FTC’s New Guidance Has Teeth to Go After Greenwashing

Companies who want to market their products as being good for the environment will need to back up their claims more carefully, in light of the Federal Trade Commission’s new environmental marketing guidelines, released this week. The “Guides for the Use of Environmental Marketing Claims,” or Green Guides, updated for the first time since 1998, discourage companies from using broad claims like “green,” “eco-friendly”, or “environmentally preferable” that are difficult, if not impossible, to substantiate. Although the guidelines are not formal rules, they do specify how FTC will enforce US marketing laws.

Instead, environmental claims should be clear, prominent, and specific — and be supported by scientific evidence. For instance, the Green Guides caution that a claim of “biodegradable” would be deceptive if the product did not completely decompose within one year after customary disposal — even if “customary disposal” does not allow an opportunity for decomposition. If the product will not degrade within one year in a trash bag headed to a landfill, such a claim would be deceptive. Instead, “will break down into small pieces if left uncovered in sunlight” is a better claim, so long as the advertiser has reliable scientific evidence that this will occur.

I found the guidance on carbon offsets to be particularly interesting, requiring sellers to properly quantify claimed emission reductions and ensure that they only sell each reduction once; to disclose when a carbon offset represents emission reductions that will only occur two or more years into the future; and not to claim any carbon offsets for activities that are already required by law. In one example the guidance gives, a website’s invitation to customers to purchase offsets to neutralize carbon emissions from their driving habits would be considered deceptive if the offsets were based on methane capture at a landfill facility, when state law already requires capture of all methane. This concept of additionality, critical in the world of offsets, is also appropriately recognized here.

For more information, the FTC’s blog has a useful post, and the agency’s environmental marketing website contains even more detail on both the revised guides and other FTC programs.

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