FTC Announces Revisions to Green Guides

Following our earlier post on this issue, the Federal Trade Commission (FTC) last Monday issued the long-awaited revised "Guides for the Use of Environmental Marketing Claims" (a/k/a the "Green Guides"). The timing of the FTC's release of the revised Green Guides coincided with the National Advertising Division's 2012 Annual Conference, which was also held last Monday and Tuesday. The Green Guides are designed to help advertisers ensure that the claims they make about the environmental attributes of their products are truthful and non-deceptive. According to the FTC, the revisions to the Green Guides (which were first issued in 1992 and revised in 1996 and 1998) reflect a wide range of public input.

With respect to updates to the existing Green Guides, the revised Green Guides caution marketers not to make broad, unqualified claims that a product is "environmentally friendly" or "eco-friendly" because the FTC believes that such claims are likely to suggest that the product has specific and far-reaching environmental benefits (and may also convey that the product has no negative environmental impact) that few if any products actually have. The revised Green Guides also (i) advise marketers not to make unqualified degradable claims for solid waste products unless they can prove that the entire product or package will completely break down and return to nature within one year after customary disposal; (ii) caution that items destined for landfills, incinerators, or recycling facilities will not degrade within a year, so marketers should not make unqualified degradable claims for these items; and (iii) clarify guidance on compostable, ozone-safe/friendly, recyclable, recycled content, and source reduction claims.

The revised Green Guides also include new sections addressing (i) carbon offsets, (ii) certifications and seals of approval, (iii) free-of claims, (iv) non-toxic claims, (v) renewable energy claims, and (vi) renewable materials claims. These new sections are summarized briefly below:

•  Carbon Offsets: Given the complexities of carbon offsets, advertisers should employ competent and reliable scientific and accounting methods to properly quantify claimed emission reductions and to ensure that they do not sell the same reduction more than one time. The revised Green Guides go on to note that it is deceptive to misrepresent that a carbon offset represents emission reductions that have already occurred or will occur in the immediate future, and that marketers should clearly and prominently disclose if the carbon offset represents emission reductions that will not occur for two years or longer. Additionally, the revised Green Guides note that it is deceptive to claim that a carbon offset represents an emission reduction if the reduction, or the activity that caused the reduction, was required by law.

•  Certifications and Seals of Approval: Certifications and seals may be considered endorsements that are covered by the FTC's Endorsement Guides. In addition, the revised Green Guides caution advertisers not to use environmental certifications or seals that don't clearly convey the basis for the certification, because such seals or certifications are likely to convey general environmental benefits.

•  Free-of Claims: A truthful claim that a product, package, or service is free of, or does not contain or use, a substance may nevertheless be deceptive if: (i) the product, package, or service contains or uses substances that pose the same or similar environmental risks as the substance that is not present; or (ii) the substance has not been associated with the product category. Additionally, the FTC notes that, depending on the context, a free-of or does-not-contain claim is appropriate even for a product, package, or service that contains or uses a trace amount of a substance if: (1) the level of the specified substance is no more than that which would be found as an acknowledged trace contaminant or background level, (2) the substance's presence does not cause material harm that consumers typically associate with that substance, and (3) the substance has not been added intentionally to the product.

•  Non-toxic Claims: A non-toxic claim likely conveys that a product, package, or service is non-toxic both for humans and for the environment generally. Therefore, marketers making non-toxic claims should have competent and reliable scientific evidence that the product, package, or service is non-toxic for humans and for the environment or should clearly and prominently qualify their claims to avoid deception.

•  Renewable Energy Claims: Advertisers should not make unqualified renewable energy claims if fossil fuel, or electricity derived from fossil fuel, is used to manufacture any part of the advertised item or is used to power any part of the advertised service, unless the advertiser has matched such non-renewable energy use with renewable energy certificates. Additionally, the FTC notes that research suggests that consumers may interpret renewable energy claims differently than advertisers may intend, so that unless advertisers have substantiation for all their express and reasonably implied claims, they should appropriately qualify their renewable energy claims, e.g., by specifying the source of the renewable energy (wind or solar). According to the FTC, it is deceptive to make an unqualified "made with renewable energy" claim unless all, or virtually all, of the significant manufacturing processes involved in making the product or package are powered with renewable energy or non-renewable energy matched by renewable energy certificates. Finally, if an advertiser generates renewable electricity but sells renewable energy certificates for all of that electricity, it would, according to the FTC, be deceptive for the advertiser to represent that it uses renewable energy.

•  Renewable Materials Claims: The FTC notes that, as with renewable energy claims, research suggests that consumers may interpret renewable materials claims differently than advertisers may intend, so that unless advertisers have substantiation for all their express and reasonably implied claims, they should appropriately qualify their renewable materials claims, e.g., by identifying the material used and explaining why the material is renewable. Additionally, the FTC notes that advertisers should qualify any "made with renewable materials" claim unless the product or package (excluding minor, incidental components) is made entirely with renewable materials.

Given the increasing popularity of green advertising, advertisers that employ green claims should take this opportunity to review those claims in light of the revised Green Guides to ensure that their marketing campaigns remain compliant. The take-away: Be specific when making green claims, and make sure that you have substantiation to support those specific claims.

*Mr. MacDonald was formerly a lawyer with Olshan's IP Department.

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