Overview
As part of the Federal Trade Commission's (FTC or the Commission) efforts to update its Guides for the Use of Environmental Marketing Claims (Green Guides), the FTC held a workshop on May 23, 2023 to examine "recyclable" claims.1The four-hour event, Talking Trash at the FTC, featured panels of experts from industry, NGOs, states, and municipalities. Although the panelists' views varied widely, several key themes emerged, highlighting the important issues implicated by the Green Guides updates, and identifying ongoing opportunities for businesses to participate in the review process.
Revisiting the "Substantial Majority" Test and the Importance of Consumer Perception
The current iteration of the Green Guides focuses on the availability of recycling and provides that unqualified recyclable claims are permissible only if recycling facilities are available to a substantial majority of consumers. The FTC historically interprets a substantial majority to mean 60% or more of consumers or communities in the markets where the item is sold. However, the new request for comment — and the FTC workshop moderators — asked whether this 60% threshold should be scrapped in favor of a new standard rooted in whether items are actually recycled.
Notably, the FTC seemed interested in consumers' perception of whether a "recyclable" claim is appropriate for those materials collected but not actually recycled, a point previously highlighted in Chair Lina Khan’s December 14, 2022 statement announcing the review of the Green Guides (last updated in 2012), and the FTC’s Request for Comment published on December 20, 2022. Attendees’ feedback on the substantial majority test diverged: while some panelists argued for a claim standard tied to whether a material is actually recycled, others asserted that consumer perception data suggests consumers do not interpret "recyclable" claims to be tied to actual recyclability.
Other issues that were raised in relation to the substantial majority test include:
- Differing markets: Some panelists discussed the marketplace for recyclable material, which directly impacts whether or not specific types of products are ultimately recycled. In addition to the type of material, the availability standard used to substantiate recyclable claims does not differentiate between types of recycling facilities or require any specific qualifications regarding the type of recycling facility that may be most appropriate, which prompted some speakers to push for more stringent labeling requirements.
Some attendees suggested that measures of access to recycling facilities should incorporate evaluation of convenience factors, such as ease of travel and proximity, and some noted the differences in convenience and access between curbside and drop-off recycling programs. Select panelists urged the FTC to identify preferred methodologies to measure recyclability access.
- “Wishcycling”: Similar to discussions about access to recycling facilities and programs, panelists also explained that “wishcycling,” in which well-intentioned consumers mix non-recyclable items into recycling bins, can ultimately cause downstream issues in materials recovery facilities (MRFs).
- Circular Economy: In line with some panelist’s views regarding tying recyclable claims to emphasize whether goods are actually recycled, several panelists used the term “circular economy” to refer to reusing products, rather than scrapping them and then extracting new resources. Some panelists and attendees pushed for further guidance from the FTC regarding how companies may substantiate claims that products promote a circular economy.
Despite the wide spectrum of viewpoints, there was agreement on at least one point: the importance of consumer data. In his opening remarks, FTC Associate Director James Kohm reinforced the call to comment, emphasizing the importance of comments that provide additional consumer perception evidence that could update and refresh the Commission’s understanding of recyclability claims. This is consistent with other FTC guidance and rulemaking activity.
Debating Chemical Recycling and Other Emerging Technologies
Another issue that garnered significant discussion concerned whether chemical recycling should appropriately be described as recycling if the form of chemical recycling is pyrolysis, or thermal decomposition, as opposed to other forms of chemical recycling that result in polymers broken down into constituent monomers that can be reformed into new plastic materials. Whether claims around chemical recycling resulting in new plastics will be permitted by the Green Guides is an open question, and the FTC did not commit to clarifying this issue during its review.
Call for Brightline Rules and Clear Industry Guidance
Attendees and the FTC moderators also discussed the proliferation of recycling-related laws across jurisdictions, and the challenges with complying with multiple, sometimes contradictory, standards — another topic highlighted in the Request for Public Comment. The focus was on the Resin Identification Coding (RIC) system, required by law in many states, which was developed as an aid for recyclers to identify the resin type of plastic for proper sorting and recycling. However, it was suggested that RICs can sometimes cause confusion, as some plastic products bearing certain RIC codes are not as widely recycled as others. Many state laws require the labeling of RICs to be displayed inside a chasing arrows symbol, which some suggested could contribute to confusion about recyclability for plastic articles bearing RICs. In contrast, it was noted that California, through SB 343, will prohibit the inclusion of the RIC code inside a chasing arrows symbol unless the specific product meets California’s statewide criteria for recyclability. The emerging patchwork of state laws regarding labeling requirements — and the potential for contradictory and confusing labeling guidance — remains a key issue that will need to be resolved.
Exploring Potential Rulemaking and Targeted Guidance
Another important topic of debate was whether the Green Guides should be transformed (in whole or in part) into enforceable regulations through the formal rulemaking process. The potential benefit of industry-specific guidance, with advice tailored to markets that have seen particularly high legal activity and debate around “green” marketing, was also raised. For example, attendees discussed textile recycling — an issue particularly prominent in the fashion and retail industry, especially in light of legislation pending in California, New York, and before the European Commission.
The FTC’s desire to codify the Green Guides into a trade regulation rule is likely in reaction to the Supreme Court’s 2021 ruling in AMG Capital Management LLC v. FTC, which held that the Commission cannot obtain equitable monetary relief in federal courts under Section 13(b) of the FTC Act. The conversion of informal guidance into formal rules allows the Commission to seek civil monetary penalties for violations, and is a tactic the FTC has utilized elsewhere (like its 2021 Made in the USA Rule and the Advance Notice of Proposed Rulemaking regarding endorsements and reviews).
Opportunity for Comment
The Commission is accepting comments until June 13, 2023 for those who wish to provide input on the topics discussed at the workshop. This provides businesses an important opportunity to shape the next iteration of the Green Guides. Please do not hesitate to contact the authors of this alert for help with any issues concerning participation in the public comment period for the Green Guides or environmental marketing in general.
Endnotes
1 On December 20, 2022, the FTC published in the Federal Register a Request for Comment seeking public input on potential updates to its Green Guides. A summary of the proposed changes can be found here.
While the original deadline to submit comments on the proposed changes to the Green Guides was February 21, 2023, the FTC extended the public comment period to April 24, 2023. The Commission received more than 7,000 comments. Moreover, the Commission will accept comments on the topics addressed at the workshop until June 13, 2023.
