FTC's New Green Marketing Rules Warn Against Sweeping Claims

FTC's New Green Marketing Rules Warn Against Sweeping Claims

Image CC licensed by Flickr user Vectorportal

When marketing their products, companies should avoid unqualified and general environmental benefit claims that are near impossible to prove, such as "eco-friendly." And if a product is made with renewable materials, companies need to identify the type of material, how it is sourced, and why it is renewable.

These are some of the proposed revisions to the Federal Trade Commission's Green Guides, a set of guidelines aimed at clearing up confusion in a marketplace that has changed dramatically since the last update in 1998. The FTC is seeking public comment on the updated guidelines for 60 days, before issuing a final version in the second half of next year.

"The Green Guides were designed to help businesses avoid making misleading environmental claims," FTC Chairman Jon Leibowitz said Wednesday during a conference call with reporters. "That, of course, helps consumers."

Leibowitz described an "explosion" of green claims being made for a variety of goods, ranging from paper towels to textiles, leaving consumers confused about what they're buying. "We're not always getting what we think we're getting," he said.

At the same, businesses are also unclear about the environmental attributes of their products. The FTC, for example, sent letters to some 80 companies this year warning they may be mislabeling some clothing and textile products as being made with bamboo, when in fact the items are made with rayon.  The FTC eventually charged four companies with the mislabeling. The agency also charged Kmart, Tender and Dyna-E with false biodegradable claims.

Since it began updating the guidelines, the FTC has held three public workshops, evaluated hundreds of public comments, and studied consumer perception of green claims. The agency was supposed to update the guidelines in 2009, but began the task a year earlier because a variety of new terms and products were increasingly entering the marketplace, such as carbon offsets, renewable materials, and renewable energy.

The FTC advises companies to qualify claims related to renewable materials if the product is not made entirely of renewable materials. It also advises against unqualified renewable energy claims if fossil fuel-based power is used to manufacture any part of the product.

Companies should also ensure they are correctly calculating emissions reductions when making claims related to carbon offsets. They should tell consumers if the emissions reductions won't take place for more than two years, and make sure the underlying activity is not already required by law. For example, if the government is requiring that trees are grown as part of a specific reforestation plan, companies cannot claim the environmental benefit of the growing of those trees.

If a company advertises an environmental certification or seal, the FTC recommends it also be very clear about the specific environmental attribute it can substantiate. The FTC also defined the term "degradable" to mean that materials will completely decompose within a year, while "compostable" claims mean a product will break down in the same time as the surrounding composting materials.

The FTC declined to offer guidance on the term "sustainable," and also avoided other terms already covered by other agencies, such as "organic," which is regulated by the U.S. Department of Agriculture.

Image CC licensed by Flickr user Vectorportal.