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FTC Issues Final Version of Green Guides

Revision Target Broad Claims, Force More Proof On Smaller Ones

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The Federal Trade Commission issued the long-expected final version of its Green Guides enforcement blueprint in a move aimed at eliminating fuzzy, unsubstantiated or misleading environmental claims.

Advertising-law attorneys saw few big changes from the proposed Green Guides issued two years ago, but said the revised version could require marketers to do more thorough analyses of broader environmental impact even when making very specific claims, while also discouraging claims about relatively small improvements.

James Kohm, associate director for the enforcement division of the FTC, presented details of the new Green Guides, which revise a 14-year-old FTC policy document, at today's National Advertising Division Conference in New York City. A summary can be found here.

He said the proposed revisions received 340 "unique comments" and more than 2,000 form comments, describing them as "cogent in criticism and not very useful" as advisement.

As with the proposed revision in 2010, the final Green Guides make no effort at addressing two of the most common words in green marketing -- "sustainable" and "natural."

On "sustainable," Mr. Kohm said there was "not enough information for cogent advice." Though the FTC most likely won't revisit the Green Guides for another 10 years, Mr. Kohm said, it may open discussion on individual claims like "sustainable" before then.

Natural didn't make the list of "dirty words" in the Green Guides because it has broader meaning outside of environmental marketing, according to Kevin Tuerff, cofounder of the Greenwashing Index, a project developed in partnership with the University of Oregon in which consumers can post and comment on ads making environmental claims. But Mr. Tuerff said in a statement he's "disappointed the FTC didn't tackle one of the hottest advertising buzzwords facing consumers today."

The Green Guides do, however, single out the words "green" and "eco-friendly" as overly broad and general unless qualified with specific claims.

One substantial change from the 2010 proposed Guides, however, is that even a specific, substantiated claim, like "we use less plastic than before," may not get marketers off the hook, said Chris Cole, attorney with Manatt Phelps & Philips in Washington.

If that "less plastic" claim still conveys the message that the product overall is better for the environment, which Mr. Cole said is likely, marketers need at least a partial life-cycle analysis to prove the change, including additional energy expended in transporting or manufacturing the new packaging, has a net positive impact on the environment.

"It's not a full life-cycle analysis," Mr. Cole said. "But you've got to analyze the trade-offs."

Unlike the original draft of the new Green Guides, marketers won't have to disclose if they've paid for an environmental assessment from an organization providing a certification seal or that the seal comes from a trade association, Mr. Cole said, provided the certification process is valid. But companies that use seals must still disclose any "material connection" with the certifying organization that could affect credibility of the endorsement.

Another key difference from the original proposal is that the FTC now says companies shouldn't make even specific environmental claims if the impact is "negligible," said Jeff Greenbaum, attorney with Frankfurt Kurnit Klein & Selz, New York.

"That sounds at first glance like that makes sense," Mr. Greenbaum said. "What's potentially concerning to companies is that you can't just look at one individual product, but the whole ecosystem. If I'm selling hundreds of thousands of these products annually, what's the total impact?"

The guidance could discourage companies from making incremental improvements if they can't make marketing claims about them, he said. "Provisions like this could really impede the development of environmentally friendly products."

Other key aspects of the guides include:

  • Marketers must qualify "recyclable" claims if relevant recycling facilities aren't available to at least 60% of the U.S. population;
  • Products shouldn't be billed as "made with renewable energy" unless "all or virtually all" significant manufacturing processes were powered with renewable energy or the company bought renewable energy certificates to match other energy use.

"The headline is really that the final guidelines are out and now we've got the guidance we need to move forward," said Mr. Greenbaum. "Companies have been in a holding pattern for years now [were] concerned about a lack of final guidance."

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Contributing: Jason Del Rey

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