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FTC Green Guides’ Proposed Revisions Unveiled

The Federal Trade Commission (FTC) has proposed several revisions to its “Green Guides” that help companies avoid making misleading environmental claims.

Some of the biggest proposed changes (PDF) include new guidance on marketers’ use of product certifications and seals of approval, as well as claims for renewable energy, renewable materials, and carbon offsets.

The revised Green Guides advise marketers not to make blanket or general claims that a product is “environmentally friendly” or “eco-friendly,” as well as caution them not to use unqualified certifications or seals of approval and that the certifications or seals should be specific and clear.

“Clearly this means that marketers are going to have to provide more proof and provide it at point of sales for certain common environmental claims that they are making. If something is claimed to be environmentally-friendly, they are going to have to prove the why and find a place on their package or shelf to do it. Doing it on their Website isn’t good enough, according to what the FTC is saying,” said Mike Lawrence, chief reputation officer for Cone LLC in Boston, Mass.

Lawrence also noted that this level of disclosure goes beyond what many environmental marketers have been doing, and perhaps beyond what many of them would like to do.

“FTC is clearly sending a signal to business that they aren’t trying to stop or significantly inhibit this type of marketing communications but rather channel it into a place that solves some of the problems without making advertisers’ and marketers’ lives too much harder,” Lawrence said. “If marketers are upset with this, they shouldn’t be. They got off easy.”

According to the Ecolabel Index, there are currently 349 seals and certifications for marketing green products worldwide, with 88 used in North America alone, reports the New York Times.

Jon Leibowitz, chairman of the FTC told The New York Times, referring to customers, that “in the last five years or so there’s been an explosion of green claims and environmental claims. It’s clear that they don’t always know what they are getting.”

According to Cone’s 2010 Shared Responsibility Study, 92 percent of consumers want companies to tell them what they’re doing to improve their products, services and operations; however, 87 percent of respondents believe that they only share positive data about their efforts and 67 percent are confused by the messages companies use to talk about their social and environmental commitments.

Last year, the 2009 Conscious Consumer Report from BBMG found that that there were so many seals and certifications related to “green” and environmental attributes of products and services that many such marks risk losing their effectiveness.

In August, Christopher Cole, an advertising-law specialist and partner with law firm Manatt Phelps & Phillips in Washington, told Advertising Age that the green guides could influence efforts by retailers such as Walmart to institute a sustainability-rating system for products.

Another proposed change advises marketers how consumers are likely to understand certain environmental claims, including that a product is degradable, compostable, or “free of” a particular substance.

They also will provide advice on claims not currently addressed in current guides including claims about renewable materials, renewable energy and carbon offsets.

The new guides come at a time when the FTC is beefing up its enforcement. So far, the FTC has brought seven environmental advertising enforcement actions under the Obama administration, compared to zero during the eight years of the Bush administration, according to the article.

In June last year, the FTC charged Kmart Corp., Tender Corp., and Dyna-E International with making false and unsubstantiated claims that their paper products were “biodegradable.”

In August 2009, the FTC also charged four companies — Sami Designs LLC, dba Jonäno; CSE Inc., Mad Mod and Pure Bamboo LLC and the M Group — selling clothing marketed as made from bamboo with deceptive advertising and marketing claims.

The FTC isn’t the only organization watching green claims. Last month, The National Advertising Division (NAD) of the Council of Better Business Bureaus recommended that Seventh Generation either modify or discontinue certain advertising claims for the company’s household cleaning and laundry products. This came after the products were challenged by Procter & Gamble.

NAD also found issues with Chlorox for its Clorox Green Works line.

The FTC is seeking public comments on the proposed changes until December 10, 2010, after which it will decide which changes to make final.

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