In October, I posted an update on the FTC’s revised Green Guides. The Guides are designed to help marketers ensure the claims they make about the environmental benefits of their products are truthful and not misleading. Since then, Practical Law Company asked me to write a more detailed article about the Guides and what companies need to do to comply. You can read the new article here.
Last month, the FTC issued a revised version of their Green Guides and a warning that they would closely scrutinize environmental claims. If you think the odds that the FTC will find your claims is low, you should remember that the FTC isn’t the only entity that can challenge you -- your competitors can, too. In fact, the NAD just reviewed green claims for cookware in a challenge brought by the advertiser’s competitor.
The NAD’s decision involved many of the claims the FTC addressed in its Guides. For example, the NAD took issue with the advertiser’s “eco-friendly” claims. Quoting the FTC, the NAD noted that unqualified environmental claims are likely to convey far-reaching environmental benefits that an advertiser cannot support. Accordingly, the NAD recommended that the advertiser stop claiming that its products are “eco-friendly.”
The FTC has also warned advertisers not to overstate environmental or savings benefits. In the NAD case, the advertiser claimed that the use of its cookware could reduce energy costs. Although the advertiser presented evidence that its products could reduce energy use, the NAD found no evidence that the reductions would result in meaningful savings on energy bills. Therefore, the NAD recommended that the advertiser stop making its savings claims.
As companies become more familiar with the Green Guides and scrutinize their competitors’ claims, it’s likely that these types of challenges will increase. Accordingly, you should make sure you review the Green Guides and scrutinize your own claims first.
Yesterday, the FTC issued a revised version of their Green Guides that is designed to help marketers ensure that claims about the environmental benefits of their products are truthful and not misleading. In revising the Guides, the FTC modified and clarified existing sections and provided new guidance on claims that were not common when the Guides were last reviewed.
The Green Guides address the following types of claims: (a) general environmental benefit claims; (b) carbon offset claims; (c) certifications and seals of approval; (d) “compostable” claims; (e) “degradable” claims; (f) “free-of” claims; (g) “non-toxic” claims; (h) “ozone-safe” and “ozone-friendly” claims; (i) “recyclable” and “recyclable content” claims; (j) “refillable” claims; (k) “renewable energy” claims; (l) “renewable materials” claims; and (m) source reduction claims.
The Green Guides aren’t new regulations, but they describe the types of environmental claims the FTC may or may not find deceptive under Section 5 of the FTC Act. The FTC has brought several actions in recent years related to green claims, and indicated that they would continue to bring these types of actions. Accordingly, advertisers should carefully review the new Guides and ensure that their green claims comply with the FTC’s standards.
For a more detailed analysis of the Green Guides, please reference the Kelley Drye client advisory, and see the FTC video below.
The U.S. Environmental Protection Agency (EPA) continues to emphasize enforcement against companies that market or sell products with unregistered claims of protection against disease-causing bacteria and other microbes. In a settlement announced September 28, 2011, EPA levied a fine of $261,000 against computer keyboard and mouse manufacturer, Logitech Inc., for making "unsubstantiated public health claims" about its products in violation of the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA).
Logitech incorporated into its products a widely-used silver-based additive manufactured by AgION Technologies Inc. that is registered with EPA as a product preservative. Products that incorporate such additives are allowed to claim protection against bacteria, mold and mildew that cause odors, staining, or deterioration of the product. Such products are not allowed to claim explicitly or to imply that the product offers protection to consumers against bacteria or other microbes.
In product labeling and marketing materials, Logitech had stated that the silver-based compound provided "protection to prevent the growth of a broad range of bacteria, mold and mildew" and "guards against growth of a broad range of bacteria." EPA policy contends that unqualified claims of antibacterial efficacy are potentially misleading to consumers if
Continue Reading...On January 20, 2011, the United States Department of Agriculture (“USDA”) issued a final rule regarding a voluntary product certification and labeling program for biobased products. The new rule creates a distinctive USDA product mark for qualifying products and sets forth the standards that these products must meet to bear the USDA’s symbol. According to the USDA, the labeling initiative is intended to “more clearly identify biobased products for all buyers, and to promote the increased sale and use of biobased products in the commercial market and for consumers.” The certification and labeling program will be administered in conjunction with the USDA’s BioPreferred Products procurement program, which affords products that meet the programs’ requirements preferred purchasing status by federal agencies.
Continue Reading...In October, we posted that the FTC had proposed revisions to the “Guides for the Use of Environmental Marketing Claims,” more commonly known as the “Green Guides.” Among other things, the FTC’s proposed revisions address carbon offset claims and environmental certifications. In recent weeks, there has been legal actions on both of these issues.
