April 21 Presentation: Changes Coming with New FTC Green Guides

Stoel Rives attorney Jay Eckhardt will give a presentation on April 21 addressing the proposed new FTC Green Guides.  The presentation will focus on new FTC guidance and interpretations concerning renewable energy claims and carbon offset claims, as well as claims concerning renewable materials, and the use of green seals and certifications.  Going beyond the Guides - the presentation will also review  the broader enforcement environment.  The program is sponsored by the Sustainble Future and Antitust & Trade Regulation Sections of the Oregon State Bar, and the Green Business Initiative at the University of Oregon School of Law. 

For event details and logistics, click here.  Admission to the live event in downtown Portland, Oregon is free.  A telephone number and passcode will be provided for attendees unable to attend in person. 

For more information on reguation of environmental marketing, see the Stoel Rives Green Guides Resource Page.

Environmental Leader: Green Marketing Certifications - No 'Angels' in the USA

Environmental Leader published a column today by Stoel Rives' Joseph Eckhardt, addressing the regulation of environmental certification programs. 

On the one hand, the FTC in the United States takes an enforcement approach, recently challenging a company that was marketing a sham certification program.  In Europe and  Canada, in contrast, regulators have done something different, appointing private firms to assess and certify "green" products and services. 

Read the full column here.

Environmental Leader: Best Practices for Renewable Energy, Carbon Offset Claims

The online newspaper Environmental Leader recently published a column by Stoel Rives' Joseph Eckhardt, addressing rules in the FTC's proposed Green Guides that address green energy and carbon offset certification, entitled "New Green Guides Suggest Best Practices for Renewable Energy, Carbon Offset Claims." 

The article explains:  "The FTC's proposed, revised Guides for the Use of Environmental Marketing Claims . . . for the first time address the issue of marketing green energy and carbon offsets.  Producers, resellers, and consumers of 'green' certificates and credits should take notice."

Read the full column here.

New FTC "Green Guides" Are Out of the Gate

Following several years of development, and much anticipation in recent months, the Federal Trade Commission has finally released “Proposed, Revised Green Guides.”  The new Green Guides will be open for public comment until December 10, 2010.  Thereafter, according to the agency’s press release, the FTC will determine if and how to issue the new Guides. 

The proposed, revised Green Guides are summarized here and published with substantial analysis and comment here; the FTC invites submissions of public comments here.

 

The current official Green Guides, last updated in 1998, provide non-binding “interpretations” of federal consumer protection laws, including Section 5 of the FTC Act (15 U.S.C. § 45), which is the law that empowers the agency to punish deceptive practices.  In general, the Guides establish that false or deceptive environmental marketing claims can be challenged under the FTC Act.  The Green Guides also provide instruction and interpretations of marketing buzz words that were popular in 1998, such as “biodegradable,” “compostable,” “recyclable,” “refillable,” and “ozone safe.”   

The proposed new Green Guides address the terms found in the 1998 edition, but also address several new issues that arise in present-day green marketing, including:

  • environmental seals of approval,
  • “free-of” and “non-toxic” claims,
  • carbon offsets,
  • claims concerning renewable energy, and 
  • claims about renewable materials. 

The proposed Green Guides reinforce and restate the FTC’s reasonable policy position that environmental marketing claims should be supported by credible scientific evidence.  In addition, the proposed Guides expressly discourage sweeping unqualified claims.  For example, the Guides explain that an unqualified claim that a product is “eco-friendly” is inherently deceptive.  In contrast, a simple clarification – if it can be substantiated – may be acceptable.  The proposed Guides state that a claim such as “eco-friendly:  made with recycled materials” is not deceptive if the clarification is prominent, and can be proven.

 

For the most part, the proposed Green Guides do not represent a radical shift from the 1998 version of the Guides.  And on a careful reading of the revised Guides and the preceding 186 pages of analysis and comment provided by the FTC, it’s clear that the fundamental issue is deception.  It’s deceptive to say your product has 50% more recycled contents than it used to, when your product only increases recycled content from 2 to 3 percent.  It’s deceptive to mark your product with your own green “seal of approval” and not disclose that you made up the seal yourself.  It’s deceptive to claim that you’ll plant trees to offset carbon emissions from your products, when it will take 10 years for the trees to get big enough to actually offset those emissions.

 

Ultimately, it does not appear that the FTC is proposing a major shift in regulations.  The key question for any environmental marketing claim remains:  is the claim “deceptive” under Section 5 of the FTC Act?  The bigger question is, how will enforcement change?  Last February, The New York Times reported that the FTC has filed seven complaints concerning environmental marketing claims since President Obama took office (compared to zero during the prior administration).  If enforcement remains at that level, there cannot be substantial application of the new Green Guides.  Then again, given the rapid growth of environmental marketing claims in recent years, the FTC’s renewed interest in this subject, and the threat of state consumer fraud actions, it would be imprudent to disregard the new Guides.