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Oct 2012
17
October 17, 2012

FTC Releases New Green Guides

 

The Federal Trade Commission recently released its much-anticipated revised “Green Guides” providing marketers with new direction in making and substantiating claims that products are environmentally friendly.  If used effectively, the Green Guides allow companies to make a “green” claim in a way that communicates to consumers that products are environmentally friendly without deceiving them as to the environmental impact of the product.

James Kohm, the Associate Director of Enforcement for the FTC’s Bureau of Consumer Protection, explained that in creating the Green Guides the FTC attempted to remain true to certain guiding principles, specifically that the FTC:
 
  • Is neither a proponent nor an opponent of green claims, but was only looking to provide guidance that remain true to Section 5 of the FTC Act, which empowers the FTC to prevent deceptive trade practices.
  • Attempted to harmonize the Green Guides with international standards, although often with limited success.
  • Believes that green disclosures must be made at the point of sale.
Summary of Revisions to the Green Guides

Following is a list of the most notable changes in the new Green Guides:
 
  • No more unqualified claims of general environmental benefits:  The Green Guides warn marketers from using general environmental claims such as “green” or “eco-friendly.”  Instead the FTC urges marketers to qualify such general benefit claims with specific qualifiers such as “recyclable” or “biodegradable.”
  • Carbon offsets must occur within two years:  Marketers must employ competent scientific and accounting methods to properly quantify claimed emission reductions and to ensure that the claimed reduction is not sold more than one time.  Additionally, marketers must disclaim the carbon-offset claim if the emission reduction will not occur for more than two years.
  • Certifications and seals of approval bring up issues of material connections:  Since certifications or seals of approval may amount to an official endorsement, a company must disclose if it has a material connection to the organization providing the certification or seal.  Based on the FTC’s view that general environmental claims are nearly impossible to substantiate, all certifications and seals should convey the specific basis for the claim, along with proper qualifiers.
  • Compostable means that a product can be composted in a home compost pile:  A marketer claiming that its product is compostable should clearly qualify that claim if the product cannot be composted safely or in a timely manner in a home compost pile or device.  If the marketer claims that a product is compostable in a composting facility, the marketer must qualify the compostable claim if such composting facilities are not available to a substantial majority of consumers where the product is sold.
  • “Degradable” means one year or less:  The Green Guides provide that it is deceptive to make an unqualified degradable claim if the product will not completely decompose within one year after customary disposal.  Furthermore, the FTC has adopted the view that it is deceptive to make an unqualified degradable claim for products that are customarily headed for a landfill, incinerator or recycling facility, as these locations do not present conditions in which complete decomposition will occur within one year.
  • Guidance for making “free-of” claims:  Marketers may continue to make “free-of” claims provided that: (1) the product contains not more than a trace amount (2) the trace amount does not cause the negative effect associated with large amounts of the substance; (3) the trace amount is not intentionally added; and (4) the free -of substance is not replaced with a different substance that causes the same harm.  Furthermore, marketers may not make a free-of claim in regard to a substance that has never been associated with the product category.
  • Non-toxic claims imply a product is non-toxic to humans and the environment:  A marketer making a non-toxic claim must have competent and reliable evidence that the product, package or service is non-toxic for humans and for the environment.  If this is not the case, the claim must be clearly and prominently qualified.
  • Recyclable claims are viewed under a tiered analysis:  The FTC has formally adopted a tiered analysis of recyclability.  Whether and how a recyclable claim should be qualified depends on whether a “substantial majority,” which is defined as 60% of consumers, or a “less than substantial majority” of consumers have access to a recycling facility that is capable of recycling the specific product.  If less than a substantial majority of consumers have access to an appropriate recycling facility, then a general recyclable claim should be qualified.
  • Renewable energy claims should be clear as to source and amount:  Renewable energy claims should be clear as to the source of the renewable energy used in the manufacturing process.  Additionally a renewable energy claim should be clearly qualified if not all or virtually all of the manufacturing processes involved in making the product are powered by renewable energy.  Marketers should be mindful of whether their claim implies a local effect.  Finally, if a marketer generates renewable energy credits, but sells those credits to others, the marketer may not claim that the product was made using renewable energy.

If you have questions regarding whether your green marketing complies with the new FTC Green Guides, or whether your claims are sufficiently substantiated, please contact Warner Norcross & Judd’s Advertising and Marketing Law group: Janet Ramsey (jramsey@wnj.com or 616.752.2736); Amanda Fielder (afielder@wnj.com or 616.752.2404); or Ken Coleman (kcoleman@wnj.com or 616.752.2708).

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