Green guides proposed by the Federal Trade Commission

Posted on October 13, 2010 by


USA’s Federal Trade Commission (FTC) has released its proposals to update the Guides for Use of Environmental Marketing Claims (Green Guides or Guides). Given the rising awareness about environmental issues among consumers, businesses have increased their focus on the way that they impact the environment. Businesses have also become active and aggressive in communicating these impacts and initiatives taken by them to reduce the impact on environment. With this background, the FTC has made the decision to revamp the Guides that businesses use to validate the claims they make to consumers. These rules have not been updated since 1998. As expected, the proposed version of the Green Guides will force businesses to be stricter with the claims that they make regarding the environmental impact of their products.

 

What are the Green Guides?

The FTC monitors marketing claims made to consumers to ensure that such claims are truthful and non-deceptive. Since consumers have begun demanding and favouring products that are deemed environmentally-friendly, the businesses have become more driven to market their products to get their position across. It is FTC’s job to ensure that claims by product manufacturer/marketers are accurate and substantiated. Through the Green Guides, the FTC also provided businesses and advertisers with general principles they should follow in advertising to consumers, ways that consumers may perceive or misperceive various marketing claims, and guidance to avoid making deceptive claims.

 

The older version of the Green Guides had 10 major focuses. These focuses included: general environmental benefit claims, certifications and seals of approval, compostable claims, degradable claims, “free of” and “non-toxic” claims, ozone-safe and ozone-friendly claims, recyclable claims, recycled content claims, refillable claims, and source reduction claims. The proposed Green Guides include the areas listed above and also cover marketing claims regarding carbon offsets, renewable energy claims, and renewable materials claims. There are some minor, non-substantive changes to the Guides to increase readability, but the major substantive changes are detailed below.

Of particular interest are the following additions to the Green Guides

 

Carbon Offsets

Carbon offsets are being included in the proposed Guide for the first time. The draft guideline requires that marketers “employ 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 one time.” Additionally, any carbon offsets that represent emission reductions that will not occur for two or more years must be prominently disclosed and no carbon offsets that represent reductions required by law may be claimed.

 

Renewable Energy Claims

The proposed Guides include a section directing marketers to avoid claims that their products are made “with renewable energy” if the product is made using fossil fuels. Additionally, the source(s) of the renewable energy are required to be disclosed. The marketers who create their goods with renewable energy, but then sell renewable energy certificates, may not claim that they use renewable energy where such a claim will deceive consumers, due to double counting.

 

Renewable Materials Claims

The proposed Guides include a section requiring marketers to avoid deceiving claims about “renewable materials” so that it is clear what the materials are, where they came from, and why they are considered renewable. Additionally, as with all other claims, any claim that a product is made with renewable materials should be qualified if it is not entirely produced with such materials.

 

As can be seen from the tone, the Green Guides focus on avoiding consumer deception. The onus is on marketers to substantiate and qualify claims to avoid deceiving consumers. The FTC is seeking public comments on the proposed changes until December 10, 2010, after which it will begin finalizing the Guides.

 

Reference

  1. Article by Arent Fox LLP at http://www.lexology.com/library/detail.aspx?g=d4fee28e-13aa-4549-8498-148bb49d7e1b&utm_source=Lexology+Daily+Newsfeed&utm_medium=HTML+email+-+Body+-+Federal+section&utm_campaign=Lexology+subscriber+daily+feed&utm_content=Lexology+Daily+Newsfeed+2010-10-13&utm_term=

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