The Federal Trade Commission (FTC) administers a broad range of consumer protection statutes, primarily by issuing “guidelines” for organizations to follow when they design products, packages and advertising materials. Generally these guidelines are not directly enforceable, but FTC uses them as the basis for deciding whether a particular activity is lawful. FTC provides organizations that conform to the guidelines with a “safe harbor” against prosecution for violation of one of its statutes, and focuses enforcement on businesses that fail to conform.
This month FTC issued substantial revisions to its “Green Guides.” They’re the first revisions since 1998, and they reshape FTC’s safe harbor for environmental claims in the advertising and marketing of consumer products. Any organization that makes such claims needs to review these revisions closely, to ensure that its packaging and marketing programs still meet FTC’s expectations. The Green Guides present general principles, and specific guidelines with examples of appropriate and inappropriate labeling and advertising.
General Principles
FTC expects marketers to identify all express and implied claims that the advertisement reasonably conveys, and to make only claims that are truthful, not misleading, and supported by a reasonable basis. These may include “competent and reliable scientific evidence”.
The Green Guides establish several general principles applicable to all environmental marketing claims:
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Qualifications and disclosures should be “clear, prominent, and understandable,” to prevent any deception.
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Benefits/attributes of product and package must be distinguished, e.g., for recyclability or recycled content.
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Environmental attributes must be clearly stated. An environmental marketing claim should not be presented in a manner that overstates the environmental attribute or benefit, whether expressly or by implication. For example, a package labeled “50 percent more recycled content than before” when the recycled content rose from 2 to 3 percent would likely be deceptive.
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Comparative claims should make clear the basis for comparison. For example, a claim that glass bathroom tiles have “20 percent more recycled material” is ambiguous. Consumers are unable to determine if the product contains more recycled material than it previously did, or more recycled material than the competition.
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Claims must be substantiated by “competent and reliable evidence.” When this evidence is “scientific,” it must be comprised of “tests, analyses, research, studies or other evidence based on the expertise of professionals in the relevant area, conducted and evaluated in an objective manner by persons qualified to do so, using procedures generally accepted in the profession to yield accurate and reliable results.”
Specific Guidance
The Green Guides also present specific guidance for specific types of claims. The latest revisions update earlier guidance, and add a variety of situations that were too rare to address in 1998. As of October 2012, specific guidance covers each of the following:
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General environmental benefit claims. It is deceptive to misrepresent a product or package as offering a general – i.e., unqualified – environmental benefit.
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Carbon Offsets (effective October 2012).
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Third-Party Certifications and Seals of Approval (effective October 2012).
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Compostable.
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Degradable.
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Free-of Specified Materials (effective October 2012).
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Non-toxic (effective October 2012).
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Ozone safe/ozone friendly.
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Recyclable.
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Recycled content.
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Refillable (effective October 2012).
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Produced Using Renewable Energy (effective October 2012).
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Contains Renewable Materials (effective October 2012).
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Source Reduction.
Most of the specific guidance identifies claims that are ambiguous and/or lend themselves to misinterpretation by consumers that would tend to overstate them. For example, a brand name like “Eco-Friendly” would be deceptive if it led consumers to believe that the product has environmental benefits that cannot be substantiated by the manufacturer. As another example, an unqualified claim of “recyclable” can only be made if recycling facilities are available to a “substantial majority” of consumers or communities where the item is sold (FTC opines at least 60 percent), and if the entire product or package (excluding minor incidental components) is recyclable. FTC considers use of the phrase “Please Recycle” to be an unqualified claim of recyclability.
Implementation Checklist
If your organization includes any environmental claims in its marketing and advertising materials, or on its packaging, you need to re-evaluate all these materials in light of FTC’s revised Green Guides. Although you’ll want to review the new Green Guides closely, the following checklist outlines the basics for such evaluations:
1. Does my organization sell any products for which it identifies or claims any environmentally-related attributes or compliance with environmental laws and regulations?
2. Do all materials meet the following General standards?:
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Are all environmental attributes clearly stated, prominent, and understandable?
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Are any claims unqualified?
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Are all qualifications of claims clear, prominent, and understandable?
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Are the benefits/attributes of the product and package clearly distinguished?
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Do all comparative claims provide clearly the basis for comparison?
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Are all claims substantiated by competent and reliable evidence?
3. Do all materials meet the following Specific standards, when applicable:
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Carbon Offsets
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Third-Party Certifications and Seals of Approval
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Compostable
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Degradable
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Free-of Specified Materials
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Non-toxic
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Ozone safe/ozone friendly
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Recyclable
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Recycled content
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Refillable
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Produced Using Renewable Energy
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Contains Renewable Materials
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Source Reduction
Where can I go for more information?
FTC posts the revised Green Guides, and supporting documentation on its website at www.ftc.gov/opa/2012/10/greenguides.shtm.
About the Author
Jon Elliott is President of Touchstone Environmental and has been a major contributor to STP’s product range for over 25 years. He was involved in developing 16 existing products, including Environmental Compliance: A Simplified National Guide, Securities Law: A Guide to the 1933 and 1934 Acts and Directors' and Officers' Liability.
Mr. Elliott has a diverse educational background. In addition to his Juris Doctor (University of California, Boalt Hall School of Law, 1981), he holds a Master of Public Policy (Goldman School of Public Policy [GSPP], UC Berkeley, 1980), and a Bachelor of Science in Mechanical Engineering (Princeton University, 1977).
Mr. Elliott is active in professional and community organizations. In addition, he is a past chairman of the Board of Directors of the GSPP Alumni Association, and past member of the Executive Committee of the State Bar of California's Environmental Law Section (including past chair of its Legislative Committee).
You may contact Mr. Elliott directly at: tei@ix.netcom.com.