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.
