Earth Day and the Federal Trade Commission's "Green Guides," by Nancy Lam

With Earth Day here (April 22) and imports with environmentally friendly claims on its packaging increasingly being scrutinized by US Customs, it seems only appropriate to review and understand how to use the Federal Trade Commission’s (FTC) revised Guides for the Use of Environmental Marketing Claims, otherwise known as the “Green Guides.” 

Special thanks to my law clerk, Nancy Lam, 2014 J.D. candidate at Pace Univ. School of Law, for contributing this article!

As one of our nation’s consumer protection agencies, the FTC is mandated to protect consumers from confusion and deceptive advertising claims. In today’s current marketplace, there is a growing trend among companies to produce greener products. The twenty-first century marks an era of environmental awareness, with people keen to use “environmentally friendly” items.

But, what does it mean when a product appears to be “greener” or “eco-friendly?”

    It turns out that companies cannot simply just advertise such broad and general claims without reliable and competent scientific backing. This is because of the negative implications from misrepresenting or deceiving consumers. In fact, there are specific rules that a company must comply with when using green marketing, which are interpreted in the Green Guides (16 CFR Part 260).

1) General Environmental Benefit Claims

Marketers are cautioned not to make unqualified general environmental benefit claims because broad claims are essentially difficult to substantiate. Marketers should qualify their claims by narrowing them with clear and qualifying language and explaining specifically why their claims are environmentally beneficial. They are refrained from highlighting insignificant benefits and are required to analyze trade-offs, in order to prove a qualified claim of overall environmental benefit from a specific attribute.  

I.e. Product claiming: “Green, made with recycled content,” but the environmental costs of using recycled content outweighs environmental benefits of using it- deceptive claim.

2) Carbon Offsets

Marketers must have competent and reliable scientific evidence to support their carbon offset claims and are warned not to sell emission reductions more than once. Marketers must disclose if consumers’ offset purchases pay for emission reductions that will not occur for at least 2 years. Lastly, marketers are not to make a carbon offsets claim if they are already required by law to do so.

3) Certifications and Seals of Approval

Marketers are to use the FTC’s Endorsement Guides, if a product or service is certified by an endorsement of a third party. They must disclose a “material connection” that may affect the credibility of endorsement. Payment of a certification fee on its own is not a material connection. Marketers must refrain from using certification and seals that do not clearly convey the basis for its certification, and must use clear and prominent language. Keep in mind that even with a third party certification, the marketers still are required to substantiate all expressed and implied claims.

A third party certifier who administers the industry trade certification program, is not a material connection that affects credibility of endorsement, if they objectively apply a voluntary consensus standard.

4) Compostable

Marketers must have competent and reliable scientific evidence to prove that all materials in the product or package will break down into or become a part of usable compost in a safe and timely manner. “Timely manner” means “approximately same time as the materials with which it is composted.” Marketers are required to qualify if their product cannot be composted at home in a safe or timely manner, or qualify if a product can be composted in a large-scale facility, but facilities are not available to a majority of consumers. 

I.e. unbleached compostable coffee filter that can composts in a pile at home is proper.

5) Degradable

Marketers may make unqualified claims only if they can substantiate with competent and reliable scientific evidence that the “entire product or package will completely break down and return to nature, within a reasonably short period of time after customary disposal.” (Within one year). They cannot make unqualified claims for items destined for landfills, incinerators, or recycling facilities because they will not degrade within a year.

I.e. degradable garbage bag that can completely break down in soil with presence of water and oxygen, but customarily, these bags are sold to people who place them directly into water stream, which eventually terminates in incinerator, is deceptive.

6) Free-Of Claims

Some products/services claim to be free of, or do not contain certain substances. These claims are deceptive, and therefore cannot be made if:

1. The product has other characteristics that pose the same environmental risk as the absent substance; or

2. The absent substance was not even associated with the product to begin with.

Marketers can make free-of claims even if there are trace amounts of the substance, only if:

1) The level is no more than would be found as consumer expected;

2) The substance’s presence does not cause material harm that consumers associate with that substance; and

3) Substance was not added to product intentionally. 

7) Non-Toxic Claims

These claims also require competent and reliable scientific evidence that the product is safe for both people and environment.

I.e. if cleaning product claims to be “essentially non-toxic,” and poses no risks to humans, but is toxic to environment, it is deceptive.

8) Ozone-Safe and Ozone-Friendly Claims

It is deceptive to misrepresent that a product is safe for or friendly to the ozone layer or atmosphere.

I.e. an aerosol air freshener is labeled “ozone friendly,” but contains ingredients that contribute to depletion of ozone layer; its general claim of being safe for the atmosphere is deceptive.

9) Recyclable

Marketers must qualify recycling claims if recycling facilities are not available to a “substantial majority” of consumers, which means at least 60% of the consumers/community where product is sold. Marketers must emphasize if there is low accessibility or availability to recycling facilities.

          I.e. if under 60%, indicate that: “This product may not be recyclable in your area.”

10) Recycled Content

Marketers can only make claims for materials recovered or diverted from waste stream (whether pre-or post-consumer). They must qualify claims for products or packages only partially made from recycled materials.

          I.e. Paper plates made from 30% recycled material.

11) Refillable Claims

Marketers cannot make unqualified claims unless they provide a way to refill the package.

I.e. small fabric softener that says “Now in a handy refillable bottle!” whose manufacturer also sells it in a large sized bottle, is not deceptive because consumers can reasonably obtain the large sized bottle to refill.  However, an ink container marked “refillable 3 times,” but where manufacturer does not provide collection program is an unqualified deceptive claim.

  

12) Renewable Energy Claims

Marketers are refrained from making unqualified renewable energy claims based on energy derived from fossil fuels, unless they purchase renewable energy certificates (RECs) to match their energy use. Marketers are encouraged to specify the renewable energy source (i.e. wind or solar), in order to minimize misunderstanding. They must refrain from making unqualified claims, unless virtually all of the significant manufacturing process was powered with renewable energy or non-renewable energy matched with RECs. Marketers using the term “hosting” is deceptive, if they sold all renewable attributes of that power.

I.e. clothing line markets itself: “made with wind power,” but it buys 50% of the wind energy, thus it is deceptive because consumers will likely convey their claim to be that clothing is entirely made of renewable energy. “We purchase wind energy for half of our facilities” is appropriate.

13) Renewable Material Claims

 Unless the product is 100% made with renewable material, or has minor and incidental components that are not renewable, or marketers have substantiation for all of their express and reasonably implied claims, they should clearly and prominently qualify their claims. Marketers must specify materials used and why it is renewable.

14) Source Reduction

Marketers must qualify their claim that a product/package is lower in weight, volume or toxicity in a clear and prominent manner.

i.e. “Product generates 10% less waste than our previous product,” as opposed to “Product generates 10% less waste.”

Oddly enough, the Green Guides do not address organic, sustainable, and natural claims. The Federal Register’s Revised Green Guides Adoption Notice, 77 FR 62124, explains that with regard to organic claims, the FTC wants to prevent duplication of regulatory framework from the USDA’s National Organic Program (NOP). With regard to sustainable and natural claims, the FTC claims to lack sufficient evidence to provide the public with general guidance regarding these types of claims.

To learn more about the FTC’s Green Guides watch the video on the Bureau of Consumer Protection Business Association website.

 

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