Alert November 28, 2012

Top Ten Considerations for Environmental Marketing Under the FTC’s Revised Green Guides

Nearly five years after the Federal Trade Commission ("FTC") commenced a series of workshops in order to update its environmental marketing guidelines or "Green Guides," on October 1, 2012, the FTC issued the final version of the updated guidelines. As with other FTC guidelines, the revised Green Guides do not have the force of law. Nonetheless, they are extremely important because they represent the FTC’s view of how Section 5 of the FTC Act should be interpreted when applied to environmental advertising claims. The FTC has provided several resources on its website to assist advertisers in understanding the new guides, which are available here.

Although many aspects of the revised Green Guides are fairly detailed and include numerous examples, the following is a "top ten" list of considerations for understanding and applying the revised Green Guides:

  1. Avoid making broad, unqualified general claims that a product or service results in environmental benefits. This includes popular vernacular such as unqualified claims of "green," "environmentally friendly," or "eco-friendly." Unless such terms are qualified with specifics, the FTC believes that such broad claims are difficult, if not impossible, to substantiate.
  2. Qualifications of general claims with specific claims of environmental benefits must be clear, prominent and specific. In addition, the claimed specific benefits must be significant, and must take into account the trade-offs that have resulted from the claimed attribute. For example, if the attribute results in environmental detriments elsewhere in the product lifecycle, the claimed attribute may result in no net environmental benefit.
  3. Claims to carbon offsets must be supported by competent and reliable scientific evidence. The advertiser must use accurate methods to ensure that its measurements are correct, that it has not double-counted a claimed offset and that it has not touted an offset already required by law.
  4. Third party certifications or seals of approval may be used and advertised, but are subject to special considerations. First, if there are material connections between the advertiser and the certifying organization, disclosure may be required under the FTC’s endorsement guides. Second, marketers should not use certifications or seals that suggest general environmental benefits, without at least disclosing the specific environmental benefits of the claimed product or service that forms the basis for the certification or seal.
  5. General principles of substantiation still apply. It is a cardinal principle of advertising that there must be a substantiated and reasonable basis for a claim, and that the FTC will evaluate the accuracy of the claim from the standpoint of a reasonable consumer. This principle applies as well to environmental claims, which is notable because the substantiation required for an environmental claim may be complex, and the understanding of a reasonable consumer difficult to evaluate. The substantiation for an environmental claim typically requires tests, analyses, research or studies that have been conducted in an objective manner by qualified persons. In addition, an advertiser touting a third-party certification must still be able to substantiate the bases for all express and implied claims, and may not simply rely upon the third-party certification.
  6. Special qualifications apply to claims that a product is compostable, degradable, recyclable, refillable or made with recycled content or renewable materials. Among other things, an advertiser must ensure that a product claimed as compostable meets the requirements set forth in the revised Green Guides (which generally address how quickly a product is composted and whether special treatment is necessary). A product claimed as degradable must completely break down and return to nature within a reasonably short period of time. Claims to recyclability must be qualified if recycling facilities are not available to at least 60% of consumers where a product is sold.
  7. Considerations of a product’s lifecycle appear throughout the revised Green Guides. The FTC has clearly recognized that environmental trade-offs are often implicated by employing a certain attribute for a product or service. The revised Green Guides take the view that claims to an environmental benefit should not be made without qualification where the use of the attribute being advertised has resulted in some other significant environmental detriment, even if it occurs at some other point in the product lifecycle.
  8. Special rules apply to "free-of" or "non-toxic" claims. The revised Green Guides provide that a product advertised to be "free-of" a particular substance must contain no more than trace amounts of the substance, and must not include another substance that poses the same environmental risk. Claims to non-toxicity must be backed by competent and reliable scientific evidence that the product is safe for both people and the environment.
  9. The revised Green Guides do not specifically address the use of the terms "sustainable," "natural" or "organic," but that does not mean the use of such terms is unregulated. The FTC refrained from specific guidance regarding these terms because it believes it lacks a sufficient basis to provide meaningful guidance, or because other regulatory regimes cover these terms within specific contexts. Nonetheless, the FTC will likely take the view that the advertiser bears the burden to substantiate a claim of sustainability, which would require an understanding of how that claim is understood by a reasonable consumer. And although the revised Green Guides do not specifically address terms such as "natural" and "organic," the FTC has warned that "[m]arketers that are using terms such as natural must ensure that they can substantiate whatever claims they are conveying to reasonable consumers."
  10. The FTC will not be the only audience to evaluate the accuracy of environmental claims. Numerous private watchdog organizations, state attorneys general offices, the class action plaintiffs' bar, competitors, and many interested consumers monitor such claims for their accuracy. Regardless whether the claims result in a challenge from the FTC, a public controversy over the accuracy of an advertiser’s claim may alienate the very consumers the advertiser most hopes to influence.