October 15, 2010
Green, Intellectual Property Alerts

Federal Trade Commission Proposes Changes to Green Marketing Guides
by Cyrus Wadia

In my article "It's Not Easy Being 'Green'" from the Fall 2010 issue of the State Bar of California's New Matter magazine, I discussed the concept of "greenwashing," i.e., the act of making false or misleading statements to consumers regarding the environmentally-friendly nature of a product or service, or the environmentally-friendly practices of a company.  The article covered how greenwashing is more frequently becoming a basis for California false advertising complaints under the Business & Professions Code, federal false advertising claims under the Lanham Act, Federal Trade Commission (FTC) enforcement actions, and self-regulation by the National Advertising Division, and provides helpful hints to minimize the the prospect of a greenwashing claim. 
Earlier this month, the FTC proposed revised "Green Guides" to assist marketers in avoiding making misleading environmental claims.  The proposed changes were developed from a process that included public workshops, public comments, and a consumer study regarding understanding of environmental marketing.  The proposed changes to the Green Guides cover:
  • Green Environmental Benefit Claims:  Marketers should not make unqualified general environmental benefit claims.  Qualifications should be clear and prominent and limit the claim to a specific benefit.
  • Product certifications and seals of approval:  A new section will emphasize that certifications and seals are product endorsements covered by the FTC's Endorsement Guides, that marketers should use clear and prominent language limiting the claim to particular attributes that are substantiated, and that third-party certification does not necessarily eliminate a marketer's obligation to substantiate all claims.
  • Degradable Claims:  For solid waste products, proposal clarifies that the "reasonably short period of time" for complete decomposition of products is no more than one year after customary disposal and cautions that marketers should not make unqualified degradable claims.
  • Compostable Claims: To make an unqualified compostable claim means that a product or package will break down in approximately the same time as the materials with which it is composted.
  • Ozone-Safe/Ozone Friendly Claims:  The FTC made minor updates to the guides regarding ozone-depleting chemicals.
  • Recyclable Claims:  Proposal highlights a three-tiered analysis for disclosing the limited availability of recycling programs.
  • Free-of/Non-Toxic Claims: The proposal provides further guidance advising that even if true, claims that an item is "free-of" a substance may be deceptive in certain conditions and "non-toxic" claims convey that an item is non-toxic for both humans and the environment.
In addition, the FTC's proposes guidance for a few environmental marketing claims that are not currently addressed by the Green Guides:
  • Made with Renewable Materials:  Marketers should qualify claims with specific information about the renewable material and qualify renewable materials claims if the item is not made entirely with renewable materials.
  • Made with Renewable Energy:  Marketers should not make unqualified renewable energy claims if the power used was derived from fossil fuels and should qualify claims by specifying the source of renewable energies.  Marketers that generate renewable energy but sell renewable energy certificates for all of the renewable energy they generate, should not represent that they use renewable energy.
  • Carbon Offsets:  Marketers should have competent and reliable scientific evidence supporting their carbon offset claims and disclose if the offset purchase funds emission reduction will not occur for two years or longer.  They should not advertise a carbon offset if the activity is already required by law.
The FTC is accepting comments until December 10, 2010. Interested parties can submit comments electronically here.
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