On October 6, 2010, the Federal Trade Commission (FTC) released its long awaited proposed revisions to the FTC’s “Green Guides.”  The Green Guides, which were first issued in 1992 and last revised in 1998, provide guidance to marketers intended to prevent them from making misleading environmental claims.  Notably, the FTC proposes that the revised Green Guides advise marketers not to make unqualified general environmental claims, such as those which simply state that a product is “green” or “eco-friendly.”  Citing its own consumer perception survey, the FTC stated that such claims can mislead consumers about the product’s actual attributes and are difficult, if not impossible, to substantiate.  Instead, the proposed revisions would advise marketers making general environmental claims to provide clear and prominent qualifications and to limit the claim to a specific benefit. The proposed revisions also address marketing claims relating to renewable materials, renewable energy, and carbon offsets, topics not covered in the current Green Guides.

Renewable Materials.  The FTC proposes that any marketing claim that a product is made with renewable materials be qualified with specific information about the renewable material (i.e., what it is; how it is sourced; why it is renewable).  Renewable materials claims will also need to be qualified if the item’s components, except for any minor incidental components, are not all made of renewable materials.  The FTC chose not to define the term “made with renewable materials” or to endorse a particular test to substantiate whether a product is truly made with renewable materials.

Made With Renewable Energy.  The proposed revisions also state that marketers should not make unqualified claims that a product was made with renewable energy if the power used to manufacture any part of the product was derived from fossil fuels.  If a marketer does make such renewable energy claims, the marketer should identify the source of renewable energy (e.g., wind or solar).  If less than all, or virtually all, of the significant manufacturing processes involved in making the product/package were powered with renewable energy or conventional energy offset by renewable energy certificates (“RECs”), the FTC proposes that the “made with renewable energy” claim should be qualified.  Additionally, a marketer should not represent that they use renewable energy if they generate renewable energy, but sell RECs for all of the renewable energy they generate.

Carbon Offsets.  The FTC states that marketers should have competent and reliable scientific evidence to support claims relating to carbon offsets, including using appropriate accounting methods to ensure they are properly quantifying emission reductions and are not selling those reductions more than once.  Marketers should also disclose if the offset purchase funds emission reductions will not occur for two years or longer.  The proposed revisions also state that marketers should not advertise a carbon offset if the activity that forms the basis of the offset is already required by law.

The FTC opted not to provide specific guidance on use of the term “sustainable,” however, it cautioned marketers to substantiate consumers’ understanding of this claim in the context of their advertisements.

The FTC will accept public comments on the proposed revisions until December 10, 2010 and is seeking comment on all aspects of its proposal.

[Read the full FTC proposal]

For further information please contact Eric Unis