A consumer recently filed a class action lawsuit against Fiji Water Company, alleging that Fiji falsely claims its bottled water is “carbon negative.” In addition, Fiji advertised: “we will continue to offset 120% of our emissions. That means that we are not only mitigating our environmental impact but also making up for a little bit of someone else’s.” The plaintiff alleges that consumers understand Fiji’s claims to mean that Fiji’s current operations remove more carbon from the atmosphere than they release into it. According the complaint, though, this is not true. Instead, Fiji uses a “discredited” accounting method called “forward crediting.”
This week, FTC announced a settlement with Tested Green over the company’s environmental certification program. According to the FTC, Tested Green advertised and sold environmental certifications while claiming to be the “nation’s leading certification program with over 45,000 certifications in the United States.” The FTC alleged, however, that Tested Green never tested any of the companies it provided with environmental certifications, and would “certify” anyone willing pay a certification fee. The agency charged that the company violated the FTC Act by providing the means to deceive consumers.
There has been an increased focus on green claims in light of the FTC’s announcement last year. Companies should carefully examine their claims to ensure that they are aligned with the FTC’s guidance and that they do not overstate potential environmental benefits.
This week, the FTC issued its proposed revisions to the "Guides for the Use of Environmental Marketing Claims" (the "Green Guides") and announced that it will be accepting public comment on the Proposed Guides until December 10, 2010. The Green Guides, first issued in 1992 and last revised in 1998, are designed to help businesses ensure that the environmental marketing claims they make are true and substantiated. Although the Green Guides are not legislative rules (and thus not directly enforceable regulations), they are instructive on how the FTC views certain types of environmental marketing claims, and the evidence necessary to support such claims to prevent them from being considered deceptive or unsubstantiated.
The proposed revisions update the existing Guides with respect to claims such as "degradable," "compostable," and "recyclable," and they propose new guidance for claims not currently addressed by the existing Guides. Popular recent environmental claims that receive specific guidance for the first time include "renewable" and "carbon offsets."
The Commission declined to propose definitions or specific guidance for other environmentally-friendly terms such as "sustainable," "natural," "organic," "life cycle assessment," and "biobased." The FTC's rationale for not giving these terms specific treatment was based in large part on lack of consumer perception data, along with deference to sister agencies' existing standards and definitions for these terms.
Click here for a summary of the FTC's changes to the existing Green Guides and its proposed revisions.
With "green" products becoming more and more prevalent, marketers must ensure that their green marketing claims do not overstate the environmental benefits of their product or service, or they could face regulatory investigations or challenges from competitors. The Federal Trade Commission ("FTC") has established national standards for green marketing claims in the Guides for the Use of Environmental Marketing Claims, commonly called the Green Guides, which help reduce confusion among consumers and prevent false or misleading advertising claims.
The article, “Using ‘Green’ Marketing Claims? Make Them Clear,” discusses the Green Guides and provides helpful guidance for marketers. When it comes to promoting green products and their environmental benefits, the key is to make claims that are crystal clear.
The FTC is expected to issue revisions to the Green Guides any day, so marketers should also be on the lookout for updates that could affect the use of "biodegradable," "carbon neutral," and "recyclable" claims, carbon offsets, and third-party certifications.
It’s no surprise that in our current economic condition consumer spending is down. A company's budget, and especially marketing dollars, have to work more efficiently than ever before. While consumers may be watching their purse strings, “green” products are prevalent, and green marketing claims can be an effective way to break out of the clutter. Marketers must ensure, however, that those claims do not overstate the “green” benefits or they could face regulatory investigations or challenges from competitors, which cause further budgetary strain. 
From Paris to Peoria, companies should carefully consider the messages they could be communicating when touting environmental attributes of their products. Yesterday the International Chamber of Commerce ("ICC") announced its Framework for Responsible Environmental Marketing Communications -- guidelines for international marketers when making green marketing claims. The framework includes a checklist that marketers can use when making green claims and a chart with cross references to the Consolidated ICC Code of Advertising and Marketing Communications, which sets forth general principles governing all marketing communications. The ICC is the international association that coordinates and promotes self-regulation of advertising. Countries particpate through local chapters like the U.S. Council for International Business ("USCIB").
In the United States, the Federal Trade Commission has published Guides for the Use of Environmental Marketing Claims ("Green Guides") and is currently reviewing the Green Guides for possible modification. For more information, check out our recent article, Going Green Without Giving Up Your Greenbacks.
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