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FTC Revises, Adds to Green Guides

 

HIGH POINT, N.C. - In October, the Federal Trade Commission released its revised Green Guides, which take aim at making sure marketers substantiate environmental claims.
     The Guides contain new sections on certifications and seals of approval, carbon offsets, free of claims, non-toxics, renewable energy and renewable materials claims. They also have guidance on compostable, ozone, recyclable and recycled content claims.
     The guides are general principles for environmental marketing and give guidance for qualifying and substantiating claims for clarity with consumers.
     The FTC issued the first Green Guides in 1992, with subsequent updates in 1996 and 1998. Changes were proposed in 2010 following the green renaissance of the mid-to-late 2000s, which helped shape the newly revised guides.
     The FTC noted that in recent years it has stepped up enforcement against companies making deceptive environmental claims. In one case, the FTC sued a company offering "free" books showing consumers how to become "green millionaires" by installing roof solar panels for free.
     Since 2009, the FTC has settled or barred exaggerated energy efficiency cost savings claims by window makers, green certifications that were neither tested nor green, biodegradable claims, rayon fabric advertised as "environmentally friendly" bamboo, and paper products that were claimed to be biodegradable.
     According to the guides, all marketers, regardless of their size, must comply with Section 5 of the FTC Act, which prohibits ‘‘unfair or deceptive acts or practices in or affecting commerce.''
     The FTC often gives small businesses a chance to come into compliance after informal counseling or a warning letter advising them of the need to revise claims, according to the guides. If a company fails to respond, it often follows up with investigations and enforcement.
     The guides were revised to make them more sophisticated and up-to-date, said Vicki L. Worden, president of Worden Associates, which consults with the Specialty Sleep Assn.
     "So much has changed from when the original version was put together in terms of environmental marketing claims, and that was really the purpose of creating a revised version of the guides," Worden said.
     "In terms of furniture and bedding, I think there are still a lot of general claims being made by the industry and the updated green guides are very loud and clear (that) there should not be unsubstantiated claims made," she said.
     The guides direct marketers to craft messages that give consumers a uniform way to judge one product against another, she said. They emphasize that marketers should be able to qualify all claims.
     Among the changes, the guides caution marketers against making broad and unqualified claims that products are "environmentally friendly" or "eco-friendly" because very few have the attributes consumers perceive with those claims.
     Other changes involve claims that a material is "renewable." Those claims must be qualified with terms that distinguish how fast a renewable material like bamboo is replenished, or by saying how fast a renewable material is replenished compared with how much of it is used.
     One area addressed is the relationship between providers of seals and certifications and the manufacturers - namely that those relationships are clear to the consumer, so the credibility of claims can be assessed, Worden said.
     Seals should also clearly show what attributes are being highlighted so consumers have a basis for comparison, she said.
     "Without that, the seal seems to elevate a product but it doesn't necessarily provide a consumer with the ability to really differentiate between the two," Worden said. "You can't anymore just have a general seal of approval that a consumer has to draw their own conclusion as to what it's saying."
     The FTC did not to address the terms sustainable, natural and organic. Worden said the FTC decided "sustainable" has too many different meanings to be able to address, and must be substantiated specifically.
     For organics, the FTC opted not to duplicate government efforts by other government agencies. Guidance for those claims are defined by through the U.S. Department of Agriculture's National Organic Program.
     That information is online at http://www.ecfr.gov/cgi-bin/text-idx?c=ecfr&SID=61a915bc2327 b8a3c90518e1b3fe5231&rgn=div5&view=text&node=7:3.1.1.9.3 2&idno=7.
     Sandra Marquardt, the Global Organic Textile Standard representative in North America, said that not having the terms sustainable and natural clearly defined is a weakness, when there is such extensive specificity by the USDA for production and terminology in organics.
     "I don't know why they didn't (define the terms). They've already taken years to address natural or sustainable so it seems to be an oversight," Marquardt said. She added that, for example, livestock and produce have specific legal definitions spelled out for "organic."
     Most farms and businesses that grow, handle, or process organic products must be certified, according to the USDA.
     The FTC said it did not have the legal authority to define the terms natural and sustainable since they convey a wide range of meanings, not all environmental. They said no consensus had been reached on how to measure that those qualities.
     The FTC did say that if marketers use "sustainable" and if a consumer perceives a general environmental benefit claim, marketers should be able to substantiate the claims.
     "With the increasing amount of organic furniture out there such as mattresses, chair coverings, fabrics - you want to know what you're getting. With the word ‘organic' you can. With sustainable and natural, particularly with natural, there's no definition," Marquardt said.
     Having a strict set of rules in place raises the question of whether the guides may have a chilling effect on companies that decide making a green claim is too difficult.
     Worden said the guides should help ensure the marketplace isn't overwhelmed with claims that can't be defended.
     The rules could create a need for cross functional teams to work on marketing campaigns that include legal counsel familiar with Green Guides, along with product designers and marketers who can agree on what claims a company can make, Worden said. "It has the potential to dissuade those that wouldn't jump into the market with both feet. This type of scrutiny by the federal government could dissuade those who just want to dabble," Worden said.
     "For those who are serious about going after this niche - a potentially high dollar niche market - it's going to provide more incentives for that group to ensure that they have their third party certifications in place and have fully thought through their marketing programs," she said.
     The Global Organic Textile Standard's Marquardt said that the role of the guides is to have an enabling effect.
     "If it has a chilling effect it means that the companies were doing something wrong," Marquardt said. "I think if anything this gives liberty to companies to make claims that are truthful and accurate that consumers can believe in and that are the right things to do by the environment."

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