“Greenwashing” Gets an FTC Clean Up

The Federal Trade Commission (FTC) has been mighty busy lately. WholeFoods reports in this issue about their legal square-offs against companies like POM Wonderful over contentious marketing claims. The agency is also finding time to set its sights on all the “greenwashers” out there in marketing land. “Greenwashing” is a term some use to describe marketing efforts that exploit the eco-friendly trend, even when the product being marketed may not be so eco-friendly.

FTC’s newly proposed advisory guidelines for eco-friendly marketing could shake up the natural products marketing landscape. The “Green Guides,” issued in 1992 and last updated in 1998, are a set of proposals about how marketers should approach “green” marketing for products of all kinds. The stated aim is to aid marketers in avoiding “unfair or deceptive” environmental claims as outlined by section five of the FTC Act. These latest revisions come in the form of a well-over 200-page document, which FTC has also condensed into a two-page summary. A period of public comment on the revisions was to last until December 10, after which time, FTC will finalize certain of the proposed changes.

Some of the main points of emphasis include a directive for marketers to steer clear of vague, “greenwashing” blanket statements. To avoid this, the FTC wants fewer buzzwords and more detail. It advises against using terms like “environmentally friendly” and “eco-friendly” in product marketing and labeling. FTC says claims like these are “nearly impossible to substantiate,” reflecting skepticism that many products labeled as such are not in fact eco-friendly, or otherwise do not present the benefits to the environment that these labels suggest.

This is a major change from the previous Guides for the Use of Environmental Marketing Claims, the Green Guides official title. Until now, general, unqualified claims like the ones above were permitted as long as they were accurate. Now, marketers are being asked to steer clear because they are just too hard to verify, according to FTC. Companies who use these terms will run the risk of FTC enforcement action.
Dara O’Rourke, founder of the consumer review website GoodGuide and an associate professor at UC Berkeley, says there are some curious omissions in the proposal. “There is no proposed regulation of the words ‘sustainable,’ ‘green,’ or ‘natural.’ And yet the FTC argues that terms like “sustainable” are so meaningless to consumers to begin with that they aren’t confused into thinking products are environmentally sound when they see ‘sustainable’ in marketing materials.” O’Rourke does think there will be a net benefit, however, stating, “Ultimately, I think this will help consumers. Transparency, and a level playing field in what firms can and cannot say, should help the best firms and products win in the marketplace.”
The new Green Guides revisions contain directives on the proper use of product certifications, seals of approval and renewable energy, materials and carbon offset claims. For instance, they warn that it is considered a deceptive practice to promote the purchase of carbon offsets on packaging, if these emissions reductions were already required by law. Renewable energy claims should be accompanied by the particular type of renewable energy being referred to. The overall trend in the existing guides as well as these revisions is to emphasize specifics over generalities, transparency over vagueness.

Those with opinions on the matter are being encouraged to speak up. FTC has said it wants to know if people think consumers are interpreting general environmental claims like “eco-friendly” to mean that a product has a net benefit on the environment, among other major questions. Comments can be registered until December 10 at www.ftc.gov/green, where the summary of the revisions is also available.


Published in WholeFoods Magazine, December 2010 (online 10/27/2010)