FTC Proposes Revisions To Green Marketing Guidelines
The Federal Trade Commission (FTC) is proposing revisions to the guidance that it gives marketers to help them avoid making misleading environmental claims. The proposed changes are designed to update the agency's Green Guides and make them easier for companies to understand and use.
The changes to the guides include new guidance on marketers' use of product certifications and seals of approval, "renewable energy" claims, "renewable materials" claims, and "carbon offset" claims. The FTC is seeking public comments on the proposed changes until December 10, 2010.
"In recent years, businesses have increasingly used 'green' marketing to capture consumers' attention and move Americans toward a more environmentally friendly future. But what companies think green claims mean and what consumers really understand are sometimes two different things," says FTC Chairman Jon Leibowitz, in a news statement.
The Green Guides were first issued in 1992 to help marketers ensure that the claims they are making are true and substantiated. The guides were revised in 1996 and 1998.
The revised guides caution marketers not to make blanket, general claims that a product is "environmentally friendly" or "eco-friendly" because the FTC's consumer perception study confirms that such claims are likely to suggest that the product has specific and far-reaching environmental benefits. Very few products, if any, have all the attributes consumers seem to perceive from such claims, making these claims nearly impossible to substantiate.
The proposed guides also caution marketers not to use unqualified certifications or seals of approval — those that do not specify the basis for the certification. The guides more prominently state that unqualified product certifications and seals of approval likely constitute general environmental benefit claims, and they advise marketers that the qualifications they apply to certifications or seals should be clear, prominent and specific.
Next, the proposed revised guides advise marketers how consumers are likely to understand certain environmental claims, including that a product is degradable, compostable or "free of" a particular substance. For example, if a marketer claims that a product that is thrown in the trash is "degradable," it should decompose in a "reasonably short period of time" — no more than one year.
The proposed changes would also update the guides by giving advice about claims that are not currently addressed, such as those about the use of renewable materials and renewable energy. The FTC's consumer perception research suggests that consumers could be misled by these claims because they interpret them differently than marketers intend.
The revisions also provide new advice about carbon offset claims. The guides advise marketers to disclose if the emission reductions that are being offset by a consumer's purchase will not occur within two years.
As purchasers of green products, distributors need to pay attention to these proposed revisions and understand exactly what their suppliers are telling them so they are not buying products that could be problematic for their customers, says Steve Ashkin, president of the Ashkin Group, Bloomington, Ind. In addition, since distributors will be marketing these products, they need to make sure their claims are accurate, otherwise distributors could be held liable and subject to fines.
Distributors could also be challenged by competitors or customers for selling products that violate FTC guidelines, which would cause them to lose market credibility, says Scot Case, market development director, UL Environment, Reading, Pa.
"At the end of the day good intentions don't count," adds Ashkin. "You have to get the information right."