In an economy where consumers are increasingly skeptical of environmental marketing claims, a growing number of consulting firms offer advice and certifications to help companies advertise their green credentials. However, not all environmental consulting firms are created equal. In North America and Europe there are a number of unique firms that fulfill a quasi-regulatory role as administrators for government-sanctioned programs, providing environmental certifications for manufacturers and retailers. Meanwhile, in the United States, the Federal Trade Commission issued a press release last month disclosing the fact that the agency is prosecuting the firm that administrates the “Tested Green” environmental certification program.
In the case of Tested Green, an operation managed by the curiously named “Nonprofit Management LLC,” the FTC claims that it stepped in because the company was selling its environmental certification for $189.95 (“Rapid Certify”) or $549.95 (“Pro-Certify”) based on a single criterion: a valid credit card number. According to the FTC’s complaint released last month, Nonprofit Management did not take any meaningful steps to determine the environmental attributes of its certified products. Nonetheless, the FTC found that 129 companies purchased the bogus Tested Green certification.
Look outside the U.S., and there’s something completely different going on. In Canada, there is a government sanctioned environmental certification that companies can obtain through the “EcoLogo” program. But the Canadian government does not test and evaluate products for companies that want to advertise with the EcoLogo certification; Canada has appointed the private firm TerraChoice as the administrator of the program. Not surprisingly, TerraChoice is a vocal advocate for bona fide environmental certification and a foe of “greenwashing.” The 2010 TerraChoice “Greenwashing Report” issued by the firm last fall claims that 95% of the green products evaluated by the company violated at least one of the “sins of greenwashing,” as defined by TerraChoice.
The European Union has a state sanctioned environmental certification that is analogous to Canada’s EcoLogo, the “Ecolabel” program. And again, as in Canada, the government-sponsored certification program is not run by the EU government. Private firms in each member state have been appointed to administer the program and issue Ecolabel certification to companies that meet the program requirements. For example, two firms, TUV NEL Ltd. and Oakdene Hollins, jointly administrate the Ecolabel Delivery program in the United Kingdom; the Afnor Groupe provides consulting services and administrates the Ecolabel program in France; and the firm RAL administrates the Ecolabel in Germany. In addition to the EU Ecolabel, RAL also markets an environmental certification program known as the “Blue Angel.”
While there isn’t any guarantee of immunity, it would seem that in Europe and Canada manufacturers that make the investment in obtaining Ecolabel or EcoLogo certification could can confidently marketing their products, on the theory that their certifications are already government approved, albeit indirectly. Of course, there are perfectly reputable independent certification programs available too, in Europe, Canada, and the United States. And while Canada and the European Union have appointed the creators of the “Blue Angel,” and other firms with the power to issue government-sponsored certifications, those governments retain enforcement powers to punish fraudulent programs like Tested Green.
So what does all this add up to? There are a couple interesting conclusions that one can draw.
First, it seems highly unlikely that the FTC will ever appoint or endorse a private firm to provide certification of environmental products. That type of public-private relationship would probably encounter fierce opposition in the United States, for a variety of reasons. For one thing, manufacturers and retailers would likely object to the idea of a single private marketing firm having the ability to sell government-sanctioned certifications. Other competent certification firms would also feel unfairly excluded, of course. For better or worse, in the United States environmental certification firms will have to compete on a level playing field – without the benefit of government endorsement or appointment.
Second, the FTC’s recent action against Tested Green, and the broader agency initiative to revise the Green Guides on environmental marketing claims, reflect the fact that the FTC will remain focused on defining and challenging deceptive conduct in the context of environmental marketing.
Ultimately, do not expect U.S. regulators to be identifying any “Angels” in the near future; but do expect them to continue to pursue the devils and other miscreants in the green marketing space.
Joseph (Jay) Eckhardt is an attorney at Stoel Rives, LLP, based in Portland, Oregon. Jay writes and speaks frequently on legal issues relating to green marketing and is the editor of the firm’s FTC Green Guides Resource Page.