Tuesday, October 12, 2010

FTC Proposes Revisions To Green Guidelines


The FTC issued its Guides for the Use of Environmental Marketing Claims, commonly known as the Green Guides, to help marketers avoid making environmental claims that are unfair or deceptive under Section 5 of the FTC Act. The Green Guides outline general principles that apply to all environmental marketing claims and then provide guidance on specific green claims, such as biodegradable, compostable, recyclable, recycled content, and ozone safe. The FTC issued the Guides in 1992, and updated them in 1996 and 1998. The Commission currently is reviewing the Guides, as detailed below.
Recent Developments
The FTC is currently reviewing its Green Guides to ensure that they are appropriately responsive to changes in the marketplace and in consumer perception of environmental claims. Because of the proliferation of green claims in the marketplace, the FTC commenced the review in November 2007, over a year earlier than it originally planned, as part of its regulatory review program. Through this program, the FTC periodically reviews all of its rules and guides to examine their efficacy, costs, and benefits, and to determine whether they should be retained, modified, or rescinded.
As part of the Green Guides’ review, the Commission is requesting public comment on the Guides and is holding a series of public meetings to discuss various green marketing issues. 
The FTC held its first workshop on January 8, 2008 in Washington, DC. That workshop focused on the marketing of carbon offsets and renewable energy certificates (RECs). Carbon offsets fund projects designed to reduce greenhouse gas emissions in one place in order to counterbalance or “offset” emissions elsewhere. RECs are created when renewable power generators sell their electricity as conventional electricity, and then sell the environmental attributes of their power separately through a certificate. More information about this workshop, including a transcript and webcast, can be found at: http://www.ftc.gov/bcp/workshops/carbonoffsets/index.shtml.
The second workshop, held on April 30, 2008, examined developments in green packaging claims and the consumer perception of such claims. The workshop focused on the range of claims marketers use to tout that their product packaging is “green,” such as recyclable, biodegradable, compostable, and sustainable. Workshop participants discussed: 1) trends in packaging and the resulting environmental packaging claims; 2) whether consumer perception of the specific packaging terms currently covered by the Green Guides has changed over the past decade; 3) new green packaging terms not currently addressed in the Green Guides; 4) consumer perception of claims based on third-party certification; 5) the impact of scientific and technological changes, including the use of new packaging materials and their impact on the environment; 6) the current state of substantiation for green packaging claims; and 7) the need for new or updated FTC guidance in these areas. The workshop agenda, transcript, and webcast can be found at: http://www.ftc.gov/bcp/workshops/packaging/index.shtml.
The Commission’s third workshop was held on July 15, 2008, in Washington, DC. This workshop examined green claims about textiles, building products, and buildings. Workshop participants discussed, among other things, consumer perception of green claims about these products; substantiation for the claims; third party certifications or seals for green textiles, building products, or buildings; and the need for new or updated FTC guidance in this area. More information about this workshop can be found at: http://www.ftc.gov/os/2008/06/P084203ggfrn.pdf.
Enforcement Actions
The Commission has brought law enforcement actions targeting allegedly false or unsubstantiated environmental claims. Because the Green Guides are administrative interpretations of the law, they do not have the force and effect of law and they are not independently enforceable. However, if a marketer makes claims that are inconsistent with the Guides, the FTC can take action under Section 5 of the FTC Act, which prohibits unfair or deceptive practices.
A list of Commission enforcement actions related to environmental marketing claims brought between 1990 and 2000 can be found here: 
http://www.ftc.gov/bcp/conline/edcams/eande/index.html.
More recent enforcement actions related to rayon fabrics and textiles being marketed as made of bamboo in an environmentally friendly way when they were not can be found here: http://www.ftc.gov/opa/2009/08/bamboo.shtm, and a press release and related letter sent to nearly 80 retailers warning them that their advertising claims related to "bamboo" textiles might be misleading can be found here: http://www.ftc.gov/opa/2010/02/bamboo.shtm.
Other cases brought recently concerning claims related to biodegradability or papers and related products can be found here:  http://www.ftc.gov/opa/2009/06/kmart.shtm
Consumer Resources
The FTC has a variety of consumer and business education resources to help explain certain environmental claims and other energy issues for which the Commission has responsibility.
For consumers, the FTC has issued two brochures, “Sorting out ‘Green’ Advertising Claims” and “Eco-Speak: A User’s Guide to the Language of Recycling.
For businesses, the FTC has issued a brochure, “Complying With the Environmental Marketing Guides.” This publication provides an overview of environmental marketing claims and the Green Guides. It also includes the complete text of the Guides.
More information about the Green Guides can be found on the Energy and the Environment microsite, www.ftc.gov/energy. This page also has links to information on energy labeling for consumer products, retail sales of electricity, insulation and home energy issues, and fuel and automotive products. The site also has interactive consumer education pieces that suggest ways consumers can save energy and money in their homes, www.ftc.gov/energysavings, and at the gas pump, www.ftc.gov/savegas.
The proposed revised Green Guides were issued on October 6, 2010, and can be found at the following link: http://www.ftc.gov/os/fedreg/2010/october/101006greenguidesfrn.pdf.  The press release announcing them can be found at http://www.ftc.gov/opa/2010/10/greenguide.shtm, and a summary of the proposed Guides can be found at http://www.ftc.gov/os/2010/10/101006greenguidesproposal.pdf.
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