Client Alerts
October 03, 2012

The FTC updates its guidelines on what's "good for the environment"

Stites & Harbison, PLLC, Client Alert, October 3, 2012

by Stites & Harbison, PLLC

Claims of "environmentally friendly" goods and services are everywhere these days. But if you market your latest product as "biodegradable" or your business as "green," you need to make sure those descriptions comply with the Federal Trade Commission's newly updated guidelines.

After nearly five years of deliberations, the Federal Trade Commission has released its revised “Guides for the Use of Environmental Marketing Claims,” 16 CFR Part 260. The Green Guides, as they are popularly known, were first introduced in 1992 and updated in 1996 and 1998 to help marketers avoid making misleading or deceptive environmental claims. While they do not have the force of law and are not independently enforceable, the Commission can take action if the challenged claim is unfair and deceptive under Section 5 of the FTC Act, 15 U.S.C. § 45. The Commission has previously taken action against claims it found deceptive related to recyclability, biodegradability, and environmental certification, among other topics and terms. For example, the Commission sued a company for providing environmental certifications to any businesses willing to pay a fee without considering their products’ environmental attributes, and brought charges against three separate marketers for making false and unsubstantiated claims that their products were biodegradable.

A draft of the revised guidelines was published for public comment almost two years ago. Newly added sections cover carbon offsets, third-party certifications and seals of approval, “free-of,” “non-toxic,” made with renewable energy, and made with renewable materials claims. Modified sections cover claims regarding general environmental benefit, compostable, degradable, ozone, recyclable, and recycled content.

The Green Guides do not address the terms organic, sustainable, or natural. The Commission intentionally omitted these terms in order to avoid contradiction or duplication of rules from other agencies, such as the USDA (which governs “organic”) and the FDA (which governs “natural”).

The Green Guides apply to all marketers, regardless of the size of their businesses, and explicitly state that they “apply to claims about the environmental attributes of a product, package, or service in connection with the marketing . . . of such item or service to individuals. These guides also apply to business-to-business transactions.” 16 CFR § 260.1(c).

The Commission’s revisions to the Green Guides emphasize that environmental claims must be capable of substantiation. Use of broad, unqualified claims, such as “ecofriendly,” that imply far-reaching environmental benefits is discouraged. In short, marketers are cautioned to make sure their environmental claims comply with the Green Guides to avoid inadvertently violating the law.

Related Capabilities
Environmental, Energy & Sustainability