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FTC Releases New Green Marketing Guides

Agency poised to crack down on trumped-up claims
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The feds are looking to crack down on marketers that mislead consumers with trumped-up green marketing claims. The Federal Trade Commission announced today the final revisions to its Guides for the Use of Environmental Marketing Claims, commonly referred to as the “green guides.”

First published in 1992, the green guides help marketers and advertisers avoid making deceptive, sweeping eco claims without proof or qualification. Since the guides were last updated in 1998, more companies have jumped on the eco bandwagon, developing greener products and then marketing those eco advantages to consumers.

Claiming that a product helps the environment lures consumers almost as effectively as sex. Even in a tough economy, four out of five consumers, or 82 percent, say they are buying green products, per a 2009 study by Green Seal, the nation’s original green seal of approval company.

“If enough deception or uncertainty surrounding environmental claims creeps into the marketplace, consumers will tune them out altogether,” said FTC chairman Jon Leibowitz during a press conference.

The new green guides modify and clarify sections of the previous guides and provide new guidance on environmental claims that were not common when the agency last reviewed them, including carbon offsets, free-of and non-toxic claims, made of renewable and energy materials claims, and the use of green certificates and seals of approval.

Although the new guidelines are not law, they describe how the FTC and consumers might interpret environmental claims and that could lead the FTC to bring a deceptive advertising enforcement action as part of its statutory authority.

For example, marketers should avoid making broad, unqualified claims that a product is environmentally friendly or eco-friendly because consumers interpret those claims as far-reaching. Any marketer claiming it is “green” or “eco-friendly” must be qualified. For biodegradable claims, marketers must be able to prove that the entire product or package will completely break down within a year.

The FTC also added a new section on certifications and seals of approval, a popular way for companies to let consumers know products meet certain green standards. Certificates are now classified as endorsements, therefore covered by the FTC’s endorsement guides, emphasizing that companies must disclose any relationship between the endorser and the certificate company that might be unexpected, such as paying for the endorsement.

“Our purpose is to make sure consumers that want to buy green products are getting truthful information,” said James Kohn, associate director of enforcement for the FTC’s bureau of consumer protection. "There are two kinds of companies; those that live over the line and those that step over the line. The guides are written for companies that are trying to get it right." 

FTC's Leibowitz said he expected the guides would have a "significant" impact on marketers. The agency has already begun to step up its enforcement of shaky environmental claims, recently citing five window companies for making claims about how much energy they would save.  

“It is certain [the new green guides] will change behavior among marketers over time,” wrote Christopher Cole, a partner in Manatt Phelps & Phillips' Washington, D.C., office. “For those who ignore the new rules, one can predict that rigorous law enforcement activity will begin soon."