New FTC "Green Guides" Address Environmental Claims in Advertising

Advertisers increasingly want to point out eco-friendly features in their consumer products and services. The FTC has now issued its long-awaited, updated “Green Guides” to address such claims.

The “Guides for the Use of Environmental Marketing Claims” provide the FTC’s current views about “green” advertising and are designed to “help marketers avoid making environmental marketing claims that are unfair or deceptive” under the Federal Trade Commission Act, 15 U.S.C. § 45.

The Guides run 36 pages, but the basic message is simple. Do not lie, misrepresent, stretch the truth, or hide the facts when making advertising claims about the environmental attributes of products or services. The Guides set out general FTC principles as well specific guidance on particular sorts of claims, and will be the basis for FTC enforcement actions. The Guides provide numerous useful examples on applying them to common situations, in easy-to-read format. They approach environmental advertising claims — both express and implied — from the standpoint of the consumer. In summary:

• Qualifications and disclosures should be “clear, prominent, and understandable” using “plain language and sufficiently large type.” 
• What is recyclable? Is it the package or the product? That needs to be clear. 
• Eco-claims should not be overstated. The Guides provide as an example a claim that a rug is labeled as “50 percent more recycled content than before,” when the recycled content increased from two to three percent. While technically accurate, the claim will likely convey a false impression to consumers. 
• As with any comparative claims, substantiation is needed, and the basis for the comparison should be “clear to avoid consumer confusion about the comparison.” 
• The Guides note, “It is deceptive to misrepresent, directly or by implication, that a product, package, or service offers a general environmental benefit.” Such claims are difficult to interpret and incorrectly convey that the use of a product has no negative environmental impact. “Because it is highly unlikely that marketers can substantiate all reasonable interpretations of these claims, marketers should not make unqualified general environmental benefit claims.” A given make of auto may emit fewer pollutants than other autos, but that is not necessarily an environmental benefit. In the eyes of the FTC, it is only a lesser environmental harm. The Guides note that terms like “eco-smart” and “eco-friendly” imply a general environmental benefit that may not be possible to substantiate. 
• Technical matters, such as claims about carbon offsets or that a product is compostable, degradable, or recyclable, need to be substantiated with good science. Claims that a product is recyclable also need to take into account whether there is a market for recycling that particular product. 
• Certifications and seals of approval need to be legitimate, third-party endorsements, not in-house or captive creations. 
• The Guides take an interesting approach to “free of” claims and similar “non-toxic” or “ozone-safe” claims. A product may be “free of X,” but if it contains Y, and Y is comparable to X, the claim is inappropriate. Any claim that a product is “free of” something (or “non-toxic,” or “ozone-free”) “should be clearly and prominently qualified to the extent necessary to avoid deception.” 
• Claims that a product is made with renewable energy likewise need to be qualified if, for example, any fossil fuel or electricity derived from fossil fuel is used to manufacture any part of the item or power any part of the service, absent offsets through renewable energy certificates. 
• Claims of “renewable materials” or “source reduction” also receive special scrutiny.

The Guides were issued October 1, 2012 and are found in 16 C.F.R. § 260. They are available online at http://www.ftc.gov/opa/2012/10/greenguides.shtm.

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Paul Bargren
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