July 14, 2009

The Federal Trade Commission (FTC), as part of its review of existing Green Guides and with an eye toward amendment of those guidelines, is undertaking a study of consumer perception of environmental marketing claims. The FTC has a long-standing concern with so-called “greenwashing,” which involves a myriad of deceptive trade practices in the labeling or advertising of products as environmentally friendly. The FTC’s Green Guides are found at 15 C.F.R. 260. Many countries (particularly in Europe) are actively pursuing greenwashing claims and these are likely to become more prevalent in the U.S. as the green issue moves to the forefront of public and governmental consciousness.

The FTC Green Guides were issued in 1992 and were first modified in 1996 and again in 1998. Revised guidelines are expected later this year. The Guides are designed to help marketers avoid unfair or deceptive claims about the environmental properties of their products/processes. While the Guides do not have the force and effect of law and are not independently enforceable, the FTC can take action if a business or manufacturer makes an environmental claim that is inconsistent with the Guides. The Guides cover issues such as the general environmental benefits of a product/process (i.e., “environmentally friendly”) and claims that products are degradable, compostable, or recyclable; have recycled content; are refillable; are ozone-safe/-friendly; or involve source reductions. Not currently covered by the Guides, but the subject of possible future inclusion, are environmental claims related to carbon neutrality, sustainability, and renewability. The Guides describe the elements necessary to substantiate claims and present options for qualifying specific claims to avoid deceptive marketing claims or practices.

The FTC is soliciting public comments in anticipation of undertaking the above study, which may lead to further amendments to the Guides. Comments are due by June 11, 2009, and can be made electronically at http://www.ftc.gov/os/publiccomments.shtm. All comments will be made available to the general public. No trade secret or proprietary information should be included in the public comments.

The primary focus of the study will be to determine consumer understanding of certain environmental marketing claims (i.e., “green,” “eco-friendly,” “made from recycled materials”) and the perception of consumers regarding products or processes, bearing such characterizations. The study will further examine whether consumers believe that a product bearing one of the environmental claims has other environmentally friendly characteristics or carries such characteristics through all phases of the product’s life (manufacturing process, use of product, disposal of product).

The call for increased attention to greenwashing and for guidance in what is deceptive has been especially felt in the area of “green” construction. It is anticipated that green buildings will account for an increasingly greater share of the residential and commercial construction market over the next few years. The FTC is currently looking at the need for further guidelines in the textile and construction areas, and it recently met with green building executives, where FTC representatives posed tough questions about their marketing claims. The lack of a common lexicon and standards (other than those that meet the somewhat-rigorous Leadership in Energy and Environmental Design [LEED] standards) was addressed at this meeting and will likely be addressed in future amendments to the Guides.

Further information is also available at the FTC’s website.

If you would like more information about the topics covered in this Alert, please contact your Nixon Peabody attorney or:

• Carolyn S. Kaplan, Esq. at 617-345-1345 or [email protected]
• Jason C. Kravitz at 617-345-1318 or [email protected]
• Laurie Styka Bloom at 716-853-8102 or [email protected]
• Steven B. Feirman at 202-585-8395 or [email protected]
• Christopher M. Mason at 212- 940-3017 or [email protected]