Intellectual Property Articles

FTC Issues Revised "Green Guides"
by Cyrus Wadia

October 14, 2012

After a two-year comment process, the Federal Trade Commission has adopted revised Guides for the Use of Environmental Marketing Claims ("Green Guides") to assist marketers in avoiding making misleading environmental claims about their products. The revisions include general updates to the Green Guides as well as new sections on the use of carbon offsets, "green" certifications, as well as renewable energy and materials claims.
 
"Greenwashing" is 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. As discussed in my October 2010 article Federal Trade Commission Proposes Changes to Green Marketing Guides, the FTC had earlier proposed several changes to the Green Guides, including refinements to green environmental benefit claims, product certifications and seals of approval, degradable claims, compostable claims, ozone-safe/ozone friendly claims, recyclable claims, free-of/non-toxic claims, as well as new proposed rules regarding renewable materials, renewable energy and carbon offsets. A variation of all of these made it into the new Green Guides.
 
The Green Guides set out the FTC's "current views about environmental claims." It is clear that they "do not bind the FTC or the public," but also clear that the FTC can take action against marketers that make environmental claims inconsistent with the Green Guides. The Green Guides "apply to claims about the environmental attributes of a product, package, or service in connection with the marketing, offering for sale, or sale of such item or service to individuals" and include business-to-busines transactions. 
 
The Green Guides provide four general principles: (1) qualifications and disclsures should be "clear, prominent, and understandable," (2) marketing claims should be clear whether they refer to the product, the product's packaging, a service, or just to a portion of the product, package or service, (3) marketing claims "should not overstate, directly or by implication, an environmental attribute or benefit," and (4) comparative marketing claims should avoid consumer confusion about the comparison, and be substantiated."
 
The Green Guides also provide specific guidance regarding the following:
  • General Environmental Benefit Claims: considered deceptive under the Green Guides as they are "difficult to interpret and likely to convey a wide range of meanings." To avoid this, marketers should use "clear and prominent qualifying language that limits the claim to a specific benefit or benefits." But even that explanation and substantiation will not save an advertisement that otherwise implies deceptive claims.
  • Carbon Offsets: marketers should use "competent and reliable scientific and accounting methods to properly quantify claimed emission reductions and to ensure that they do not sell the same reduction more than once." Marketers cannot misrepresent that a carbon offset represents emission reductions that have already occurred or will occure in the near future, and cannot claim that a carbon offset is an emission reduction when that reduction or related activity was legally required.
  • Certifications and Seals of Approval: deceptive to misrepresent "green" endorsement or certification by independent third parties, as such may be endorsements with separate FTC requriements. Any third party certification also requires substantiation for all claims. Marketers should be careful of such claims because they convey a general environmental benefit (and are subject to the qualifications about such claims).
  • Compostable Claims: deceptive to misrepresent that a product or package is compostable. There must be competent and reliable scientific evidence of the compostability, and such claims should be clearly and prominently qualified (including whether composting facilities are not available).
  • Degradable Claims: deceptive to misrepresent that a product or package is "degradable, biodegradable, oxo-degradable, oxo-biodegradable, or photodegradable." Marketers should have competent and reliable scientific evidence regarding the degradability. Deceptive to make unqaulified degradable claims for items in the solid waste stream if the item will not completely decompose within one year after disposable. Degradable claims need to be qualified clearly and prominently.
  • Free-Of Claims: deceptive to misrepresent that a product, package, or service is free of, or does not contain or use, a substance. Such claims need to be prominently qualified, and even truthful claims may be deceptive if, for example, the product uses alternate substances that pose the same risk or the substance has not been associated with the product category.
  • Non-Toxic Claims: deceptive to misrepresent that a product, package, or service is non-toxic. Such claims need to be clearly and prominently qualified, and be supported by competent and reliable scientific evidence.
  • Ozone-Safe and Ozone-Friendly Claims: deceptive to misrepresent that a product, package, or service is safe for, or friendly to, the ozone layer or the atmosphere.
  • Recyclable Claims:  deceptive to represent that product or package is recyclable unless it meets specific requirements regarding removal from the waste stream, and availability of recycling programs and collection sites. Marketers must be careful to specify if any components of the product are or are not recyclable.
  • Recycled Content Claims: deceptive to misrepresent that a product or package is made of recycled content (which includes raw material, used, recondictioned, and re-manufactured components.
  • Refillable Claims: deceptive to misrepresent that a package is refillable unless marketer provides means for refilling package.
  • Renewable Materials Claims: deceptive to misrepresent that a product or package is made with renewable materials without qualification unless marketers have subustantiation for all express and reasonably implied claims.
  • Source Reduction Claims: deceptive to misrepresent that a product or package has been reduced or is lower in weight, volume, or toxicity, and any such claims should be clearly and prominently qualified.
The Green Guides signify the FTC's continuing interest in this subject area, and will certainly be the basis for upcoming enforcement actions. For further information, please contact Cyrus Wadia, head of Cooper, White & Cooper's Intellectual Property Group.

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