FTC Advises Against Unqualified "Green" Claims, Including Eco-Seals

The Federal Trade Commission says marketers should qualify or avoid general environmental benefit claims such as "green" or "eco-friendly," and, in some cases, certifications and seals of approval.

In a proposed update to its Guides for the Use of Environmental Marketing Claims, or "green guides," FTC points to its consumer perception research in which more than half of the respondents believed an unqualified "green" claim definitely or probably indicated one or more specific virtues.

For example, 61 percent assumed such a product is made from recycled materials, 48 percent that it is made with renewable energy and 45 percent that it is non-toxic.

"Because FTC law requires marketers to substantiate every express and implied environmental benefit that consumers reasonably could take from such a claim, unqualified general environmental marketing claims remain very difficult, if not impossible, to substantiate. ... Very few products, if any, have all of the attributes consumers appear to perceive from general environmental benefit claims," the agency says in its Oct. 6 draft green guides update.

FTC also notes 27 percent of survey respondents were under the impression that products bearing an unqualified "green" or "eco-friendly" claim had no environmental impact.

Appropriately qualified claims, however, were not as readily misconstrued. "Qualifying a general environmental claim can focus consumers on the specific advertised benefit and significantly reduce misperceptions about negative environmental impact," according to FTC.

Accordingly, "marketers must use clear and prominent qualifying language to convey to consumers that a general environmental claim refers only to a specific and limited environmental benefit," the agency says.

Whether a claim is qualified adequately depends largely on its context, FTC says. It offers the example of a company that reduces the weight of its packaging by 15 percent and claims that its packaging is "greener than our previous packaging." Such a claim could be considered misleading because consumers likely interpret "greener" to cover aspects of environmental impact other than packaging weight.

A marketer making an "environmentally friendly" claim because its product wrapper was "not chlorine-bleached, a process that has been shown to create harmful substances," also could mislead consumers if the wrapper's production releases other harmful substances, FTC says.

The agency also looks askance at claims highlighting an environmental improvement in one area that has an unsavory impact elsewhere for a negative environmental benefit overall.

It cites, for example, a marketer that touts its product as "Green - Now contains 70 percent recycled content," when the company "needs to import more materials from a distant source, resulting in increased energy use which more than offsets the environmental benefit achieved by using recycled content."

Certifications And Seals Of Approval

Sporting an environmental seal of approval - or a globe icon, for example - may give consumers the idea that the decorated product is environmentally superior to other products.

"Use of a certification or seal by itself may imply a general environmental benefit claim," which requires qualification just like "green" and "eco-friendly" claims do, FTC indicates.

Marketers must be able to substantiate an implied superiority claim or accompany the seal with clear and prominent language "limiting any environmental superiority representation to the particular product attribute or attributes it can substantiate," FTC says.

It notes that some third-party programs offer certification for particular attributes, such as recycled content.

Other marketers are adorning their products with logos developed internally based on company-specific standards, according to the green guides.

Such a move renders them subject to FTC's endorsement and testimonial guidelines, which define an endorsement as "any advertising message ... that consumers are likely to believe reflects the opinions, beliefs, findings or experiences of a party other than the sponsoring advertiser" (¹ (Also see "FTC Testimonial Guide Moves Past "Results Not Typical," Enters Blog Era" - Pink Sheet, 12 Oct, 2009.)).

To avoid deceiving consumers, companies with their own certification standards should specify on product labeling that the seal was awarded through an internal corporate program.

Marketers certified by a trade association to which they belong also have a responsibility to acknowledge that relationship in their marketing language if they want to highlight a certification.

"In this case," FTC says, "the certifier is not a truly independent entity because the marketer pays membership dues to the association." It adds that marketers are required to disclose any "connection between the endorser and the seller of the advertised product that might materially affect the weight or credibility of the endorsement."

FTC also points out "consumers likely place different weight on a certification from an industry association than from an independent third party," so not identifying an organization as the former could be considered deceptive.

Although the agency declines to address specifically natural and organic certifications outside the Department of Agriculture's National Organic Program, FTC could deem certification by the Natural Products Association as one that merits a disclosure if the marketer is a member of that group (² (Also see "Burt's Bees Targets Oral Care With First NPA-Certified Toothpastes" - Pink Sheet, 29 Mar, 2010.)).

Stipulations in FTC's testimonial and endorsement guides might also apply to members of the Organic and Sustainable Industry Standards group. OASIS members have proposed criteria to advertise their certified organic status.

FTC Declines To Address Organic Claims

FTC says it received comments recommending it provide guidance on the use of natural and organic claims.

The Organic Consumers Association and Consumers Union in March asked FTC to address "blatantly deceptive labeling practices" perpetrated by personal-care companies that market their products as organic though they fall short of standards upheld by USDA's National Organic Program, created in 2005 to govern the organic food marketplace (³ (Also see "Groups Seek FTC Action On Organic Labeling For Personal Care Products" - Pink Sheet, 5 Apr, 2010.)).

However, USDA does not police the organic personal-care market as it does for food, and it permits brands to certify products to private organic standards, which some industry members believe compromised the market's integrity and created an unfair business environment.

Regardless, FTC maintains "NOP provides a comprehensive regulatory framework governing organic claims for agricultural products. Because of this framework and NOP's ongoing work in this area, the Commission does not want to propose duplicative or possibly inconsistent advice."

It notes, however, that "the general principles set forth in the guides still apply" in that marketers must have evidence supporting their claims - natural and organic claims included. "More specifically, to the extent that reasonable consumers perceive organic or natural claims as general environmental benefit claims or comparative claims, the marketer must be able to substantiate those claims and all other reasonably implied claims," the agency says.

Harry Rice, VP of regulatory and scientific affairs for the United Natural Products Alliance, said in an Oct. 6 e-mail that "even though the terms ['organic' and 'natural'] were not specifically defined by the guides, there will likely be increased scrutiny on the use of such claims to ensure that the facts align with the public's perception."

FTC acknowledges USDA's program covers only agricultural materials, which make up the formulations of many but not all personal care products marketed as organic. "It is unclear how consumers understand organic claims that describe non-agricultural products and how marketers of those products substantiate their claims," FTC says, requesting consumer perception evidence and feedback on what guidance it should provide.

Comments are due by Dec. 10.

- Ryan Nelson ( ⁴ [email protected] )