October 2012

The Federal Trade Commission issued the final version of its Guides for the Use of Environmental Marketing Claims (http://www.ftc.gov/bcp/grnrule/guides980427.htm) (http://business.ftc.gov/advertising-and-marketing/environmental-marketing) on October 1, 2012 after a 4 year effort. The FTC website has over a dozen different documents summarizing and discussing the impacts of “Green Guides” on business. This document was designed to protect consumers and give marketers the proper guidelines necessary to ensure that claims made about the environmental attributes of products are truthful and do not cause consumer deception. Although called “Guides”, they will have the force of law for those who sharply violate them.
The final version addresses issues that did not even exist when the Green Guides were last issued (1998), such as seals of approval, carbon offsets, and “free-of” and made with renewable energy and materials claims. Ironically, the new Green Guides do not define terms such as “green”, “sustainable,” and “natural.” The Green Guides go into effect immediately.

Some highlights of the Green Guides:

• Companies should only make environmental benefit statements that can be backed up with tested data. Broad claims, like “green” or “eco-friendly”, are discouraged because they are impossible to substantiate;

• Companies that provide claims of environmental benefits must ensure that such claims are clear to the (nonprofessional) public and specific;

• Companies should use approved accounting methods to substantiate that any carbon offsets bought or sold are based on actual measured GHG emission reductions and ensure that the offsets derived from a voluntary reduction, not one required by law;

• Companies that list an environmental certification or seal must clearly reveal its specific basis, not that it is given to a product for general environmental benefit. Companies must also disclose any relationship with the certifying organization;

• Companies claiming a product is “compostable” need scientific proof that all product materials – including packaging – will break down into compost. A claim that a product is “degradable” can only be made if there is scientific data that the entire product and package will completely break down and return to nature within one year of typical disposal (in other words, not for a product whose waste is normally destined for a landfill or incinerator);

• Companies claiming a product to be “recyclable” in areas where recycling of those types of products is unavailable must disclose this limitation if recycling facilities are unavailable to at least 60% of the consumers where the product is sold;

• Companies that claim that a product is “non-toxic” need to have available, reliable scientific data that the product is safe for both people and the environment;

• Companies can make a claim that a product is “free of” a certain compound only if that substance is not associated with that product type. A company can claim that the product is “free of” the compound even if it contains some amount of it only if:

o the product does not have more than trace amounts or background levels of the substance in question and is not intentionally added to the product,

o the trace amount of substance present does not cause the harm that may be expected of the substance, and

o the substance has not been replaced with another one that poses a similar or greater level of risk.

In short, the FTC is cautioning companies not to make broad, unqualified claims, particularly of a concept that does not have a specific definition, such as “eco-friendly” or “green”. Studies indicate that such claims do cause consumers to believe that the product truly has significant environmental benefits, which may not be true. Instead, more specific claims should be made, and then only if backed up by scientific data.

Although the Green Guides are not federal regulations, they do set the guidelines for the types of environmental claims that the FTC may find to be deceptive under Section 5 of the FTC Act, which can be the basis of enforcement action by the FTC of deceiving the public in advertisement.

The initial reaction to the issuance of the Green Guides by industry, consumer, and environmental groups appears to be positive. At least there is less confusion as actual guidelines exist that companies and marketers can use when promoting green products. You as an EHS or sustainability professional may be brought in to help your Marketing Group decide on what claims for your products may be made. Your scientific knowledge should help square claims away with the guidelines in the Green Guides.

The one area of confusion that has come out since the issuance of the Green Guides earlier this month is what constitutes a qualified scientific claim and what is an unqualified claim. What level of scientific evidence is sufficient to make a claim? Must it be a study published in a major, refereed, professional scientific journal? Could one in a less rigorous journal (consumer magazine) be acceptable as qualified? Or could an internal, unpublished study made available to anybody who inquires be acceptable? The FTC may need to clarify what it means by qualified scientific study.

CCES has the experts and experience to assist you in developing a dependable “green” and sustainability program and to assess potential green and environmental claims for your products. We can design and manage such a program to maximize your cost benefits and to coordinate with your Marketing and Product Development groups to properly highlight your environmental benefits. Contact us for more information.