Two years in the making, the Federal Trade Commission's updated Green Guides for marketers were finalized today. The draft updated guidelines were released in 2010. Since then the FTC has received numerous comments but made very few changes in the final guidelines. "The FTC was looking for evidence to back up comments--things like consumer surveys--and they didn't get it," says Chris Cole, a partner in the DC office of law firm Manatt, Phelps & Phillips.
The one change that companies making any sort of environmental claim should pay attention to, though, is the FTC's take on what it calls "general environmental benefits"--claims that a product is "eco friendly" or "green," for example. The FTC is requiring proof of any stated environmental benefit and it's tough to really prove that a product is "eco friendly." Moreover, the Commission is taking what it calls "environmental tradeoffs" into account as well. "If you said your product was eco-friendly, for example, and your proof of that is that your product is made with 50 percent recycled materials, you have to also prove that those materials aren't shipped in from halfway around the world or made via a toxic process," Cole explains.
"That little nuance could have a big impact on areas like green chemistry, where sometimes the replacement is as bad or worse than what you're replacing," Cole says. "Now you'll have to prove that it's better to make that claim."
The now-final guides will make it possible for the FTC to take action against those who make unfounded claims, from simple complaints to fines to lawsuits. The Commission has already been pursuing window makers claiming their windows deliver major energy savings. "They [the companies] actually said they deliver 'up to' 50 percent savings, but most consumers don't get anywhere near that and the FTC is saying qualifying something with 'up to' doesn't work because most consumers would still see that and assume they'll get the 50 percent savings," Cole says.
“Our purpose is to make sure consumers that want to buy green products are getting truthful information,” said James Kohn, the associate director of enforcement for the FTC’s bureau of consumer protection in a press conference. "There are two kinds of companies; those that live over the line and those that step over the line. The guides are written for companies that are trying to get it right."
The guides will also make it easier for companies to police themselves and each other. "More important than the FTC's enforcement actions, the Green Guides will be used by NAD, the advertising industry's self-regulatory body, to settle disputes between marketers about whether a claim to environmental benefit is false or misleading," say Annie Mullin and Dan Deeb of Schiff Hardin. "We believe there will be an increase in private party actions because marketers have more ammunition to bring actions against a competitor if the competitor is making a deceptive green claim."
