Environmental Analyst: FTC Issues Revised Guidelines for Environmental Marketing Claims

The Federal Trade Commission (FTC) has released a proposal to update to its “Guides for the Use of Environmental Marketing Claims” (aka “Green Guides;” see 16 CFR Part 260) for public comment. While FTC expects some degree of consumer education to result from the new Green Guides, Chairman Jon Leibowitz stated in a press briefing that the Green Guides’ main focus is as a “business education effort,” particularly for those companies “who step over the line” with regard to environmental claims on their products. This proposal is the result of an extensive consultation process, and FTC is seeking additional public comment on these revisions, including proposed new guidance on marketing claims that were non-existent when the Guides were last reviewed. Comments on the revised Green Guide are due December 10, 2010. 

First issued in 1992, the Green Guides were established to ensure the usefulness of environmental marketing claims to consumers, to “help marketers make truthful and substantiated claims,” and to “avoid making deceptive claims.” The revised guidelines are meant to address the massive changes in the marketplace with regard to “green” products since the last revision of the guidelines in 1997. The revisions reflect input from three prior public workshops and an FTC-sponsored research study into consumer perception of environmental marketing claims.

FTC provides cautions regarding several types of claims both as clarification of the existing guidance and in addressing types of claims not previously covered. First, FTC is cautioning against “blanket, general claims that a product is environmentally friendly or eco-friendly,” as past consumer research showed these claims are “likely to suggest that the product has specific and far-reaching environmental benefits.” Second, FTC is also cautioning against the use of “unqualified certifications or seals of approval,” where the criteria for certification are not “clear, prominent, and specific.”

Third, FTC provides advice on making claims that a product is degradable, compostable, or free of a particular substance. A new section was written to expand current guidance regarding claims that a product is free of some substance. Most notably, this may now apply “even where an item contains a de minimis amount of a substance” and to claims that “convey additional environmental claims, including general benefit or comparative superiority claims.” However, the Green Guides caution that what constitutes a de minimis amount requires a case-by-case analysis and that an otherwise truthful free-of claim could be deceptive if , for example, the marketer makes a “free-of” claim for one substance but fails to disclose that the product contains another substance which may cause the same type of environmental harm as the absent substance.

In order to claim a product is nontoxic, the Green Guides state that “competent and reliable scientific evidence” is needed—defined as “tests, analyses, research, studies, or other evidence based on the expertise of professionals in the relevant area, conducted and evaluated in an objective manner by persons qualified to do so, using procedures generally accepted in the profession to yield accurate and reliable results.” The proposed revised guidelines now state that such evidence “should be sufficient in quality and quantity based on standards generally accepted in the relevant scientific fields, when considered in light of the entire body of relevant and reliable scientific evidence, to substantiate that [a] representation is true.”

The first proposed new addition to the Green Guides involves claims related to “use of renewable materials and renewable energy.” FTC’s research showed that consumers could be misled by these claims and thus, it cautions against the use of “unqualified renewable energy claims if the power used to manufacture any part of the product was derived from fossil fuels.”

The second proposed new addition involves claims related to “carbon offsets.” The Green Guides call for greater disclosure regarding the relationship between the consumer’s purchase and when the emission reductions will occur, especially if the reductions will not occur for two years or longer. In addition the Green Guides advise companies to “avoid advertising an offset if the activity that produces the offset is already required by law.”

Other changes to the guidelines were intended to make the existing Green Guides easier to understand and use when preparing marketing materials. For example, the language has been simplified, they have been made more “user friendly,” and redundant language has been removed. In addition, FTC proposes overhauling the overall layout of the Green Guides to help marketers find information easier and more quickly.

While FTC states that it actively consults with the Environmental Protection Agency (EPA) and other agencies to ensure there is no conflict or duplication, the proposed revisions are not completely consistent with the EPA’s guidance in certain areas such as EPA’s May 2010 Pesticide Registration Notice (PRN) involving false and misleading claims for pesticide labels. The PRN prohibits the use of the term “natural” however, the FTC Green Guides would allow the use of the term in certain circumstances. EPA has commented on the FTC Guides and stated that they should follow “established guidance,” such as the EPA Environmentally Preferable Purchasing rules. Furthermore, comments from other parts of EPA (Sustainable Products Network) stated that claims of product superiority in performance should address “key attributes” across the entire life cycle of that product.

Even when finalized, the Guides are not enforceable regulations and thus, cannot legally pre-empt any federal, state, or local laws. While this is stated in the preamble to the revised 16 CFR 260, FTC also states that compliance with these laws does not preclude FTC taking enforcement actions. Companies must carefully negotiate between the FTC guidance and the relevant EPA requirements. A complete copy of the proposal can be found here.

For further information, contact Sara Beth Watson or Erik Janus.