That would be speed. The much anticipated updates to the FTC Environmental Marketing Guides have been put on a longer track to allow the FTC Staff to undertake additional fact gathering about how consumers perceive the current generation's environmental claims like "sustainable," "renewable," and statements regarding a product's life cycle. In recent past speeches by FTC Staff, the proposed revisions were expected sometime this summer. We are not gambling folks when it comes to parting with greenbacks, but if we had to bet, we would not anticipate additional guidance until the end of the year and perhaps not till 2010.
At the terrific recent ABA Antitrust Section Consumer Protection Conference, Jim Kohm, the Director of Enforcement at the BCP and the coordinator of the Green Guides update, explained that "we hoped to get more consumer evidence from our workshops and requests for comments. This was not the case." Kohm expressed the staff's priorities in providing updated guidance on substantiation standards for current generation environmental marketing claims: "It is important to move quickly. It is more important to get it right." Kohm provided the standard disclaimer given when FTC commissioners or staff speak at such events that the comments he was making were not those of the Commission or any individual commissioner, also adding "they may not even be my own comments as of tomorrow!" Even making allowances for Kohm's dry wit, the course has been set for the FTC to conduct its own consumer perception research. The FTC first announced its intent to undertake its own research in October 2008 planning to hire a third party to conduct qualitative research with approximately 7,000 consumers. In an updated notice published in May, the FTC provided more detail including that it planned to study consumer's understanding of unqualified general environmental claims such as "green," and whether a consumer believes such general claims imply a product has specific environmental benefits. The study will also examine general claims coupled with a specific representation, such as "Green -- Made with renewable materials" to determine if consumers perceive such a claim implies environmental benefits beyond the specific attribute mentioned. Additionally the FTC plans to examine whether environmental claims suggest anything about the environmental impact through the life cycle of a product from its production and transportation through its use and disposal. Finally, the FTC will examine consumer's understanding of renewable energy and reduced carbon claims. The scope of the study has been reduced and now the FTC plans to sample 3,700 consumers using an Internet survey conducted by Harris Interactive, Inc. Undertaking such consumer research is not necessarily common at the FTC but not unprecedented. For example, the Commission tested consumer perceptions of "Made in USA" claims in connection with its drafting of the Made in USA Enforcement Policy Statement and guides for business.
What are businesses that want to tout the environmental benefits of their products to do while waiting for the Green Guides revisions? Kohm offered some advice: "Life cycle analysis claims are almost impossible to substantiate so stay away from them." He also pointed to the current Green Guides as still providing the FTC's views on what is necessarily to substantiate recyclable, recycled, and biodegradable claims and avoid "stepping over the line," and pointed to several recent settlements involving biodegradable claims as detailed here. He also said the Commission will continue to go after companies who "live over the line," making claims that, in his view, can never be substantiated, using as an example recent cases brought against companies making allegedly false gas and energy saving claims.
David Mallen from the National Advertising Division also spoke on the green panel. NAD sees a number of these cases, and Mallen thinks this is not a short term fad, explaining that "green marketing runs on guilt, and there is lots of potential for abuse." Environmental claims most common to NAD's docket are those involving general environmental claims, comparative claims, biodegradable and degradable and environmental certificates. Mallen warns advertisers against a common stumbling point where "many companies develop a product with a particular environmental benefit but attempt to parlay that into a broader claim." Because green marketing is "faith-based advertising" as consumers cannot readily verify the claims, "trust is critically important."
