As FTC Revisits 'Green' Definitions, Some Predict A Crackdown

greenworksThe Federal Trade Commission, which last revisited its "Green Guides" back in 1998 before anyone ever heard of a carbon footprint, is holding workshops as part of its regulatory review, and some experts are predicting that could make life more difficult for marketers.

The FTC's next workshop is Wednesday and is intended to "examine developments in green packaging claims and the consumer perception of such claims." Back in January, another workshop addressed the marketing of carbon offsets and renewable energy certificates.

If these workshops lead to revised guidelines, which would make plenty of consumer groups happy, "it could have a chilling effect on an advertiser's ability to communicate important and valuable information to consumers," writes Ronald R. Urbach, a partner at Davis & Gilbert, and a leading legal expert on advertising and marketing, in a recent filing on behalf of the nation's largest and most influential advertising trade organizations (AAAA, AAF, and ANA).



The FTC says consumers are grappling with a sharp increase in new terminology. "Since the Green Guides were last revised in 1998, there has been a significant increase in the use of environmental claims in product marketing, including "green" claims concerning product packaging. Sellers and marketers frequently use terms addressed in the Green Guides, such as "recyclable," "recycled content," "biodegradable," "degradable," "compostable," or "refillable," to claim that their packaging is green," the FTC says. "Sellers and marketers also are now using green claims that are not currently addressed in the Green Guides, including terms such as "sustainable" and "renewable." The FTC says that the sharp increase in environmental seals issued by third parties also raise issues of "perception and substantiation."

And clearly, consumers are confused. A recent study from Cone LLC and the Boston College Center for Corporate Citizenship found that almost half (48%) think that "green" products are actually beneficial for the earth, while a distinctly smaller group--22%--understands that such purchases are simply less harmful than competing products. Some 76% in that survey think environmental claims should be regulated by the government. And in a study from Burt's Bees, 78% of people think that natural personal care products are regulated, and 97% of people think they should be.

Urbach says he expects that over the next four months the FTC will find a number of cases of false or misleading packaging. "It's one way to remind companies that they are on guard," he says.

But he's hoping there won't be new guidelines. Environmental terminology and claims are changing so rapidly that the FTC "might be shooting at a target that doesn't exist," he says. If they do issue new guidelines, "my concern is that they be very measured, so they don't squelch development among marketers," and instead rely on existing laws to police deceptive or misleading claims. One concern, he says, is that the perception of what's good or bad for the environment is becoming increasingly complex. And as consumers' interest in such claims grows, that won't change any time soon--a big difference in the green movement of the early 1990s, which faded fast. "There really has been a shift in consumer attitude and sensitivity," he says. "People understand that there is a significant problem with climate change, especially younger people." And unlike the green of the early 1990s, "in this round, environmental issues and economic issues are much more closely aligned," he says. The question has become less about whether people will pay more for a green product, and more about the green products that can save them money, such as CFL light bulbs or hybrid cars.

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