First issued in 1992 and most recently updated in 2012, the FTC's "Green Guides" are a series of written guidance and recommendations to any company wishing to advertise about the environmental attributes of products and services. The Guides set forth "1) general principles that apply to all environmental marketing claims; 2) how consumers are likely to interpret particular claims and how marketers can substantiate these claims; and 3) how marketers can qualify their claims to avoid deceiving consumers." The FTC has applied the principles in the Guides in a variety of enforcement cases, and the Guides are very frequently cited and relied on by private litigants as well.
Last week, the Commission announced that it would be soliciting comments on potential updates to the Guides, beginning in mid-January 2023, for a 60-day period. Among the topics likely to attract comment are the following:
- Carbon Offsets and Climate Change: The current Guides provide guidance on carbon offset and renewable energy claims. Carbon claims are ubiquitous in the market and yet largely untested in court. Whatever the FTC might pronounce on the subject could be highly influential.
- The Term "Recyclable:" Among other things, the FTC seeks comments on whether it should change the current threshold that guides marketers on when they can make unqualified recyclable claims, as well as whether the Guides should address in more detail claims for products that are collected (picked up curbside) by recycling programs but not ultimately recycled. There have been a number of lawsuits challenging the claim of "recyclable" for packaged goods, despite those defendant brands having complied with existing FTC guidance. Changes to the current guidance could have major impacts.
- The Term "Recycled Content:" Comments are requested on whether unqualified claims about recycled content – particularly claims related to "pre-consumer" and "post-industrial" content – are widely understood by consumers, as well as whether alternative methods of substantiating recycled content claims may be appropriate. These claims are popular and yet remain riddled with uncertainty.
- The Need for Additional Guidance: The Commission also seeks comment on the need for additional guidance regarding claims such as "compostable," "degradable," ozone-friendly," "organic," and "sustainable, as well as those regarding energy use and energy efficiency. Of these, the term "sustainable," which is used broadly and in many contexts, has never been defined by the FTC. If the FTC chooses to define it now, this could have widespread ramifications for ESG advertising.
- Certifications. While the current Guides allow for reliance on certifications, they provide little help to consumers in determining good from bad certifications (weak vs. strong). The FTC could further articulate the criteria for meaningful and good third-party certifications in a way that strengthens market confidence.
The newly revised Guides could serve as a highly influential baseline for environmental marketing for the next decade, so it will be critical for affected parties to provide practical, actionable input to the process. In particular, will the FTC now call these guides the "ESG" Guides? Will the FTC comment on the "S" and "G" components of ESG, or will it stick to the "E"? Those affected by the FTC actions will include brands, agencies, certifiers, non-profits, activists, and the general public.
We invite you to get in touch with us if you have an interest in participating.
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