Green Product Claims Should be Specific, according to FTC's updated Green Guides
NAEM Staff
November 26, 2012
Q: What are the Green Guides and why do you think we are seeing an update now?
MD: The Green Guides were first adopted in 1992 to provide guidance to marketers with respect to their environmental marketing claims. The intent was to help them avoid making deceptive statements that could put them in a liability. They were revised in 1996, 1998 and again this year.
It was time for an update because the nature of the environmental marketing claims changed since 1990s. Today there is more of a focus on carbon emissions and the idea that products are non-toxic, or free of particular chemicals, such as Bisphenol A or formaldehyde. Plus, over the past 15 years the FTC has brought a number of enforcement cases. It selects its enforcement cases with the eye of setting a message and this update is a way for the FTC to send that message more broadly then just through the enforcement.
Q: Can you give me an example of a potentially deceptive claim?
MD: An example that the FTC sometimes uses is “contains no CFCs”. (CFCs are Chlorofluorocarbons.) That sounds like it is a good thing because Chlorofluorocarbons are the things that work on the ozone layer and consumers might be inclined to buy a product because it contains no CFCs. But they have been prohibited in all products for years. There is nothing special about a product that has no CFCs.
Q: What are some of the key changes?
MD: It really depends on the type of claims they make. One of the things the guidelines did was to carry over most of the guidance from the previous 1990s version. The FTC clarified that the Green Guides apply to business-to-business communications. There is a common perception that the Green Guides only apply to marketing directed at individual consumers, but there is a lot of marketing directed at other businesses.
There are also new sections on certifications and fields of approval. There is also new guidance on claims of renewable energy or renewable materials, or carbon offsets, as well as “free of” claims and non-toxic claims.
Q: What do the Green Guides say about “free of” claims?
MD: There is an interesting aspect in the “free of” claims that you can make a claim when a chemical is still present, but at a diminished amount. A good example is “formaldehyde-free”. Think of wood products that are sometimes glued together using urea formaldehyde resins. There is also formaldehyde given off from the wood itself because the wood naturally generates formaldehyde at low levels. The FTC says that you can make a “formaldehyde-free” claim if you are not using formaldehyde resins, even though there may be a small amount of formaldehyde being naturally given off by the wood.
Q: There are so many different kinds of certifications and seals of approval out there these days, what do the Green Guides say about those?
MD: Unqualified seals and certifications are regarded as general environmental benefit claims, which are almost impossible to substantiate and therefore are considered deceptive. That makes it important to qualify appropriately the certifications to limit them to particular environmental attributes.
Q: What is an ‘unqualified certification’?
MD: Let’s say that you get a certification that says you are ‘eco-friendly’, without any qualification that explains in what way you are eco-friendly. What that does is suggest there are no environmental drawbacks for your product and that is probably not going to be the case. If you have received an award for being eco-friendly, it is because of a particular attribute or combination of attributes. The FTC is saying it can be deceptive if you don’t limit that certification to the particular attributes for which you are receiving credit. So in other words, the FTC wants greater specificity for the particular attributes that the third party is recognizing your product.
Q: Does that inherently endorse certain certifications and discredit others because some certifications may be more general?
MD: Not automatically. It may be that some certifications are specific in the certification itself. If not, it is up the marketer to qualify that broad certification as saying we were awarded this eco-friendly certification because our product is made with renewable materials. So if the certification itself doesn’t narrow it down to the specific attributes, then the marketer may have to qualify that claim by identifying what the specific attributed are.
Q: Does the fact that these certifications often cost money have any impact on their credibility?
MD: The FTC says that the fact that you pay a fee for the services of an independent, third party to conclude the certification does not need to be disclosed because consumers expect that to happen. On the other hand, if there is an exchange of money and the third party doesn’t do any evaluation but just hand over a certification (which happened in a recent enforcement case) that is deceptive. However if the award is coming from a trade association of which you are a member, your membership has to be disclosed. The impression the consumer has is that the awarding agency is an independent third party; there is a material connection between the two it needs to be disclosed.
Q: What about claims a company makes based on its own research?
MD: In most cases, companies will develop their own substantiation for their own marketing claims and there will not be a third party. In that case FTC has concluded that claims such as biodegradable are deceptive if the product is unlikely to biodegrade in the real world because it is disposed of a manner which precludes that. So before companies make a product claim, they need to understand what the likely use of that product will be in the market and are responsible for making a claim based on that use.
Q: How widespread do you think this impact is going to be?
MD: I think it is going to be significant. This is nation-wide guidance. It is unlikely to be updated again for several years. The guidance had been proposed in 2012 and some companies responded to the proposal but others waited for the final. Now that the final is out there is no reason not to go ahead and review marketing claims in light of the green guides.
For more information on the FTC’s updated Green Guides, please visit: http://www.ftc.gov/opa/2012/10/greenguides.shtm.
Topics:
Compliance Excellence
Related
About the Author
NAEM Staff
The National Association for Environmental, Health and Safety, and Sustainability (EHS&S) Management (NAEM) empowers corporate leaders to advance environmental stewardship, create safe and healthy workplaces and promote global sustainability. As the
leading business community for EHS&S decision-makers, we provide engaging forums, a curated network, peer benchmarking, research insights and tools for solving today’s corporate EHS&S management challenges. Visit us online at naem.org.