ENVIRONMENTAL MARKETING CLAIMS: FTC IS CHANGING THE RULES

Katea RavegaBy: Katea Ravega
Attorney, Quarles & Brady

On Oct. 7, the FTC proposed long-awaited revisions to the Green Guides -  the administrative regulations that govern environmental marketing claims. The Guides focus on what marketers can claim when advertising an incredible array of products and services, including green building materials, renewable materials, renewable energy, carbon offsets, recycling, biodegradable products, and compostable products, and general claims such as “green” or “eco-friendly.”

The FTC’s message is clear: it will be more aggressive in taking action against false or misleading environmental claims. In the past two years, for example, the FTC has taken action involving claims that products are biodegradable and that products are made with bamboo.

FTCThe proposed revisions reflect a significant amount of public and corporate input over the past three years. In addition to conducting a usual process seeking public comments, the FTC also held three separate workshops on specific types of claims and conducted a consumer perception study. While some aspects of the current Guides are retained – including evaluating the claims from the reasonable consumer’s perspective and the FTC’s general advertising principle that environmental marketing claims must be specific, substantiated, and not misleading or deceptive – there are numerous clarifications proposed. The agency’s main goal is to clarify the steps companies must take to substantiate and qualify their environment claims.

The proposed revisions include:

  • New limitations on general environmental claims – unqualified claims such as “environmentally friendly” face increased scrutiny, in part because of a recent FTC study which revealed that almost one-third of consumers interpret a general claim like “green” or “eco-friendly” to indicate a product had no negative environmental impact at all. In most cases, that would not be true – and even if it were true, it would be almost impossible for the company to substantiate.
  • Seals of approval and third-party endorsements cannot be marketed without qualifying statements that can be substantiated through competent and reliable scientific evaluation. If the seal or endorsement meets certain requirements, obtaining that endorsement itself could be substantiation for some claims.
  • Unqualified “recyclable” product claims can only be made if a “substantial majority” (about 60 percent) of consumers is able to recycle the material within their distribution area.
  • Marketing claims for “biodegradable” products will be assumed to mean that the items will break down within a one year time period under the conditions in which the product is normally disposed. Most often, this means disposal in a landfill.
  • Companies should not claim a product is made with “renewable energy” unless virtually all of its components were made with renewable energy and the company retains ownership of the Renewable Energy Credits associated with that renewable energy. Products made primarily with fossil fuels should be very careful about how any renewable energy use is described.

The Green Guides do not apply to just consumer-based advertising, but also to business-to-business advertising. With the proposed changes and increased enforcement activity, it is important for Arizona companies to make sure their green marketing is not only effective – but accurate and in compliance with the law as well. The FTC is accepting public comment on the proposed revisions through Dec. 10, 2010. Electronic comments should be submitted through the FTC portal.

Katea Ravega practices environmental law and is a LEED AP in the Phoenix office of the Quarles & Brady national law firm. She may be contacted at katea.ravega@quarles.com.

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