FTC on Greenwashing: Is That All There Is?

June 20, 2009

Valerie Davis
EnviroMedia Social Marketing
Green Canary Sustainability Consulting

Email this story Print this post Add your comments

The Federal Trade Commission in mid-June charged three companies, Kmart Corp., Tender Corp. and Dyna-E International, with making false and unsubstantiated claims that their paper products were “biodegradable.”

Kmart and Tender agreed to administrative settlements in the cases against them, while the case against Dyna-E will be litigated. The FTC made this announcement in testimony before the U.S. House Subcommittee on Commerce, Trade, and Consumer Protection of the Committee on Energy and Commerce in a hearing titled, “It’s Too Easy Being Green: Defining Fair Green Marketing Practices.”

While this sounds like a step forward in protecting consumers from greenwashing, other developments at the hearing indicated that the FTC is not on target for enacting new green marketing standards in mid-2009. After an FTC workshop last year, James Kohm, Associate Director of the Enforcement Division in the FTC’s Bureau of Consumer Protection, told Kevin Tuerff, CEO of Green Canary Sustainability Consulting, that the agency would issue new guides for the use of environmental marketing claims (”Green Guides”) around the middle of this year.

Representative Bobby Rush, D-Ill., chairman of the Subcommittee on Commerce, Trade and Consumer Protection of the House Committee on Energy and Commerce said at the hearing, “More than ever before, the shelves of our supermarkets, hardware, ‘Big Box,’ home improvement, and pet stores are being lined with goods bearing labels touting themselves as ‘natural,’ ‘biodegradable,’ ‘eco- friendly,’ ‘sustainable,’ ‘carbon-neutral,’ ‘recyclable’ and ‘non-toxic,’ just to name a few.” Congressman Rush is also concerned about inauthentic green certification labels, noting, “For a fee, these companies will certify anything as green, affording false comfort to purchasers that the products meet environmental and safety standards.”

Last year, under the FTC’s current review of the 1992 Green Guides, the agency held a series of workshops and plans to study consumers’ understanding of particular claims, such as “sustainable” and “carbon neutral,” which were not common when the FTC last updated its guides.

EnviroMedia/Green Canary’s Kevin Tuerff, Steve Roberts and I participated in the workshops. We had a hunch the Feds would take a long time to act, which is why in January 2008 we created EnviroMedia’s Greenwashing Index, in conjunction with the University of Oregon School of Journalism and Communications.

In Mr. Kohm’s Congressional testimony, he stated that the FTC does not set environmental standards or policy, but rather protects consumers from unfair or deceptive practices. According to a report by Reuters, Kohm said the FTC tried to collect feedback from consumers about perception and understanding of green claims, but didn’t receive many comments.

“Without this data,” Kohm said, “the Commission would face the difficult choice of either providing guidance that might inadvertently chill otherwise useful green claims or forgoing valuable guidance altogether.”

So now, nearly a year and a half later, the agency is well behind schedule and plans to conduct its own study of consumer understanding of green marketing claims. Their analysis of that data won’t be completed until later this year, further delaying the implementation of the new Green Guides. This division of the FTC has undoubtedly been under-resourced and needs more attention.

Reuters wrote, “Depending on how new rules are structured, the changes could also provide a boost for startups that fall on the greener end of the spectrum in these sectors, as well as those working on tools for informing consumers or monitoring and measuring the environmental impact of companies’ operations.”

We have confidence the Obama Administration will eventually deliver the new Green Guides. In the meantime, what’s a consumer to do?

According to a January 2009 national study by EnviroMedia and Green Seal, 30 percent of Americans had no idea how to evaluate whether a company’s green claims are true. And another 10 percent blindly trusted the claims – that means 40 percent of Americans are very much in need of proper education on how to scrutinize green claims. That is all the more reason to update and enforce the Green Guides. A growing number of U.S. consumers (17 percent) are doing online research into a company’s green claims.

The bigger question is whether marketers will continue thumbing their noses at authenticity in green advertising and our global environmental challenges. Our own ad industry doesn’t want regulation but isn’t stepping up to self-educate and enforce its own code of ethics.

Valerie Davis is CEO of EnviroMedia Social Marketing and President of Green Canary Sustainability Consulting

Email this story Print this post Add your comments

Advertisers

Stay competitive through sustainability.

Find out how at the SAP Sustainability Resource Center. >>

Unclear about the EPA's new GHG Rule?

Learn how it could affect your business. >>

EPA mandatory emissions reporting starts Jan 1st

CSA Standards can help your organization get ready for compliance. Find out how. >>

Survey Results: Product Environmental Compliance Best Practices

How to achieve compliance at a significantly lower cost. Download the full report. >>

Join the Discussion

Reader Comments

When I read the FTC’s comments yesterday, I had the exact same reaction. Thank you Valerie for your comments.

One thing I’d like to add, is that the market really needs to take care of this. We need for “green” something like “Certified Organic” to emerge. Right now there are just way to many “green certifications” that are popping up, that have no real meat behind them, and therefore because there are multiple certifications, there really isn’t one. What we need is something like the GRI to emerge, something that can become the defacto “green” standard, like what GRI has become for CSR reporting and what the Climate Registry has for GHG reporting.

Kevin Wilhelm | June 23rd, 2009

Recent Daily News [ see all ]

11/20/2009
11/19/2009
11/18/2009

Charts [ see all ]

European Paper Industry Cuts CO2 Emissions by 42% since 1990

S. America Takes Most Urgent View of Copenhagen Talks

Nike Tops Annual Climate Action Scores

Oceans May Trap more Carbon than Forests

Jobs

View All Jobs >> Post a Job >>

Comments and Discussions

Environmental Leader on S. America Takes Most Urgent View of Copenhagen Talks
"The survey respondents (the PDF report mentions 4,000 respondents in 38..."

Jake on UPS Trying New Hydraulic Hybrid Trucks
"A point of clarification: the Reuters press release referenced herein reports that 20 UPS will purchase..."

Custom Organic Shirts on S. America Takes Most Urgent View of Copenhagen Talks
"90% of North Americans believe it is urgent to get a global climate..."

peter dublin on California City’s Green Building Ordinance Applies to Commercial Buildings
"Why energy efficiebnt regulation on buildings –..."

JEONG CHUN PHUOC on EU Poised to Give Heavy Industry Free Carbon Permits
"“Competitive Intelligence in Environmenting : A Holistic Deal for..."

Philip Vandenberg on Building an Energy-Efficient Data Center Using Virtualization Technology
"Rob has implemented many best practices for data centres..."

George Hoguet on Rising Sea Levels Would Hit U.S. East Coast Hardest
"Want to add some pressure into the system? Check out the Facebook group -NO TV..."

Environmental Leader