Client Alerts
November 24, 2010

"Green" marketing under FTC scrutiny

Stites & Harbison, PLLC, Client Alert, November 24, 2010

It has been more than ten years since the Federal Trade Commission (FTC) revised its guidance to American industry regarding what are appropriate claims of “eco-friendly” products. Since then, substantial marketing efforts by manufacturers to tag their products as “green,” “recyclable,” “degradable,” “renewable,” “free of ______,” “eco-friendly,” “certified,” “carbon neutral,” and other environmentally friendly claims have proliferated.

Whether or not such claims can be substantiated has drawn the attention of the FTC as it has recently published proposed revisions to its “Green Guides” to “deter” marketers from making misleading environmental claims. In its press release on October 6, 2010, announcing the newly proposed Green Guides, FTC Chairman Jon Liebowitz noted that “businesses have increasingly used 'green' marketing to capture consumers attention, …but what companies think green claims mean and what consumers really understand are sometimes two different things.”

The FTC found, through its own intensive consumer perception studies, that its Guides were in need of updating and tightening if there is to be market place credibility regarding environmental representations to consumers. It frowns on general “environmental friendly” claims, without more information to back up the advertising slogans.

Published on October 6, 2010, the revised and strengthened Guides admonish marketers about certain types of product representations including several new categories. Several of those categories and their context include:

Unqualified Certifications– The FTC found that “seals of approval” and similar general certifications often do not specify the basis for such certifications. The FTC advises that general environmental benefit claims should be clear and specific. General “eco-friendly” claims are prohibited since such claims are not specific and cannot be substantiated.

Buzz Words– Environmental protection related terms require details. Words such as “degradable,” “compostable” and “free of” must specify the basis and details related to the description.

“Renewables” defined – The use of the term “renewable,” such as “renewable energy” or “renewable materials,” are often misleading, and marketers may not make unqualified claims if, for example, any part of the product was made using fossil fuel-derived energy.

Carbon Offset Claims – Marketers must disclose if emission reductions that are being offset by a consumer’s purchase will not occur within two years. Offset claims may not be made if the producer is already required to offset by law.

The FTC is seeking comments to the proposed Green Guides by December 10, 2010.

Related Capabilities
Environmental, Energy & Sustainability