The Federal Trade Commission (FTC) issued revised “Green Guides” this week to help ensure that manufacturers’ claims about environmental attributes of their products are truthful and nondeceptive. The changes include new sections on the use of carbon offsets, green certifications and seals, and renewable energy and renewable materials claims.

In revising the Green Guides, the FTC modified and clarified sections of the previous Guides and provided new guidance on environmental claims that were not common when the Guides were last reviewed. The new section on certifications and seals of approval, for example, emphasizes that some certifications and seals may be considered endorsements that are covered by the FTC’s Endorsement Guides, and includes examples that illustrate how marketers could disclose a “material connection” that might affect the weight or credibility of an endorsement. 

This could apply to companies that create their own non-third-party-certified green labels or those that promote labels from organizations with which they have a relationship, says sustainable products expert Nadav Malin, president of BuildingGreen.

“I found it really interesting that if a manufacturer is using any kind of green label or certification and has a material connection or financial relationship with the certifying organization, the company has to disclose it,” says Malin.

In addition, the Guides caution marketers not to use environmental certifications or seals that don’t clearly convey the basis for the certification, because such seals or certifications are likely to convey general environmental benefits.

The Guides also caution marketers not to make broad, unqualified 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, says FTC attorney Laura Koss, making these claims nearly impossible to substantiate. The FTC recommends that marketers qualify environmental claims and limit them to a specific benefit, such as recyclable or biodegradable qualities.

“The company has to state why they consider their product green,” Koss explained during a news conference. “If they just say it’s ‘green’ or ‘environmentally friendly,’ that’s sure to be seen as deceptive.”

The Guides do not address use of the terms “sustainable,” “natural,” and “organic.”  Organic claims made for textiles and other products derived from agricultural products are covered by the U.S. Department of Agriculture’s National Organic Program.

The Guides also:
• Advise marketers not to make an unqualified degradable claim for a solid waste product unless they can prove that the entire product or package will completely break down and return to nature within one year after customary disposal;
• Caution that items destined for landfills, incinerators, or recycling facilities will not degrade within a year, so marketers should not make unqualified degradable claims for these items; and
• Clarify guidance on compostable, ozone, recycled content, and source reduction claims. For example, Malin says, the new Guides are much more specific about what constitutes a recyclable product, which is tricky to define because different materials are recyclable in different areas of the country, and some regions have no recycling centers at all.

“If a specific threshold of consumers—60%--can easily recycle the product then the company can label it to say ‘ This may be recyclable in your area,’ but they can’t make a blanket statement that it’s a recyclable product,” says Malin.

GREEN CLAIMS
The introduction of environmentally friendly products into the marketplace is a win for consumers who want to purchase greener products and for producers who want to sell them, FTC chairman Jon Leibowitz said during the press conference.  “But this win-win can only occur if marketers’ claims are truthful and substantiated.”

The Green Guides—which are effectively immediately—are not agency rules or regulations, says Leibowitz.  Instead, they describe the types of environmental claims the FTC may or may not find deceptive under Section 5 of the FTC Act.  Under Section 5, the agency can take enforcement action against deceptive claims, which ultimately can lead to FTC orders prohibiting deceptive advertising and marketing and fines if those orders are later violated.

Over the years, there have been many highly publicized cases of companies being fined for “greenwashing” in their marketing materials, Malin says. “The FTC does take this very seriously.”

The revisions take into account more than 5,000 total comments received since the FTC released the proposed revised Guides in fall 2010.  They also include information gathered from three public workshops and a study of how consumers perceive and understand environmental claims.

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