On April 24, ACA submitted comments to the U.S. Federal Trade Commission (FTC), in response to the commission’s request for feedback on updating the Guides for the Use of Environmental Marketing Claims (“Green Guides”). The Green Guides provide guidance to businesses that want to use environmental marketing claims in their advertising and labeling, and aim to help businesses avoid deceptive or misleading environmental claims in violation of section 5 of the FTCA (Federal Trade Commission Act). The Guides assist businesses in determining how consumers are likely to interpret specific claims and how to substantiate environmental claims made about their products or services.
The Green Guides were last updated in 2012. The FTC’s general practice is to review its rules and guides at least once every 10 years. The agency sought comments about the efficiency, costs, benefits, regulatory impact, consumer perception, etc., of the Green Guides, to determine whether to retain, modify, or rescind the guides, related to several topic areas including sustainability, recyclability, and ozone related statements.
Issued in 1992 and revised in 1996, 1998, and 2012, the Green Guides reflect a mix of the legal and the practical. They are not stand-alone federal regulations, but according to FTC, offer guidance to, “explain the FTC’s thinking about how the FTC Act’s prohibition on unfair or deceptive practices applies to the kind of environmental claims consumers are likely to encounter in the marketplace,” while focusing on consumer perception of environmental marketing claims. The Green Guides also include several hypotheticals that address the real-world situations companies face when trying to craft green claims, providing general guidance about how to substantiate those claims to minimize the potential for deception.
In 2012, FTC declined to issue guidance on “organic” claims for non-agricultural products and determined it did not have enough evidence about consumer perception to offer guidance about “sustainable” claims. However, FTC is now considering revisiting those determinations.
ACA’s comments expressed support for FTC’s existing approach of offering general parameters about novel issues without being overly prescriptive, as well as support for FTC’s prior establishment of the Green Guides as non-binding administrative guidance, not rising to the level of a regulatory obligation, as described in 16 CFR 260.1.
“ACA strongly recommends that FTC maintain the Guides as a reference used to interpret Section 5 of the FTC Act without expanding FTC’s enforcement authority through policies or revisions to the Green Guide,” as stated in ACA comments. “ACA similarly encourages FTC to pursue voluntary approaches when addressing a claim that may violate Section 5 of the Act. This approach is most suited to establishing FTC’s authority over environmental claims due to the broad and frequently changing set of considerations to make such claims. Companies require flexibility to respond to changes in consumer understanding and technology advancements without static criteria set in regulation or established by aggressive enforcement.”
Specifically, ACA urged FTC to provide updated guidance on product sustainability claims, underscoring that concepts of durability and product lifespan may in fact serve as critical components of sustainability as an “environmental” claim.
“Simply put, a durable, longer-lived product will require less repair or replacement over an alternative product with a shorter lifespan. All else equal, the reduced amount of waste and energy and raw material consumption associated with the use of longer lifespan products is a clear environmental benefit which may be quantified through life cycle assessments or other reliable measures of environmental impact.” To support this, ACA suggest broad definitions for durability as they relate to permanency and product lifespan.
Additionally, ACA urged FTC Green Guides to offer guidance recognizing variety in science assessing lifecycle, consumer understanding and related comparative claims. A life-cycle assessment (LCA) may evaluate a product’s environmental impact from the product’s creation, manufacturing, use, and disposal (also referred to as cradle to grave).
“Claims relying on comparative product life-cycle assessments can also lead to potential confusion with consumers and wide variances in substantiation of related marketing statements. As a point of reference, international standards exist to guide companies performing an LCA.”
ACA noted that LCA claims that are not based on industry-wide studies should follow relevant international standards and provide information on the supporting reference standards, data and boundaries of the LCA study to enable transparency.
Contact ACA’s Riaz Zaman for more information.