Changing Horizons: FTC's Updated Green Guides Alter The Eco Marketing Landscape
In the aftermath of Hurricane Sandy, there's been much talk about "reducing your carbon footprint" and "making sustainable choices," as these and other such phrases have been whipping around the airwaves. Climate change and the role of people in exacerbating it, commentators say, can no longer be denied regardless of which side of the political fence your on. Bloomberg Businessweek even went so far to say, "It's Global Warming, Stupid."
Whether you want to believe it or not, the weather impacts the ability for business to get done. One look at PPAI's Facebook page during the storm illustrated just how disruptive Sandy was to industry firms, as status update after status update included details on companies being closed. And that's not to mention all the property damage and loss these folks experienced personally and professionally as a result.
Unfortunately, it appears that Mother Nature has more in store. Last month, Munich Re, a German reinsurance company, published Severe Weather in North America, a report that found the number of weather-related loss events have nearly quintupled in the last three decades—to a total of $1.06 trillion in losses caused by natural catastrophes. Now more than ever it's imperative to be a good steward of the environment.
Most agree that being environmentally conscious is the right thing to do. But as a famous frog once said, "It's not that easy being green." There's a lot of "eco" products on the market, but what does "green" really mean? Is it "post-consumer waste content?" Is it "sustainable?" Is it "recyclable?" Or simply "eco-friendly?"
"Green" and its associated vocabulary, according to the Federal Trade Commission (FTC), are manufacturer claims—claims that can be regulated under the FTC's mandate to not only prevent fraudulent, deceptive and unfair business practices but to also provide information to help spot, stop and avoid them.
To facilitate this process, the FTC began publishing Green Guides in 1992, with the latest updates released last month. The updates incorporate information gathered in workshops, a study of how consumers perceive and understand environmental claims, and more than 300 comments on the proposed updates. New sections were also added to address concepts not previously captured—and, in some cases, conceived of!
What's Different In The Update?
At 36 pages in length, the Guides For The Use Of Environmental Marketing Claims is certainly detailed, but its overall direction can be summarized as follows:
"Unqualified general environmental benefit claims are difficult to interpret and likely convey a wide range of meanings," the guidance states. "Because it is highly unlikely that marketers can substantiate all reasonable interpretations of these claims, marketers should not make unqualified general environmental benefit claims." The Guides recommend against using terms such as "environmentally friendly," "eco-friendly" or "Earth smart" because these claims are vague and difficult to substantiate.
If you think those recommendations are restrictive, check out Jacquelyn Ottman's interpretation of the updated Guides in her latest Huffington Post column. She writes, "There's no such thing as a green product. Every product uses resources and energy and creates waste."
If there truly are no green products, then what are business owners to do if they have a line—or an entire company—dedicated to serving customers who want environmentally conscious merchandise? It comes down to being able to back up the claims you make.
Take "biodegradable" for example. Unless you can prove that the entire product or package will completely break down and return to nature within one year of disposal, products cannot be promoted as degradable. Similarly, products that are recycled that cannot be demonstrated to fully degrade within a year should not be marketed as degradable. Sounds simple, but the standard makes a distinction between "qualified" and "unqualified" claims. There is debate on the subject, as the Plastics Environmental Council has taken issue with the methodology for evaluating biodegradability and the definition of "qualified" claims (see this article from Environmental Leader for the specifics), so there will likely be more discussion to come.
This issue of degradability is just one of the topics covered. The Guides also clarify definitions for "compostable," "ozone," "recyclable," "recycled content" and "source reduction" claims.
What's New In The Update?
The Guides contain new sections on the use of carbon offsets, "green" certifications and seals, and renewable energy and renewable materials claims.
Certifications and seals of approval may be considered endorsements, according to the FTC. As such, the FTC recommends avoiding the use of environmental certifications or seals that don't clearly convey the basis for the certification because such seals or certifications are likely to convey general environmental benefits.
The FTC further discourages the use of seals or certifications that do not "materially" relate to the attributes of the product. This means images of a "leaf," "baby," "planet" or "daisies" that are commonly used to imply some added benefit is no longer valid unless there is scientific proof to validate the claim.
What's On The Horizon?
Like other regulators, the FTC shares and has overlapping authority with other agencies on many topics. So keep in mind that The Green Guides are not intended to contradict rules or guidance of those other agencies.
Notably, this update to the Guides does not address use of the terms "sustainable," "natural" and "organic," as these fall into the purview of other organizations. For example, the U.S. Department of Agriculture's National Organic Program covers organic claims made for textiles and other products derived from agricultural products.
Additional agencies with shared authority in this area include the Food and Drug Administration, the Consumer Product Safety Commission, the Environmental Protection Agency, the EPA's Design for the Environment Program and various state-level Health Departments. A compliance expert can work with you to identify the specific organizations regulating claims related to your product line.
What Do You Need To Know About Marketing Your Green Products?
The new FTC Green Guides make it clear that there are shades of "green." Yet they have also made it clear that unsubstantiated claims must stop and have instituted financial penalties for those who don't comply. The bottom line is that you must be able to prove what you say—proof that comes in the form of independent, third-party testing.
But beyond testing, true environmental stewardship comes from having the management practices in place that improve the efficiency of your business and/or the performance of the product. It's about strategies rather than labeling. Sourcing closer to market saves on fuel and emissions. Bigger orders reduce the number of overall shipments. Smarter packaging uses fewer raw materials and weighs less. And all of these save money.
While having to substantiate claims will certainly be viewed by some as a painful process, the result will be more relevant, targeted and credible marketing messages. We need a better vocabulary to accurately describe product attributes and the processes required in their manufacture. Once we can do this, the term "green" will be rendered irrelevant and insufficient, certainly for the customer who today is demanding "green" promotional product options.
There are consumers who have always been sensitive to environmental concerns, and their resolve to purchase products that align with their values continues to strengthen in light of Hurricane Sandy. As natural disasters grow in number and severity, this contingency will continue to build—and they are likely to seek assurances that their buying habits don't contribute to the environmental degradation. The companies that take the time to do their homework so they understand the complexity of the issue and subsequently make the investment to manufacture responsibly will reap the rewards in customer loyalty—and profits.
D E Fenton is executive director - compliance for Quality Certification Alliance (QCA), the promotional product industry's only independent, nonprofit organization dedicated to helping companies provide safe products. With more than 20 years of compliance experience, she offers practical advice and actionable tips that help make the complex concept of compliance easier to understand so companies can implement compliance into their daily business practices. She can be reached at firstname.lastname@example.org or visit www.qcalliance.org for more information.