On October 1, 2012, the FTC issued its revised “Green Guides,” which “apply to environmental claims in labeling, advertising, promotional materials, and all other forms of marketing in any medium, whether asserted directly or by implication, through words, symbols, logos, depictions, product brand names, or any other means.” 16 CFR § 260.1(c). See FTC Release.

The Green Guides provide guidance to the marketplace describing the types of environment claims the FTC may find constitute deceptive advertising in violation of Section 5 of the Federal Trade Commission Act. The “Green Guides” cover a wide array of topics ranging from general environmental benefit claims, to carbon offsets, to degradable claims, to renewable energy claims.[1]

The FTC provided an example of an environmental claim involving a brand name. The FTC stated:

The brand name “Eco-friendly” likely conveys that the product has far-reaching environmental benefits and may convey that the product has no negative environmental impact. Because it is highly unlikely that the marketer can substantiate these claims, the use of such a brand name is deceptive.

16 CFR § 260.4(d), example 1.

The FTC further explained that a broad claim such as “Eco-friendly” may be difficult for consumers to interpret and “likely to convey a wide range of meanings.” 16 CFR § 260.4(b). The FTC concluded: “Because it is highly unlikely that marketers can substantiate all reasonable interpretations of these claims, marketers should not make unqualified general environmental benefit claims.” Id. Instead, marketers “should use clear and prominent qualifying language that limits the claim to a specific benefit or benefits.”

With respect to the term “eco-friendly,” the FTC recommended the marketer take several steps in order to avoid a deceptive environmental claim:

A claim, such as “Eco-friendly: made with recycled materials,” would not be deceptive if: (1) the statement “made with recycled materials” is clear and prominent; (2) the marketer can substantiate that the entire product or package, excluding minor, incidental components, is made from recycled material; (3) making the product with recycled materials makes the product more environmentally beneficial overall; and (4) the advertisement’s context does not imply other deceptive claims.

16 CFR § 260.4(d), example 1.

The FTC also provided guidance on substantiating environmental marketing claims:

[A] reasonable basis often requires competent and reliable scientific evidence. Such evidence consists of tests, analyses, research, or studies that have been conducted and evaluated in an objective manner by qualified persons and are generally accepted in the profession to yield accurate and reliable results. Such evidence should be sufficient in quality and quantity based on standards generally accepted in the relevant scientific fields, when considered in light of the entire body of relevant and reliable scientific evidence, to substantiate that each of the marketing claims is true.

16 CFR § 260.2.

Although the Green Guides constitute neither law nor regulation, the FTC cautioned that compliance with other federal, state or local laws—such as labeling requirements—will not necessarily preclude the FTC from taking action under the FTC Act for failing to abide by the Greed Guides. 16 CFR 260.1(b). The FTC also stated that the Green Guides is not limited to business-to-consumer transactions, but also apply to business-to-business transactions. 16 CFR § 260.1(c).

FTC Chairman Jon Leibowitz stated that the Green Guides will benefit the competitive marketplace: “The FTC’s changes to the Green Guides will level the playing field for honest business people and it is one reason why we had such broad support.” See Oct. 1, 2012 Environment News Service Article.

The FTC first issued its Green Guides in 1992 to help marketers avoid making misleading environmental claims. The agency revised the Guides in 1996 and again in 1998, and proposed further revisions in October 2010. According to the FTC, this month’s revised Guides take into account thousands of comments FTC received since releasing the proposed revised Guides in the fall of 2010. They also include information from public workshops and a study of how consumers perceive and understand environmental claims.

Sources: Federal Trade Commission Release: “Issues Revised ‘Green Guides,’ Will Help Marketers Avoid Making Misleading Environmental Claims” (Oct. 1, 2012); Environment News Service, “Feds Update Truth-in-advertising Guides for Green Marketing” (Oct. 1, 2012)

This article was prepared by Sue Ross (sross@fulbright.com / 212 318 3280) of Fulbright’s Privacy Competition and Data Protection Practice.

 

[1] The FTC provided guidance in 15 different areas of environmental areas: general environmental benefit claims, carbon offsets, certifications and seals of approval, compostable claims, degradable claims, free-of claims, non-toxic claims, ozone-safe and ozone-friendly claims, recyclable claims, recycled content claims, refillable claims, renewable energy claims, renewable materials claims, and source reduction claims. 16 CFR §§ 260.4-260.17.