Social media marketers often try to lure in customers by appealing to their sense of environmentalism. They tout their products as being green, biodegradable, or good for the environment. Such marketing is particularly effective with Generation X.
A study last year showed that twelve to fourteen percent of that group of consumers displayed allegiances to company’s based on information they found on social media regarding the company’s environmental impact.
In October 2014, the FTC announced that it had sent warning letters to fifteen marketers of plastic waste bags. These companies’ marketing deceptively led consumers to believe that their plastic bags would biodegrade faster than standard plastic bags. With this announcement, the FTC continues its enforcement of the Green Guides, and environmental marketers should pay attention.
FTC Enforcement Activity
In 2012, the FTC updated its Green Guides to clarify terms in environmental marketing. In the first half of this calendar year, the FTC enforced its Guides actively, sending a message to companies that they should only advertise environmental attributes that have full, rather than theoretical ones.
For example, the FTC settled with three companies relating to plastic lumber products (for example, picnic tables and benches). The manufacturers claimed their products were made of “recycled plastic” or were made “entirely of recycled plastic lumber.” In fact, the products contained other items besides recycled plastic.
In some instances, the companies alleged that the products were easily recyclable. The FTC reminded companies in these settlements that all these advertising claims required substantiation showing that the products were made entirely from materials reclaimed from the waste stream.
In addition, the FTC enforced its “60%” rule on recycling. A product can only be called recyclable if it can be collected through an established recycling program. Thee program must be available where a substantial majority of customers live, namely 60% of the customers. If the manufacturer cannot meet that threshold, its advertising in certain markets must disclose that recycling is limited in those areas.
In explaining its enforcement activity, the FTC noted on its blog, “consumers – and the FTC – live in the Real World. That’s a theme that runs throughout the Guides. A product may have a theoretical environmental effect in a lab setting, but your ad claims should reflect actual consumer use. So if a product may be recyclable in some technical sense, but there’s no place for people to conveniently recycle it, craft your claims accordingly.”
In addition, in issuing its warning letters in October, the FTC warned companies that they were not off the hook just because they did not receive a warning letter. In fact, the agency urged companies to do a thorough review of all green advertising.
Green Guide Requirements
The FTC has made it clear that essential principles of truthful advertising apply to environmental claims. The Green Guides offer the following reminders:
- General Benefit Claims – Avoid unqualified general claims, like “green” or “ecofriendly” regarding environmental benefits. Explain what aspects of your product provide environmental benefits.
- Substantiation – Claims need a reasonable basis, supported by scientific evidence.
- Specificity – Claims should focus on the specific environmental benefit. Avoid implying that any specific benefit is significant if it is negligible.
- Prominence – Claims should be clear, prominent and understandable language.
In its 2012 revisions to the Green Guides, the FTC also took a hard look at certification programs, eco-seals, and seals of approval relating to environmental marketing. Third-party certification does not eliminate the need for substantiation. Furthermore, the certification must convey the basis for the certification and such certifications are also subject to the FTC’s rules for Endorsements and Testimonials and requirements to disclose a material connection with the certifier.
The Green Guides also provide detailed analysis of many environmental terms. The FTC’s goal is that consumers should be able to understand advertising and the benefits of products. Here are some examples of terms regulated in the Green Guides.
- “Recyclable” – Use of this term depends on accessibility of recycling facilities. If the recycling facility is not available to a substantial majority of the consumers, meaning at least 60%, you may need qualifications such as “product may not be recyclable in your area,” or “product is recyclable only in the few communities that have recycling programs.”
- “Degradable”, “Biodegradable”, or “Photodegradable” – These terms require scientific evidence, showing that the entire product or package will completely break down and return to nature within one year.
- “Compostable” – The marketer must be able to prove that the materials in the product or package will break down in approximately the same time as the materials with which it is composted.
- “Ozone safe”, “Ozone Friendly”, and “No CFC’s” – It is deceptive to misrepresent that a product is safe or friendly to the ozone layer of the atmosphere.
- “Non-Toxic” – This is a newly regulated term. To use this desciptor, the item must be non-toxic both for humans and for the environment.
- “Made with Renewable Materials” – In another new section, the FTC cautions that these claims must explain what the materials are, how they are sourced, why they are renewable, and what percentage of the materials are renewable. If a product contains less than 100% renewable materials, marketers should further qualify their claims.
- Carbon Offsets – The FTC will look for reliable scientific evidence to support these claims and appropriate accounting methods. In addition, the FTC Cautions not to advertise an offset if the activity that forms the basis of the offset is already required by law. Marketers should also disclose if the offset would not occur for two years or longer.
- Free-of Claims – A marketer can claim an item is “free of” a potentially harmful substance if there is a trace amount that cannot materially harm consumers. In addition, even if the item is free of the harmful substance, the marketer should not market a “free of” claim if the product still poses an environmental risk.
- Renewable Energy Claims – This is a complex new edition to the Green Guides. Renewable energy claims are appropriate if “all, or virtually all, of the significant manufacturing processes involved in making the product or package are powered with renewable energy or non-renewable energy matched by renewable energy certificates.” To minimize the risk of deception, marketers should identify the source of renewable energy and assess their substantiation.
Steps to take:
- Familiarize yourself thoroughly with the Green Guides. Determine which of them may apply to your advertising, and conduct a full advertising audit to determine if you have sufficient scientific evidence to support your advertising claims.
- The FTC also wants manufacturers to know that they are responsible for the claims they provide to their distributors and retailers. Companies marketing green products should ensure that all players in the distribution chain understand the limits of truthful advertising when touting products’ environmental benefits.
- To reduce the risk of deceptive advertising, always make claims that apply to your entire product, not part. If you cannot do this without reliable scientific backup for your claim, always think about making qualified claims.
- Remember that the FTC cares about how consumers actually use products in deciding whether green marketing claims are valid. It does not matter if the products contain theoretical environmental benefits if consumers cannot or do not access them.
- When using qualifiers, remember that the FTC’s DotCom Disclosure Guides apply on the Internet. Stay away from hyperlinks that are not clear. Remember that space-constrained advertising in social media may require different kinds of disclosures.
© Kyle-Beth Hilfer, P.C. 2014
DISCLOSURE: This article does not constitute legal advice. If you have specific legal questions about environmental advertising, please contact this post’s author or another attorney.