means that marketers may need to disclose any material connections with the certifier.  Third-party certification does not eliminate a marketer’s obligation to have substantiation for its claims.

  • An unqualified claim that a product or package is biodegradable means that it will completely decompose is no more than one year after customary disposal.  Marketers should not make unqualified degradable claims for items destined for landfills.

  • The Guides address claims of recyclability and introduce a three-tiered analysis for disclosing the limited availability of recycling programs.

  • Marketers making “renewable energy” claims should specify the source of the renewable energy.  If a company sells Renewable Energy Certificates (RECs) for the renewable energy they generate, should not represent that they use renewable energy.

  • Marketers making “carbon offset” claims should disclose if the offset purchase funds emission reductions that will not occur for two years or longer.
The FTC has invited additional public comment on a number of issues, including a request for consumer perception evidence of how consumers interpret environmental claims when qualified by identifying a particular environmental attribute.

Companies also should be aware of how the Guides are applied by self-regulatory bodies such as the NAD.   While it remains to be seen how aggressive FTC will be in its enforcement efforts, challenges to green marketing claims have been on the rise before NAD.  In the past year, NAD has looked to the FTC Green Guides in addressing claims of biodegradability, renewable energy as well as general environmental benefit claims.
 
The Guides also remind advertisers that whether or not FTC has provided specific guidance on the use of terminology, advertisers are responsible to ensure that their claims – whether express or implied - are substantiated by competent and reliable scientific evidence.  Advertisers should not lose sight of the fact that the truth and accuracy of green claims cannot typically be verified by consumers themselves. Accordingly the element of trust is essential for green marketers and brands to maintain credibility. While the FTC Guides provide a useful and important tool for marketers, it remains incumbent on companies to hold themselves and their industry to high standards of truth and accuracy.

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