In what was the next of the Federal Trade Commission’s (“FTC”) pillar documents to undergo an overhaul, the FTC yesterday disclosed its proposed revisions to its Guides for the Use of Environmental Marketing Claims (the “Green Guides”). The Green Guides (16 C.F.R. Part 260) set forth the FTC’s position on permissible environmental claims in advertising. The Green Guides were first issued in 1992 and then revised in 1996 and 1998. The proposed revisions have been released for public comments through December 10, 2010, at which time the FTC will decide on those changes that make the final cut.

The FTC has communicated that its goal in releasing the Green Guides’ revisions is to provide marketers with guidance in helping them avoid making misleading environmental claims, and also to update the guides and make them easier for companies to understand and use. According to FTC Chairman, Jon Leibowitz: “In recent years, businesses have increasingly used ‘green’ marketing to capture consumers’ attention and move Americans toward a more environmentally friendly future. But what companies think green claims mean and what consumers really understand are sometimes two different things. The proposed updates to the Green Guides will help businesses better align their product claims with consumer expectations.” Let’s see…

Adhering to many of the same trends and areas of focus upon which the FTC undertook its revision of the endorsement and testimonial guidelines last year, the FTC has sought to curb unqualified general environmental benefits that are nearly impossible to substantiate, to limit claims as much as possible to those benefits actually realized by consumers, and to ensure advertisers make their disclosures clearly and prominently.

Areas of environmental advertising and marketing taken up within the Green Guides by the FTC include:

  • Certifications and Seals: Third-party certification does not eliminate an advertiser’s need to have substantiation for all claims, and the FTC considers both certifications and seals to be endorsements, and therefore, subject to the FTC’s Endorsement Guidelines;
  • Compostable: An advertiser may not describe a product as “compostable” unless it can substantiate that all of the materials comprising such product will break down into, or otherwise become a part of, usable compost in approximately the same time as the other material with which it is composted;
  • Recyclable: Advertisers may only assert an unqualified “recyclable” claim if a “substantial majority” of consumers have access to recycling facilities. Otherwise, advertisers shall be required to qualify a “recyclable” claim depending on whether a “significant percentage” have or lack access to recycling facilities;
  • Degradable: An advertiser should only qualify a product as being “degradable” if it can substantiate that the entire product or product packaging will completely break down and return to nature within one year of customary disposal practices. Accordingly, advertisers should not make unqualified “degradable” claims for items likely destined for landfills, incinerators or recycling facilities.

Among a number of hot-button issues which the FTC took up, a great deal of discussion centers on the issue of an advertiser’s use of the word “free” in its advertising and marketing materials. The FTC has proposed that advertisers may not employ the expression “free” to describe the absence of a substance if: (i) the item has substances that pose the same or similar environmental risks as the mentioned substance, or (ii) the substance has never been associated with the product category. Interestingly, the FTC recognized that use of the term “free” may convey (intentionally or not) additional environmental claims such as superiority over other products, and these claims will also require substantiation.

Some of the new areas taken up by the FTC in its proposed revisions include claims that products are manufactured using (i) renewable materials, (ii) renewable energy and (iii) carbon offsets. Of interest however, is the fact the FTC chose not to address use of the terms “sustainable,” “natural” or “organic.”

We intend to issue a more detailed client alert on the proposed revisions to the Green Guides in the coming days, so stay tuned. As always, if you have any questions or concerns regarding the FTC’s announcement and the proposed revisions, please feel free to contact Doug Wood, John Feldman or Adam Snukal.