It just got a little easier being green. Yesterday, the FTC announced the final version of its revised Green Guides. And as one might expect, the FTC did not just recycle its prior draft but made some important revisions, based in part upon many of the approximately 340 unique comments it received.
Jim Kohm, Enforcement Division Director from the FTC’s Bureau of Consumer Protection, unveiled the draft revised Green Guides two years ago at the NAD conference and had the honor of unveiling the final guides at this year’s NAD conference. We’ll blog later in more detail on some of the issues presented by the new Guides, but some of the key takeaways from Mr. Kohm’s presentation are set out below.
- The FTC is not looking to play “gotcha” with the guides for companies that are legitimately trying to advertise in good faith and stay on the right side of the line. If you inadvertently step over the line they will try to work with you to bring you back over.
- The FTC does not set environmental policy and their purpose is not to promote or denigrate green claims. Instead, their goal is to avoid having the field polluted by deception and to avert the possibility that consumers may stop listening to all green claims because of deception.
So what are some of the key differences between the draft guidelines and the final guides? We summarize a few important ones below.
General environmental claims – If you advertise that your product has an overall benefit to the environment because of a specific attribute (e.g. you’ve switched from one type of material to another) you should analyze any trade-offs that resulted from the switch to make sure that there is an overall benefit. Whether you need to do a more extensive lifecycle analysis depends in part upon the nature of the claim and the trade-off.
Carbon Offsets – No real changes here but Mr. Kohm emphasized that the FTC only addressed regulatory additionality (whether you were required by law or regulation to take an action) because there is still a great deal of discussion and disagreement within the environmental community about other types of additionality.
Seals and Certificates of Approval – The final guides clarify when you have to disclose a material connection to the certifying organization, particularly with regard to trade associations that certify members’ environmental claims. If the trade association standards were developed and maintained by a voluntary consensus standard body and applied by an independent auditor then there is no disclosure requirement, as the standards are not “biased” and consumers are presumed to assume that the certification was “paid for” whether through trade association membership or by direct payment to a third party certifying organization.
The requirement that you qualify any claim that a green seal implies, such as general environmental superiority or ‘no impact on the environment,’ continues. This qualification should be part of the seal itself or be in a disclosure that is in close proximity to the seal (i.e. no reference to online disclosures for claims that appear in brick and mortar stores.) Of course, there’s an exception to every rule, or “guide” in this case. If you are using a seal that evaluates products on attributes that are too numerous to readily enumerate the final guides say you can comply with the disclosure requirement by including the disclaimer: “Virtually all products impact the environment. For details on which attributes we evaluated go to www._________”.
Compostable and Biodegradable – There is not much change here. Mr. Kohm did address some of the new plastics that breakdown more readily. With regard to compostability, if a product using new plastic technology will compost only in very specific commercial facilities that are not readily available to most consumers then this must be disclosed. With regard to biodegradability in landfills, he cautioned against relying on ASTM standards that may suggest that such plastic products will biodegrade. Such standards, he said, do not generally reflect typical landfill conditions. (Some landfills are becoming more “aerobic” and thus conducive to biodegrading but are also not readily accessible to most consumers and so a disclaimer would be in order.)
“Free Of” claims – “De minimis” has been replaced by “trace amount” So if a product contains only a trace amount of a substance, this trace amount does not cause the harm typically associated with that substance and you didn’t add it intentionally to the product you can say “free of.” Except that it may be misleading to say that your product is “free of” a substance that has never been associated with that product category (it’s okay if your product never had it as long as other products in the category did.)
Nontoxic – Pets are people too or maybe just part of the environment. In either case the FTC has clarified that general nontoxic claims also apply to our various four-legged, winged and finned friends.
Recyclable – The final guides modified the proposed three-step analysis for what type of recyclable claim you can make. A claim of recyclable should be qualified when facilities are not available to at least 60% of the consumers or communities where the product is sold. After that the former strict percentage tests have been abandoned for a sliding scale. If facilities are available to only a few consumers the qualifying language should state that the product is recyclable in only a few communities. If it is somewhere in between, then you can use the qualifier that “this product may be recyclable in your area.”
Claims That Were Not Addressed – The final guides, like the draft, do not address the use of “natural” or “sustainable.” However, the FTC cautioned at a press conference yesterday that this does not mean that they would not bring an enforcement action based upon the use of those claims in an appropriate case.
The Future – The FTC is unlikely to do a complete review of the revised guides for another ten years. However, they could potentially make minor modifications, particularly if they obtain suitable information to help them provide guidance in certain areas. Mr. Kohm mentioned three such potential areas where the Commission would welcome additonal information: how to define recycled content with respect to preconsumer content, other types of additionality for offset claims and the use of sustainable as a “green claim.”