The much anticipated proposed, revised Green Guides were announced today (the FTC's news release can be found here). Why did the revisions take longer than expected? The need for evidence, according to Jim Kohm who gave a preview of the revisions at the NAD annual advertising conference earlier this week. Mr. Kohm explained that the FTC "kept the Guides the way they were unless we had evidence supporting a change." The evidence collected, through workshops and consumer perception studies, is reflected in the new Guides, and the FTC Staff during the comment period is particularly interested in gathering more. The new Guides include some updates to prior guidance, address some entirely new claims, and declined to provide guidance in other areas.
What's Revised?
- General Green Claims: The suggestion that general environmental claims be avoided has been strengthened considerably. The consumer research showed that half of consumers took away from a "green" or "environmentally friendly" claim a broad meaning of widespread environmental benefit. Any such claims should be qualified (e.g., Green = compostable). Marketers should look closely at the net impression conveyed by an ad or label, including the visuals and use of any seals or certificates to make sure the benefits are not overstated.
- Certificates and Seals: These are endorsements and as such any material connection to the certifying party must be disclosed. If the product is self-certified by the manufacturer, that must be clear. If a trade association is providing the certification and the marketer is a member of that association, this must be disclosed. If the name of the certifying party is general (e.g., Green Smart v. Biodegradable Association), the basis for the certification must clearly accompany the certification. (e.g. "certified for reduced chemical emissions during product usage.") The standards themselves used for the certification presumably do not have to accompany the seal. Thus, if a consumer or business wants to evaluate differences between products certified by competing certifying organizations or seals they will likely have to look for that information on the certifying organizations website. This provision is is not new but some of the guidance that was found in the examples in the old Guides was moved up.
- Biodegradable: For an unqualified claim, solid waste products must biodegrade in one year from disposal. Anything destined for a landfill, reclycling center, or incinerator cannot include this claim because in the FTC's view decomposition will not occur within one year. If such products will biodegrade in more than a year a qualified claim can be made that discloses the time in which the product is expected to biodegrade. The example given for a product where an unqualified biodegradable claim may be appropriate is a planter that is intended to be put into the ground. The Commission is seeking comments with respect to the standards for decomposition of liquid waste.
- Compostability: A product with such a claim must compost at the same rate as twigs, grass, and clippings, or be qualified.
- Recyclable: The Guides ask for comment on the percentage of recycling centers in the marketer's sales area that must recycle a given product befor (1) an unqualified recycling claim can be made; (2) a qualified claim can be made ("may" not be recyclable"); (3) and a further qualified claim should be made ("only in the few communities that have recycling programs." Staff has recommended 60% as the cut off for an unqualified claim. However, no additional guidance is provided to determine how convenient a recycling facility must be before consumers are deemed to have "access" to it. A "please recycle" reference is still seen as an affirmative recyclable claim.
- Ozone Safe: The revised Guides have taken out the dated reference to HCFC claims, but have kept guidance on "no CFC" claims.
- "Free Of": If a product removes one harmful ingredient but has another harmful ingredient that poses the same or similar environmental risk, a "free of" claim is not appropriate. If the product never included the referenced ingredient and no products in the category include the ingredient then a "free of" claim could be deceptive as it may imply that competing products include the offending ingredient. On the other hand the Commission noted that such information may be useful when comparing two different types of competing products, one type of which contains the harmful material and the other does not. The Commission is seeking comments on the appropriate treatment of such claims. The Staff did conclude that use of a "free of" claim is likely acceptable even if the product contains trace or de minimus amounts of the ingredient. However, trace amounts of highly toxic materials such as mercury would be material to consumers and cannot be labeled "free of."
What's New?
- Made with Renewable Materials: The Guides propose that marketers qualify the claim if the item is not made entirely of renewable materials and specify what the renewable material is, how it is sourced and why it is renewable. The Commission is seeking comments specifically on these proposed qualifications.
- Made with Renewable Energy: The Guides propose that unqualified claims are misleading if any part of the product was manufactured with energy derived from fossil fuels. Specific guidance is not proposed regarding parts sourced from third parties but the Commission cites to its Made in USA standards which often require manufacturers to account for parts sourced from third parties. The Commission asks for comments on whether the criteria for use of an unqualifed claim should extend to product distribution as well as manufacture. The Guides also propose that marketers specify the source of the renewable energy and that renewable energy claims may not be made where the manufacturer generates renewable energy but sells RECs for the renewable energy they generate.
- Carbon Offsets: The Commission opted to provide only limited advice in this area because of the limited extent of its authority and consumer perception evidence and ongoing debate among experts as to the appropriate standards for offset claims. However, the Guides propose that marketers use appropriate accounting methods to properly quantify their emission reductions and to insure that they are not selling their reductions more than once. Further, in the absence of a disclosure, it is assumed that the offset will occur in less than two years. Finally, while the Commission decided not to address the thorny issue of additionality, the revised Guides do propose that if the basis for the offset is already required by law, the offset should not be advertised.
What's Not Tackled?
- The Guides do not harmonize completely with international standards or adopt ASTM standards. Mr. Kohm explained that many of the standards have a purpose beyond deception, but the FTC is not an environmental policy setter.
- Sustainability
- Life Cycle Analysis
- Organic: The Guides do not address organic claims Mr. Kohm said the FTC did not want to get ahead of the USDA in this area.
- Natural: While a big disappointment to some, the Guides are silent on "natural" claims as the FTC did not conduct research in this area and had no evidence to provide guidance on such claims at this point.
- Amy Mudge and Randy Shaheen
