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FTC: Be careful with green marketing promises

FTC: Be careful with green marketing promises

Posting in Energy

Citing a disconnect between consumers and marketers, the FTC is proposing guidelines that would affect what companies should say about eco-friendly products and services.

Earlier this year, the Securities and Exchange Commission moved to require companies to disclose risks or challenges related to the environment in their regular shareholder filings. The theory being that anything that threatened long-term sustainability was something they should know about. Now, another government agency, the Federal Trade Commission, wants to mess with what you can say about "green products or services."

The FTC has proposed an update to a 18-year-old document (yes, 18 years!) document called the FTC Green Guides. The guides contain "advice" that are supposed to help marketers and advertisers frame what they are saying about a product or services environmental impact. In issuing the new guidelines, the commission said:

"In recent years, businesses have increasingly used 'green' marketing to capture consumers' attention and move Americans toward a more environmentally friendly future. But what companies think green claims mean and what consumers really understand are sometimes two different things. The proposed updates to the Green Guides will help businesses better align their product claims with consumer expectations."

Yes, we all know that greenwashing is not a good thing, and we scoff against it. What the FTC is after, though, are all those "green" certifications that are starting to show up on products. One example, actually a really thoughtful example, is the Timberland Green Index, which could be the basis of a broader label among companies that make outdoor equipment and apparel.

The FTC wants labels of this type to be "clear, prominent and specific." Personally speaking, I think the Timberland example meets that test, which is one reason it is moving toward industry-wide adoption. But I can assure you that a lot of other certifications absolutely do not. I know because I do the grocery shopping in my household, and I've been looking. The technology world, in particular, has a LOT of these things. You can find them in the Global Eco-Label guide. My guess is that the FTC rule will have the affect of pushing many of these company-specific labels into a realm that is my industry-focused. In this case, fewer and clearer would definitely be a good thing.

As the new guidelines evolve, look for the FTC to expect your marketing team to become much more explicit about what it means if "renewable" materials or "renewable energy" are reasons that your product or service should be deemed green. Are you REALLY using renewable energy in your factories or did you just send someone off to buy some offsets. If your product is "degradable," it should decompose in less than a year. Does it? What the heck does "carbon-neutral" mean anyway? I don't even want to think about what will happen when companies start touting the green-ness of their supply chains. I will admit that I had to look up what "Scope 3" emissions meant recently, and I write about this stuff. You can bet that my mother-in-law hasn't a clue.

By the way, the FTC says its guidelines won't address anything that is marketed as "sustainable," "natural" or or "organic." The latter term is covered, in part, by the U.S. Department of Agriculture's National Organic Program.

The FTC is accepting public comment about the new guidelines until Dec. 10, 2010.

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Heather Clancy

Section Editor

Heather Clancy has written for United Press International, ZDNet, Entrepreneur, Fortune Small Business, the International Herald Tribune and the New York Times. She holds a degree from McGill University. She is based in New Jersey. Follow her on Twitter. Disclosure