Companies that make environmental or "green" claims generally refer to the FTC's Green Guides for guidance on what they can and cannot say and what substantiation they need. At this point, though, the Green Guides are more than ten years old and they don't clearly answer many of the questions advertisers have today. Although the FTC has indicated that it plans to review and update the Green Guides, we don't know when a new version will be out.
In the meantime, the World Federation of Advertisers – with the help from the International Council for Advertising Self-Regulation, the European Advertising Standards Alliance, and experts from the UK's Advertising Standards Authority – recently issued Global Guidance on Environmental Claims. The Guidance is centered around six key principles, many of which are illustrated with case studies from various countries.
Here's a summary:
- Claims must not be likely to mislead, and the basis for them must be clear.
Ads must not "include misleading claims, imply anything inaccurate, or exaggerate, and marketers must hold substantiation for claims as they are likely to be understood by the audience." Among other things, the WFA cautions advertisers to avoid broad, unqualified claims, such as "environmentally friendly," "sustainable," or "green."
- Marketers must hold robust evidence for all claims likely to be regarded as objective and capable of substantiation.
Advertisers must have reliable substantiation for all express and implied claims. Although what type of substantiation is required will depend on the claim, the WFA encourages marketers to use independent assessments, which are "likely to be more robust." When making aspirational claims, advertisers must be able to demonstrate that they have a reasonable capacity and methodological approach to achieve their goals in the specified timeframe. (Aspirational claims have received a lot of attention at the NAD recently. Click here for one example, which was also noted by WFA.)
- Marketing communications must not omit material information. Where time or space is limited, marketers must use alternative means to make qualifying information readily accessible to the audience and indicate where it can be accessed.
If an ad could be misleading without additional information, that information must generally be disclosed in a prominent manner and in close proximity to the relevant claim. For example if an advertiser states that a product is recyclable, but there are limitations to its recyclability, those limitations must be disclosed. If the necessary disclosures can't fit in the ad, advertisers should provide easy access to them, such as by ensuring that the information is one click away.
- Marketers must base general environmental benefit claims on the full lifecycle of their product or business, unless the marketing communication states otherwise, and must make clear the limits of the lifecycle.
Claims should not be unqualified unless an advertiser can substantiate that the claim applies to the entire lifecycle of the product. As an example, the AFA states that absolute claims like "environmentally friendly" can only be made "if the advertiser can demonstrate that the product's entire lifecycle has no detrimental effect on the environment." (That's a high bar.) If qualifications are necessary, they should be made in accordance with the third principle.
- Products compared in marketing communications must meet the same needs or be intended for the same purpose. The basis for comparisons must be clear, and allow the audience to make an informed decision about the products compared.
Claims should make clear to the audience what is being compared and how the comparison has been made. For example, if an advertiser claims that a product uses "50% less plastic," it should include "information about which parts of a product this applies to, and whether the comparison is against the advertiser's previous product, a competitor's product or other similar products on the market." For more on this topic, read our post about apples-to-oranges comparisons.
- Marketers must include all information relating to the environmental impact of advertised products that is required by law, regulators or Codes to which they are signatories.
Advertisers should comply with all applicable laws and with other commitments that they have made.
Although the updated Green Guides will undoubtedly include a lot more specificity on these points, the WFA's guidance includes some helpful tips and reminders. As we've noted in previous posts, green claims have been getting a lot of attention at the NAD, from regulators, and from plaintiffs' attorneys. We expect that this type of attention will likely increase throughout the year.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
