FTC Issues its Revised "Green Guides" for Environmental Marketing Claims
The Federal Trade Commission ("FTC") has just updated its Green Guides, providing new and clarified advice to marketers on how to avoid greenwashing when making claims about the environmental attributes of a product, package or service. The Green Guides, formally known as Guides for the Use of Environmental Marketing Claims, serve as the FTC's administrative guidance on how to avoid making deceptive environmental claims that could mislead consumers and violate the prohibition in Section 5 of the FTC Act (15 U.S.C. § 45) against unfair or deceptive claims. The Green Guides were last updated in 1998 and, in 2010, and the FTC proposed revisions to the Guides. The FTC has now finalized its update to the Guides, which is designed to address the proliferation of "green" claims in the marketplace in recent years.
In this update to the Green Guides, the FTC makes clear that the Guides apply to more than just manufacturers, noting in its Statement of Basis and Purpose issued with the Guides, that certifiers, auditors, and wholesale and retail sellers who make environmental marketing claims may also be liable under Section 5 for deceptive claims. In addition, the FTC clarifies that the Green Guides cover business-to-business marketing claims, as well as marketing claims made to individual consumers. Likewise, the content of the revised Green Guides is described quite broadly, covering all "environmental claims in labeling, advertising, promotional materials, and all other forms of marketing in any medium, whether asserted directly or by implication, through words, symbols, logos, depictions, product brand names or any other means."
Although the Green Guides are not legally-binding regulations (even though published in the Code of Federal Regulations at 16 C.F.R. Part 260), any claims that are inconsistent with the Green Guides may be subject to FTC enforcement action under Section 5 of the FTC Act. The FTC has stepped up its enforcement in recent years, bringing actions against companies related to deceptive claims concerning recyclability, biodegradability, bamboo and environmental certifications. Because the determination as to whether a claim is unfair or deceptive, is based upon a reasonable consumer's understanding of the environmental claim, the FTC used the results of a consumer perception survey to develop its revisions to the Green Guides. In addition, it considered the input received at three public workshops and thousands of comments received in response to its 2010 proposed revisions. We have highlighted the FTC's new and updated Green Guide provisions here.