March 22, 2011

There is a growing trend for companies to seek out certification for being “green” and/or that its carbon reductions are genuine. As firms in an unregulated industry, some have chosen to provide an easy route to certification by selling a “certification” without actually checking the data or accomplishments. Companies have to beware such a certification. A recent egregious example is demonstrated by the settlement of a case brought by the Federal Trade Commission (FTC) against a firm called Tested Green.

The FTC claimed that between February 2009 and April 2010, Tested Green aggressively marketed a deceptive environmental certification program to prospective clients. The company claimed to be “the nation’s leading certification program,” and that it was endorsed by two organizations. The two endorsing organizations were actually owned and operated by the owner of Tested Green, yet it never disclosed this connection in its marketing materials.

The FTC also alleged that Tested Green did not actually test a customer’s products or services to determine whether a certification was deserved. Tested Green only asked for customers’ credit card information. Those who paid the required amounts received a link to the firm’s “customer verification page” as well as the firm’s logo, which they could use on their own websites and in marketing materials to indicate that their business was certified as “green.” None of the 129 companies that were “certified” had to provide any operational or environmental data to Tested Green to substantiate their green activity.

The FTC Consent Order required Testing Green to halt all certification-related activities, and imposed stringent record-keeping requirements. It is interesting that it did not require Tested Green to pay a fine, nor did it require that they reimburse any of the clients who paid for the false certifications.

In October 2010, the FTC issued draft revisions to its Green Guides involving seals of approvals and certifications (a summary of which can be found here). The entire list of proposed revisions can be seen here. The important points are that businesses must:

• Disclose any material connections to one’s certifier

• Use clear language explaining the basis for the certification

• Be able to substantiate their claims

In summary, in an unregulated market like this, if you are seeking green certification or certified carbon credits, research the certifier, be prepared to submit detailed data for scrutiny, and keep detailed backup records for your claims.

CCES can assist your company in finding the right certifying firm and in helping you address the technical issues necessary for the certification or to make necessary changes to qualify as a certified green company.