Green Advertising: The FTC Green Guides
Nov 23, 2011
QuickCounsel
By Bonni F. Kaufman
This resource is sponsored by:
Overview
First issued in 1992, the FTC designed its Guides for the Use of Environmental Marketing Claims ("Green Guides")to help marketers
avoid misleading environmental claims that are unfair or deceptive under Section 5 of the Federal Trade Commission Act. The FTC
formally updated the guides in 1996 and 1998, and in 2010 proposed new revisions to the guides.
The Green Guides cover "environmental claims" made in advertising, including promotional material, internet advertising, product
packaging and labels. An "environmental claim" is any claim about the environmental attributes of a product (or component),
package or service. The Green Guides apply to environmental claims in all forms of marketing, "whether asserted directly or by
implication, through words, symbols, emblems, logos, depictions, product brand names, or through other means, such as the Internet
or electronic mail." The 2010 revisions to the Green Guides address carbon offset claims and renewable energy claims as well as
traditional environmental claims such as biodegradation and recycling.
The Green Guides are administrative interpretations of the law so they are not independently enforceable. However, they are highly
influential in FTC enforcement decisions, and therefore deserve close scrutiny. For example, in the last few years, the FTC has
charged four sellers of clothing and other textile products with making false and unsubstantiated "green" claims that their clothing and
textile products were manufactured using an environmentally friendly process; that they retained the natural antimicrobial properties
of the bamboo plant, and that they were biodegradable. The FTC also brought an enforcement action against Kmart Corp., Tender
Corp., and Dyna-E International for allegedly making false and unsubstantiated claims that their paper products were
"biodegradable."This QuickCounsel briefly describes the revisions to the Green Guides and introduces the basic tenants of the
guidance.
General Principles
Environmental claims, like other advertising claims must be factually correct and substantiated by competent and reliable evidence.
This evidence must be available at the time an entity makes the claim, and claims must be qualified as necessary to prevent the claim
from being false, misleading, or deceptive.Unless it is clear from the context, a claim should specify whether it refers to the product,
the product's packaging, a service, or to a portion of the product, package, or service. Additionally, any comparative claims should
make clear whether the entity is making the comparison related to previous versions of the product or to competitive products.
Claims of environmental benefit that are accurate as stated and substantiated can still be misleading or deceptive if an entity
overstates the benefits. Examples:
- "50% more recycled content than before" when the increase was from 2% to 3%.
- "Environmentally friendly because it was not chlorine bleached, a process that has been shown to
create harmful substances", when the bleaching process released significant quantities of other harmful
substances.
Certifications and Seals
The proposed changes caution against unqualified certifications or seals of approval (i.e., ones that do not state the basis for the
certification). Instead, marketers should use clear and prominent language limiting the claim to the specific, [don't change here}
environmental benefits that can be properly substantiated. . The proposal also emphasizes that certifications and seals are
endorsements covered by the Commission's Endorsement Guides. Hence, the revisions require that companies demonstrate independence
by disclosing any material connections that the company may have to the certifying body. Third-party certifications do not eliminate a
marketer's obligation to have substantiation for all conveyed claims.
General Environmental Benefit
Marketers should avoid unqualified claims of general environmental benefit, such as "environmentally friendly," "good for the
environment," "environmentally safe" or "green." The current Green Guides allow an unqualified general claim when a marketer can
substantiate all material claims implied by use of the term in context. However, the proposed revisions explain that "[b]ecause it is
highly unlikely that marketers can substantiate all reasonable interpretations of these claims, marketers should not make unqualified
general environmental benefit claims."Companies may, however, qualify general environmental claims to specify a particular attribute
or aspect for which the marketers can substantiate the claim.
Recyclable
Claims that a product is recyclable (including use of a recycling symbol) should:
- Not be used unless the product or package to which the claim refers can be collected, separated or
otherwise recovered from the solid waste stream for reuse, or for manufacture or assembly of another
product or package, through an established recycling program.
- Be qualified as needed to avoid deception about the availability of recycling programs and collection
sites. The proposed revisions highlight the three-tiered analysis for disclosing the limited availability of
recycling programs. If a "substantial majority" (i.e., 60%) of consumers have access to recycling
facilities a marketer can make an unqualified recyclable claim. If only a "significant percentage" of
consumers have access then a qualification is needed (e.g.,"package may not be recyclable in your
area"), and if less then a "significant percentage" have access, an even stronger qualification is required
(e.g., "product recyclable only in the few communities that have a recycling program").
Recycled Content
Claims of "recycled materials" or other claims of recycled content should be qualified to indicate the percentage of recycled content,
by weight. Ifthe materials use less than 100% pre-consumer recycled content, marketers must be able to show that these materials
would otherwise have entered the solid waste stream.
Degradable/Compostable
Marketers should also qualify claims that products are biodegradable, degradable or photodegradable by indicating the rate and extent
of degradation in the environment in which the product or packaging is typically disposed. Qualification is not necessary when the
company can substantiate that the product or package to which the claim refers will completely break down and decompose into
elements found in nature within a short period of time (i.e., one year) after customary disposal.In the proposed revisions, the FTC
explains that any unqualified degradable claims for products or packages destined for landfills, incinerators, or recycling facilities are
deceptive because decomposition will not occur within one year.
If an unqualified compostable claim is used, all materials in the product/package should break down in a safe and timely manner (i.e.,
in approximately the same time as the materials with which it is composted).
"Free-of"
In the proposed revisions, the FTC advises companies that -- even if true -- claims that an item is "free-of" a substance may be
deceptive if:
- The item has substances that pose the same or similar environmental risks as the substance which the
product is claimed to be free of; or
- The substance has never been associated with the product.
Carbon Offset
The proposed revisions provide new advice about carbon offset claims. Marketers should employ competent and reliable scientific
and accounting methods to support their carbon offset claims. Additionally, companies should disclose if the offset represents
emissions reductions that will not occur for two or more years. Offsets that are required by law should not be advertised.
Renewable Energy/Renewable Materials
The proposed revisions advise marketers to ensure that claims for products made with "renewable energy" and/or "renewable
materials" are qualified and quantified. For renewable energy claims, companies should specify the source of renewable energy, and,
forrenewable materials claims, they should provide specifics about the material used, the material's sourcing, and why it is renewable.
Unqualified renewable energy claims should not be made unless all, or virtually all, of the "significant manufacturing processes
involved in making the product or package are powered with renewable energy or conventional energy offset by renewable energy
certificates." Likewise, marketers should not use unqualified renewable material claims unless the item is made entirely with
renewable components (excluding minor, incidental components).
Conclusion
As companies and advertisers increasingly use claims of sustainability or environmental friendliness to market their goods, the FTC
will continue to monitor these claims to protect consumers. The FTC's Guide for the Use of Environmental Claims provide
companies with some guidance on making "green" claims. At its core, the Guide requires companies to be able to substantiate their
environmental claims. This QuickCounsel provides an overview of the claims the Guide covers and guidance on how advertisers
must limit their language to avoid liability.
*This article was prepared with the assistance of Stosh Silivos, a law student currently attending Columbia Law School.
Web Resources
- Greenwashing Index (2011)
- FTC Moves May Signal Start of 'Greenwashing' Crackdown (NY Times 2010)
- The Sins of Greenwashing (Terrachoice 2010)
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