Will Revised FTC Green Guides Leave Marketers Singing the Blues?

Will Revised FTC Green Guides Leave Marketers Singing the Blues?

[Editor's Note: Executive Editor Joel Makower's take on the revised guidelines is available at GreenBiz.com.]

Will green marketers be singing the blues following the U.S. Federal Trade Commission’s long-awaited release Wednesday of proposed revisions to its “Green Guides?”

There’s no consensus on that, with initial comments ranging from little impact to predictions of wide-ranging changes, especially by lawyers. It will probably be somewhere in between. There was also concern expressed that what results from the Green Guides could end up confusing consumers even more.

The FTC proposed, among other things, that marketers avoid blanket claims that a product is “environmentally friendly” or “eco-friendly” because they are “nearly impossible to substantiate” and are likely to suggest “specific and far-reaching” environmental benefits that few, if any, of them have. The proposed changes also include new guidance on marketers’ use of product certifications and seals of approval, renewable energy claims, renewable materials claims and carbon offset claims.

The proposed changes were provided as part of a 200-plus page document, complete with an overview, background and details of both claims that are and are not addressed by the guidelines. The FTC also provided a well-done and convenient two-page PDF summarizing the proposed revisions.

FTC seeks public comments on the proposed changes until December 10, 2010, after which it will decide which changes to make final. Comments can be submitted in paper form by following the instructions in the “Request for Comment” section of the Federal Register notice, or electronically.

“In recent years, businesses have increasingly used green marketing to capture consumers’ attention and move Americans toward a more environmentally friendly future. But what companies think green claims mean and what consumers really understand are sometimes two different things,” said FTC Chairman Jon Leibowitz. “The proposed updates to the Green Guides will help businesses better align their product claims with consumer expectations” he added.

A Tad More of the Details

The proposed Green Guides caution marketers not to use unqualified certifications or seals of approval -- those that do not specify the basis for the certification through specific criteria. They emphasize that certifications/seals are endorsements covered by the commission’s Endorsement Guides and provide new examples illustrating how those guidelines apply to environmental claims (e.g., marketers should disclose material connections to the certifier). Third-party certification does not eliminate a marketer’s obligation to have substantiation for all conveyed claims.

Next, the proposed revised Green Guides advise marketers on the use of such terms as “degradable,” “compostable,” or “free of” a particular substance. For example, if a marketer claims that a product that is thrown in the trash is “degradable,” it should decompose in a “reasonably short period of time” -- no more than one year -- even in a landfill. The FTC is also proposing some changes to guidelines on claims of being ozone-friendly, recyclable and nontoxic claims.

When making claims about the use of renewable materials and renewable energy, FTC proposes that marketers provide specific information about the materials and energy used. Moreover, marketers should not make unqualified renewable energy claims if the power used to manufacture any part of the product was derived from fossil fuels.

The proposed revised Green Guides also provide new advice about carbon offset claims. The guidelines advise marketers to disclose if the emission reductions that are being offset by a consumer’s purchase will not occur within two years; and to avoid advertising an offset if the activity that produces the offset is already required by law.

Other Considerations

The proposed Green Guides do not address use of the terms “sustainable,” “natural” and “organic,” either because the FTC can’t provide meaningful guidance or to avoid duplicating rules or guidance of other agencies (e.g., USDA covers “organic”).

The new Green Guides generally advise companies that they will need “competent and reliable scientific evidence” to back up their claims.

While the final document itself will not be legally enforceable, the FTC can take action if it deems a particular company’s marketing as unfair or deceptive. Recent cases included three companies charged with making false claims that their products were biodegradable and clothing companies charged with deceptively labeling and advertising products as made of bamboo fiber using an environmentally friendly process.

The FTC is seeking comment on all aspects of its proposal, including:

  • What guidance, if any, should the commission provide concerning organic claims about non-agricultural products?
  • Do consumers interpret general environmental claims, when qualified by a particular attribute, to mean that the particular attribute provides the product with a net environmental benefit?
  • How should marketers qualify “made with renewable materials” claims, if at all, to avoid deception?
  • How do consumers understand “carbon offset” and “carbon neutral” claims? Is there any evidence of consumer confusion concerning the use of these claims?

