FTC Plots New Path for Green Guides

Some marketers call for clear definitions, enforcement to curtail unsubstantiated claims

By James C. Hyatt

At the Federal Trade Commission, it’s not easy being green.

The agency’s Green Guides for years have provided guidance on what sort of environmental claims are permissible.  But words like “sustainable” and “renewable” weren’t commonly thrown around in 1998 amid the last revision.  And few at that juncture had dreamed of “carbon offset” markets or heard of  “carbon neutral” behavior.

So while there is general agreement the guides need to be updated, the effort has stirred lots of comment.

The FTC already has held two public workshops--on green marketing and carbon claims--and is leaning toward a third exploring “green” building and “green textiles.”

Although the Green Guides aren’t hard and fast rules, the FTC can use them to bring an action against a company for unfair or deceptive acts or practices, and some marketers wish the FTC would be more aggressive.

“The number of businesses making environmental marketing claims is staggering,” commented the Harvard Law School Environmental Law & Policy Clinic in its comments to the FTC, declaring such claims make it hard for consumers to separate products with “significantly positive” attributes from “generic” green claims made by competitors.

The challenge for regulators is to help customers separate the real from the unsubstantiated while preventing competitors from gaining an unfair advantage by making misleading or unprovable claims.

GreenBlue, a Charlottesville, Va., nonprofit design firm, declared it has “seen numerous violations of the Guides on store shelves and also from material suppliers selling their products to consumer products goods companies or retailers. A level playing field for companies requires: 1. clearly defined guidance from the FTC and 2. enforcement of that guidance. Our experience is that violations of the Guides are rampant and absence of enforcement exacerbates the problem.”

The Grocery Manufacturers Association joined bakers, bottled water companies, dairy marketers and other groups telling the FTC  “… the term ‘sustainable’ is difficult to interpret and, depending on its context, may convey a wide range of meanings to consumers.” The group urged the FTC to help make environmental seals and logos clearer and easier to understand, as well as spell out when companies can rely on third-party certifications that products meet environmental standards.

Some industries don’t agree there’s a problem.

The three major advertising trade associations told the FTC: “While our members all embrace the enforcement of non-deceptive claims in advertising, there is no compelling evidence to support the need for significant changes to the Guides at this time. In fact, there is currently no evidence that consumers are confused or misled by the types of environmental marketing claims being made in today’s marketplace, or that advertisers are using environmental claims to create false or misleading advertising.”         

A number of industry comments expressed concerns that some claims aren’t adequately backed up. “We Read It on The Internet” is not adequate substantiation, asserts the Formaldehyde Council, a trade association of makers of the chemical. “There appears to be an impression among some segments of the business community that simply referencing the claims of other organizations constitutes adequate substantiation…”

Others--such as the Vinyl Institute--worry about claims saying a product is “free” of or contains “no” quantities of a certain material, suggesting another product is more environmentally beneficial. “In VI’s experience, many organizations that make ‘free’ claims fail to identify the substances that the advertised product does contain or disclose other adverse environmental impacts of that product.”

The National Recycling Coalition notes  that “there is no accepted standard protocol for ‘recycling’ or ‘recycling projects,’ hence an opportunity for development of an array of inconsistent standards that will lose meaning in the market place.”            

The New York City Department of Consumer Affairs filed comments noting that it has been encouraging electronic stores and home improvement contractors to improve their performance in the “green” marketplace.

It suggested that revised FTC guidelines need to address claims that services or businesses are “natural,” “local” and “green,” and that retailers making claims of energy efficient products should include “reasonable, quantifiable source information.”

As it moves forward, the FTC could issue proposed revisions to its Green Guides or propose entirely new regulations.