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Federal Trade Commission to issue updated "Greenwashing" guidelines

"All generalizations are false, including this one." - Mark Twain

In 1992, the Federal Trade Commission (FTC) issued its first "Green Guide" to provide guidance to marketers about making environmental claims about products sold in the United States.  The FTC amended the Green Guide in 1996 and 1998.  In October 2010, the FTC proposed new revisions, which were open for public comment through December.  These revisions will eventually take effect and impact all those who are making claims regarding a particular product's "eco-friendliness."

In an earlier blog entry, I wrote about false environmental claims, known as "greenwashing."  The new FTC guidance gets more specific and limits claims that can be made, with the focus being on substantiation of the claims.  If a company thinks it can make such claims without some form of oversight, it should be aware that the FTC has pursued greenwashing claims and will likely continue to do so.  The penalties can be as much as $16,000 per claim and the FTC encourages citizens to make claims either by phone or online.

The new guidance expands the types of product claims that may run afoul of the FTC's Green Guide.  For example, general claims of environmental benefit (i.e., that something is "green" or "eco-friendly) should not be made.  Instead, the claim should identify the specific benefit the product offers, with any qualifications clearly presented.  Even if there are clear stated benefits, those benefits should also be substantiated.  In the context of "biodegradability," complete decomposition should occur within a short time frame, which is considered a year after disposal.  Or if the claim is that something is "compostable," all materials in the product or package should break down in a timely manner.

The new Green Guide adds new requirements to items already covered by the existing Green Guide, like claims related to certifications or seals of approval, whether a product is ozone-safe or ozone-friendly, whether something is recyclable, and whether the item is free of toxins or non-toxic.  In addition, the FTC has added new elements related to claims about renewability, whether something is manufactured using renewable energy (including specifying what type of renewable energy was used), and whether the manufacturer has offset its carbon use using carbon offsets

The revision and additions to the Green Guide demonstrate the marketing value of "green" claims.  A significant portion of consumers now seek out sustainable products and these consumers cut across all income ranges, educational levels, household sizes, and age brackets, according to one study.  Nothing devalues the market or creates more cynicism about green claims than companies who oversell the sustainability benefits of their products and services.  The FTC's new guidance should make consumers more comfortable about buying "green," although all claims about the benefits of products and services, whether based on sustainability or other benefits, should be substantiated by the consumer.  

The author, Saulius Mikalonis, is an environmental attorney with over 25 years of experience in the Bloomfield Hills offices of Plunkett Cooney.  He is also the author of The Green Blawg, in which he writes about environmental law issues for the non-lawyer.  In addition to practicing law, Mr. Mikalonis is an adjunct professor at the Thomas M. Cooley Law School, Auburn Hills Campus, at which he teaches a course entitled "Sustainable Development Law & Policy" and a Board Member of the Detroit Regional Chapter of the United States Green Building Council (USGBC).

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