So, What Should Green Marketers Do?

Is there a need to panic? Give up the brilliant sustainability communications plans you’re developing for 2011? Write off that large annual fee you paid your third-party eco-label(s) to use their logo?

No, no and no. Don’t get me wrong -- there will certainly be an impact and some work to be done. According to Datamonitor’s Product Launch Analytics, for example, 1,110 package-goods products have launched this year alone through September 30 with claims of being biodegradable, compostable, eco-friendly or environmentally friendly. Many, if not most, of these claims will need to be removed or modified, as well as those from prior years with the same or similar claims.

But, to update my advice from an earlier post anticipating FTC’s proposed revisions, here are some constructive ways to respond and continue to thrive in your sustainability communications efforts:

1. Participate and share your wisdom. The guidance issued is only a draft of the proposed revisions that are now subject to public comment, as mentioned above. Do comment on them, providing your wisdom, so that FTC’s concerns can be met without overburdening the process of educating consumers about the issues.

A strong argument can be made, for example, that continuing to educate the public on these matters should be balanced with credible, supportable language and claims. If the FTC’s new guides were overly burdensome, it could stifle the dialogue that business and consumers are now having around sustainability, something that’s not in the public interest.  There’s sure to be plenty of opportunity to add wisdom around how terms and approaches specific to your industry or business can be addressed as well.

Apparently, others are thinking along similar lines. According to Advertising Age, ad agencies have been cautioning the commission not to take any steps that would “stifle the ability or the interest of a company to make positive steps in improving the environment or that would restrict a company’s ability to market and communicate its activities in this area.”

2. Keep in mind the FTC’s simple premise, as stated by an official during this process, that marketers should (1) tell the truth and (2) be able to substantiate their claims. Many greenwashers, he says, have not followed these simple guidelines.

So, review the proposed revisions closely, and then be prepared to be as specific as possible when making claims regarding a product’s environmental impact. Make sure you can substantiate your claims with credible, reliable evidence around the environmental impact of your product. Your lawyer will then be your friend.

3. Work with your certifier. If you work with a respectable third-party certifier or seal now, that certifier should be participating in this process and starting to communicate with you about how any changes will affect the certification or your use of it. However, you should be proactive in this relationship, as you are ultimately responsible for any claims, third-party certified or not.

Start also looking at “safe” alternatives for having your brand or products recognized as more sustainable options, if you haven’t already. The federal government itself is actually responsible for many of the most popular environmentally-oriented certifications, including EPA’s Energy Star and other Partnership Programs that cover such topics as design, waste and water; and these are often low or no cost.  Other popular certifications have significant credibility and make no specific environmental claims beyond the certifier’s name (just specifications), such as LEED-certified buildings.

Then gather such thoughts and participate in the EPA’s process as it considers how to help further the success of “sustainable products.”

4. Act and lead, don’t just follow other marketers. Identify a sustainability problem that is relevant and material to your organization and/or its industry, and that is not adequately being addressed -- then, take ownership of finding a solution. One example of that is Starbuck’s search for a replacement of its disposable cups via a crowd-sourced campaign to develop ideas for the solution -- its “Beta Cup” campaign. Another is Timberland’s placement of an “ingredient label” on its shoe boxes identifying its products’ environmental impacts to educate and allow customers to make more informed decisions. These brands are leading on sustainability in a way that garners far more differentiation, credibility, buzz and good will than words or eco-labels ever could -- and they’re doing it without making any claims at all!  Read my recent leadership post for more on this.

 

Perry Goldschein is a founding partner in SDialogue, LLC, an award-winning sustainability communications & marketing firm that's helped such clients as Ben & Jerry's, Johnson & Johnson, Green Mountain Coffee Roasters, National Geographic and Yale University since 2003. The original version of this post appeared on the SDialogue blog and is used here with permission.

Image CC licensed by sxc.hu user jwmpap.