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July 16, 2008

FTC Examines Green Building, New Green Guides ‘Definitely’ In 2009

The Federal Trade Commission peppered green building executives with hard questions about marketing claims at the third, and perhaps final, Green Guides workshop before the agency proposes revised guidelines for green marketing in 2009.

“What specific examples (of greenwashing) in green building can you share?” asked James Kohm, associate director of the enforcement division for the FTC. “What kind of guidance should the FTC give to help marketers and sellers not step over the deception line?” He added, “We’re not an environmental standards organization and we’re not looking to what is the optimal environmental solution, but looking for competition of these claims on a non-deceptive basis.”

Carpet & Rug Institute Vice President Frank Hurd responded to the question by telling a story about a non-member manufacturer advertising that their carpet included “Up to 70 percent recycled content.”

“We put them on notice (about their exaggerated claim), but their attorney said it met FTC guidelines,” Hurd said. “That means the competitor could continue that claim, but only have five percent, or 30-percent recycled content materials in their carpet, and get credit for 70 from consumers.”

A representative of the $18 billion paint industry said current federal product labeling requirements for toxic materials translates to fewer companies that are greenwashing. “To say you’re a green product requires a real green product,” said Stephen Sides, vice president of the National Paint and Coatings Association. However, “some states like California are considering fees to regulate volatile organic compounds from paint, which drives up costs, and industry is driving down use of these materials.”

Panelists debated whether there is an acceptable metric for “what is a green home?” Despite some similarities among green certification programs, there is a considerable distrust and a lack of cooperation among forestry and other home construction industries.

“We need a common lexicon where there is a common vernacular like a nutrition label, said Michelle Moore, vice president of the U.S. Green Building Council. “Screwing in a CFL light bulb and putting in a bamboo floor does not a green-built home make.”

Green building continues to grow, even in the sluggish housing market, Moore said. “Market research estimates green building will become a $40 billion market by 2010.” Some panelists told stories about builders, realtors and home sellers who are exaggerating environmental attributes just to make the sale.” The USGBC administers the highly successful LEED standard for residential and commercial green building. Education and enforcement about those standards is now a priority.

John Girman, a panelist from the U.S. EPA, suggested the FTC could provide guidance to businesses and consumers on what to look for in a green building standard, like:

-measures that are better than local building codes,
-data about health benefits,
-systems integration, and
-third party verification.

Most speakers were consistent in calling on the FTC to do a better job of educating the marketplace that green marketing standards exist, and give a baseline for substantiating claims.

FTC’s Kohm told Kevin Tuerff of Green Canary Sustainability Consulting that there were no plans yet for additional workshops. “The Green Guides workshop is part of the FTC review process,” he said. The agency next plans to conduct additional market research. The record is open for comments about textiles and green building until August 15 via the FTC web site.

When asked about the time line for a new set of potential Green Guides, Kohm told Tuerff, “With the presidential election, it obviously won’t be in early 2009, and I don’t think it will be late 2009, but definitely 2009.”

See webcasts and transcripts here.

The Commission’s first Green Guides workshop, held in January, examined issues concerning the marketing of carbon offsets and renewable energy certificates. The most recent workshop, held in April, examined green packaging claims.

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