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Now more than ever, consumers consider the environmental consequences of their purchases. But what makes a product “green”? Recent revisions to the Federal Trade Commission’s “Green Guides” include a number of modifications addressing environmental marketing claims that businesses must understand in order to stay competitive in an increasingly environmentally conscious marketplace.

The FTC Green Guides

One trip down a grocery aisle or one commercial break during the ballgame makes it clear: to succeed in today’s marketplace, a business must market the environmental benefits of its products. Whether a product is truly “green” is relative to the circumstances. All products use energy and resources, and all products create waste. How then can a business market the environmental benefits of its products without overstating the true impact?

The FTC has intervened to clarify what may be said about a product’s environmental impact. The FTC recently revised its Green Guides, adopting a more holistic approach to review environmental marketing claims. The Guides are not agency rules or regulations, but rather help the agency in determining whether environmental claims are misleading and deceptive. If claims are determined to be misleading and deceptive, the agency can take enforcement action, which can lead to fines or FTC orders that prohibit deceptive advertising.  The Guides make a number of modifications to older guidelines and contain new sections to address developing issues.

“Environmentally friendly” and “eco-friendly” products

The revised Guides caution businesses not to make broad claims that a product is “environmentally friendly” or “eco-friendly.” Consumer protection studies show that when a consumer sees such broad claims, the consumer internalizes that the product has specific and far-reaching environmental benefits. Instead, the Guides instruct businesses to qualify general claims with specific environmental benefits, allowing consumers to better understand the consequences of their purchases. To avoid further confusion, the Guides warn not to highlight small or unimportant benefits. For example, a lawn mower manufacturer advertises its new line of lawn mowers as more eco-friendly due to increased fuel efficiency. In fact, the lawn mower manufacturer has increased the fuel efficiency by 0.1 percent. The manufacturer’s claim is technically correct, but the advertisement would likely convey a false impression of significantly increased fuel efficiency and broad environmental benefits.

Recyclable or degradable products

The revised Guides also caution businesses who claim their products are recyclable or degradable. A business may make an unqualified claim that a product is degradable only if it can be proven that the entire product will completely break down within a reasonably short period of time, which the FTC considers to be one year after disposal. Businesses who claim that a product is recyclable must take into account the availability of recycling facilities where the product is sold. If recycling facilities are not available to at least 60 percent of the consumers or communities where a product is sold, businesses are encouraged to identify the limitation or to clarify that the product may not be recyclable within the consumer’s area. When a product is made from recycled materials, the Guides also provide direction. Businesses are instructed to qualify claims for products that are made partly from recycled materials by stating the percentage of the product that is actually comprised of recycled materials.

Products made with renewable energy

The revised Guides add new sections to address environmental claims that were not common when the Guides were last reviewed. One new section addresses claims that a product is made with renewable energy. Businesses should not make an unqualified “made with renewable energy” claim unless virtually all of the manufacturing processes involved in making the product are powered with renewable energy. Businesses are also encouraged to specify the source of renewable energy, such as wind or solar energy.

Products “free of” certain substances

Another new section addresses claims that a product does not contain, or is “free of,” certain substances. This section advises that “free of” claims, even if true, may be deceptive if the product contains substances that pose similar environmental risks as the substance not present, or if the “free of” substance has not been previously associated with the product.

The willingness of consumers to consider the environmental impacts of their product purchases is a clear trend that your business must consider to maintain or increase its market share. But you must understand how to accurately communicate your product’s environmental benefits. The FTC’s Green Guides attempt to clarify for the business community how to market environmental benefits while stopping misleading claims.

If you have questions about how the FTC’s new Guides may affect your or your business, please contact a member of Bingham Greenebaum Doll LLP’s Environmental and Natural Resources Practice Group.

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