Updated FTC Green Guides Make it Less Easy to be "Green"
Green may be beautiful to a companys marketing department, but according to the Federal Trade Commissions new Green Guides, its not a word to be used lightly.
Earlier this week, the agency that monitors unfair and deceptive advertising practices released updated guidance on marketers use of environmental claims. First issued in 1992, and most recently updated in 1998, the revised guides incorporate three new categoriesrenewable materials, renewable energy, and carbon offsetswhile also providing clarification on existing categories, such as ozone-safe, recyclable, non-toxic, and general environmental benefits.
The FTCs bottom line: Dont make claims you cant substantiate, says Kathleen Carpenter, a partner at McKenna Long & Aldridge in San Francisco, who specializes in green-building risk management. It seems like common sense, but theres been a lot of use of the word green.
The new guidancewhich stems from revisions that were proposed in 2010takes a stern view of how marketers employ general environmental benefits claims like eco-friendly and greener, which consumers could interpret broadly. (Though its worth noting that the guidance doesnt address the terms sustainable, natural, or organic.)
Unqualified general environmental benefit claims are difficult to interpret and likely convey a wide range of meanings, the guidance states. Because it is highly unlikely that marketers can substantiate all reasonable interpretations of these claims, marketers should not make unqualified general environmental benefit claims.
Seyfarth Shaw associate Ilana Morady is a member of the firms environmental safety and toxic torts practice group in Chicago. She says, What really matters to the agency is how consumers perceive a marketers claim. So, she adds, any claim you make about environmental attributes has to be true, and it has to be qualified and substantiated.
Take, for example, an illustration from the Green Guides, in which a manufacturer makes an unqualified claim about a package being compostable. According to the guidance:
Although municipal or institutional composting facilities exist where the product is sold, the package will not break down into usable compost in a home compost pile or device. To avoid deception, the manufacturer should clearly and prominently disclose that the package is not suitable for home composting.
The first step for in-house counsel is taking stock of the companys advertising. Take a look at all the claims that your company is making that could be construed as environmental claims, and evaluate them against the Green Guides, says Morady, whose firm has conducted mini-audits of clients promotional websites and marketing materials.
Carpenter also suggests an alternative to using broad terms like green in advertisements: Talk about the attributes of the product, and let them speak for themselves.
For all the talk about green, Carpenter says that the level of substantiation required to back up a claim still presents a little bit of a gray area in the guidance. Nevertheless, she says in-house counsel can and should keep a record of the information upon which a marketing claim is based.
The most important advice would be to make sure this is done on a regular basis and in advance, says Carpenter. That way, if the companys marketing claims are ever scrutinized, you can more easily demonstrate you had those practices in place at the time you were making those marketing claims.