So last month I spouted off about labels on food and the enforcementbehind them. The topic is a confusing once since there is very littleregulation, which leads to consumer confusion. There are however,guidelines with the FTC that prevent green washing in marketing underthe banner of Truth in Advertising. Unfortunately most businesses havevery little knowledge of these guidelines, due to their lack ofenforcement, and therefore even the most sustainably-minded companiesare often guilty of green washing. But the Obama administration hasstated that enforcement of these guidelines is a priority going forward, so consumers are about to get some clarity!
To check out the green guides for yourself you can read them at the FTC website. Or you can keep reading for a snarky summary.
The Green guides apply to all environmental claims that are includedin any kind of marketing, whether directly or by implication. So acompany needs to take the guidelines into account for every aspect oftheir marketing including labeling, advertising, promotional materialsand any marketing through words, symbols, emblems, logos, depictions,product brand names, digital advertising, attributes of the productsthemselves, as well as the packaging, or services (if you are a services company). The rules are actually pretty expansive. If you even somuch as place a leaf in your logo (see mine) , you better know the implications.
These guidelines are not definitive rules on how to do things. Other approaches are permissible, but the guides are meant to be asafe-harbor for businesses/marketers. If you followed them and yourmarketing was still green washing, then no harm no foul, just changeyour marketing to correct the error.
So the basic requirements are these:
- You have to be clear.
- Draw a distinction between the benefits of the product, package or service
- No exaggerations about environmental benefits.
- Explain comparisons, don’t leave us hanging (20% more than what?)
If you are making qualifications or disclaimers, they need to beunderstandable. The customer needs to know what you are qualifying ordisclaiming. What is more relevant however, is knowing when you need aqualifier or disclaimer. You need to be clear about what the claim isreferring too. Is it the product, the product’s packaging, a service,or just a portion or component of the product or service? If you market something as recyclable, is every part of it including the packagingrecyclable?
The Guides give more specific examples of how these principles areimplemented, especially when it comes to the use of certain words.General claims whether intentional or not can be deceptive andmisleading, including the company name. If your name is “Green Fuel”and you own some oil platforms……… (doesn’t matter that your last name is Green). I wonder if French’s mustard is misleading. It certainlyisn’t French. Perhaps the apostrophe solves that problem.
- Degradability, biodegradability, or photodegradability should bequalified (explained) in two ways: 1. the product or packages ability to degrade in the environment where it is customarily disposed and 2. therate and extent of degradation.
- Compostable. Two things to consider: 1. can the package or productbe safely composted in a home compost pile or device; 2. does the claimmislead consumers about the environmental benefit provided when theproduct is disposed of in a landfill. If it is only compostable at thelocal municipality composter, then say that. You also have to include a disclaimer that municipal facilities may not exist. Also, how safe isthe resulting compost? If it decomposes but leaves behind toxicchemicals, you have violated the rules because composting (in the mindof the consumer) is usually an environmental benefit and can be used for other purposes.
- Recyclable. Pretty much the same as above. It has to berecyclable, and accepted by recycling programs. If because of size,shape, or any other reason, centers won’t take it, then you have misledthe consumer, despite the fact that you did not technically lie. Youalso need a disclaimer about the limited access to recycling facilities. You have to tell people that they may not have recycling available intheir area. When was the last time you saw that on packaging? Hmmm……
- Recycled content. Is it pre or post consumer (you don’t have todisclose that) but if it is pre, the marketer has to have solid evidence that the content would have otherwise entered the solid waste stream.The material has to have been recovered; it cannot be recycled rawmaterials.
- Source reduction claims should be qualified. If weight, volume, ortoxicity have been reduced, by how much and compared to what?
- Refillable. Need to have a collection or refill program set up. If it is up to the consumer to be creative, get rid of the claim.
- Ozone Safe and Ozone Friendly. Good Luck!
Obviously some big ticket items are missing, like carbon neutral,carbon recapture, carbon credits, etc. The Ozone layer was the bigconcern/buzz words when these guides were initially drafted. We now use a very different language to describe eco-benefits. The FTC iscurrently reviewing these standards and will be issuing furtherguidance. So stay tuned on the language we are actually using.
Main thing to remember:
When making any express or implied assertion or claim about theenvironmental attribute of a product or service, at the time theassertion was made, the marketer must have possessed and relied upon areasonable basis (competent and reliable evidence) substantiating thatassertion.
The “reasonable basis” is generally held to mean that there isreliable scientific evidence in the form of tests, analyses, research,studies, or other evidence based on the expertise of objectiveprofessionals in the relevant area.
The Green Guides are not actually enforceable regulations. Compliance is completely voluntary. These guides are an administrativeinterpretation of the laws administered by the FTC. The real teeth arewith Section 5 of the FTC Act. Section 5 prohibits deceptive acts andpractices in or affecting commerce. So the only way the guides areenforced is that non-compliance may mean that you are failing to satisfy the rules in Section 5 of the FTC Act and the FTC can take correctiveaction there.
“Deceptive” is determined by three factors:
- There must be a representation, omission or practice that is likely to mislead the consumer
- Likelihood of misleading based on Reasonable person standard/Reasonable Group Standard.
- The misleading representation, omission or practice was material
The reasonable person standard/group standard looks at who themarketing is intended for, whether that is an individual, a sub-culture, or a definable group and determines how they would reasonably interpret the representation. Materiality is present if the misleading claim islikely to affect the consumer’s conduct or decision regarding theproduct or service. Omissions are included. If you neglect to saysomething material, it is deceptive.
So having read all that (sure you did), what do you think? Green Marketing or Green Washing?
Tune in for my next blog post. I will go over the current casesbrought by the FTC and how companies have gotten into trouble. I willalso let you know how international transactions are being effected(Europe way harsher than the US thank god) and I’ll give you a heads upon what is heading our way.