Under a new set of revisions to the FTC’s “Green Guides,” companies will have to take greater responsibility for their environmental claims, but will these stricter guidelines put an end to misleading green marketing?

An increasing number of companies claim that their products provide environmental benefits, but many of these assertions may be exaggerated or false — a practice known as “greenwashing.” After nearly three years of research, several public hearings and thousands of stakeholder comments, the United States Federal Trade Commission (FTC) recently unveiled a new set of revisions to the rules governing environmental marketing in an effort to curb greenwashing.

The original Guides for the Use of Environmental Marketing Claims, or “green guides,” included certain loopholes that allowed some companies to make unwarranted or misleading claims about their product’s effect on the environment. The FTC’s proposed revisions, released last week, clarify what marketers should and should not do when describing a product’s environmental features.

“In recent years, businesses have increasingly used ‘green’ marketing to capture consumers’ attention and move Americans toward a more environmentally friendly future. But what companies think green claims mean and what consumers really understand are sometimes two different things,” FTC Chairman Jon Leibowitz, said in an announcement of the revisions. “The proposed updates to the Green Guides will help businesses better align their product claims with consumer expectations.”

Under the current rules, companies are permitted to make unqualified environmental claims about a product as long as they can substantiate specific implied or express claims. However, one of the major new revisions, cited in a summary of the changes, would remove this allowance: “Marketers should not make unqualified general environmental benefit claims. They are difficult, if not impossible, to substantiate.”

Another key change is that qualifications must now be “clear and prominent, and should limit the claim to a specific benefit. Marketers should ensure the advertisement’s context does not imply deceptive environmental claims.”

One of the main reasons for the new marketing guidelines is that FTC research shows many consumers misunderstand the meaning and scope of certain environmental claims. Clarifying the types of claims that are permissible under green guidelines may help dispel false assumptions about green products.

“FTC chose to advise against general environmental marketing because a consumer marketing study showed that consumers have scant understanding of what these claims actually mean,” the New York Times reports. “When presented with claims about a supposedly ‘green’ product, most people thought it was recyclable, biodegradable, made from recycled materials or made with renewable materials. Nearly half thought the marketing meant the product was nontoxic, compostable or made with renewable energy, the study found.”

Yet “[v]ery few products, if any, have all of the attributes consumers seem to perceive from such claims,” according to the FTC. “Therefore, these claims may be impossible to substantiate.”

Other important changes include: stricter rules for green certifications and seals of approval; a one-year time limit for how long it takes a product labeled “degradable” to decompose; a requirement for more specific information on how and why product materials are renewable; and a prohibition against claiming a product is made with renewable energy if manufacturing it or any of its parts requires the consumption of fossil fuels.

Use of the term “recyclable” is also likely to change, as the new guidelines state a product cannot be labeled universally recyclable if the necessary reclamation facilities aren’t widely available. A three-tiered analysis for disclosing the availability of recycling programs will be implemented to curb such misleading designations.

Many companies support the new measures, claiming they will improve corporate accountability and encourage closer engagement with the consumer base.

“We can expect that some people won’t follow them,” Cara Bondi, a senior research chemist at the cleaning and infant products company Seventh Generation Inc., told the Chicago Tribune. “But with transparency comes trust, and companies that will win are companies that are transparent.”

However, some critics of the revisions claim that they either go too far in restricting marketers from expressing their ideas in a free marketplace, while others believe the changes do not go far enough.

“Much to the chagrin of some green activists, the proposal doesn’t touch upon claims involving reduced or greener packaging and also don’t [sic.] attempt to define or suggest limitations on the terms ‘sustainable’ or ‘sustainability,’” Forbes.com’s On the Docket legal blog explains. On the other hand, “[w]henever government speaks out on how companies may promote their products, especially to this level of specificity, concerns of intrusions on commercial free speech rights must be considered.”

The FTC will be accepting comments on the new proposals through December 10, after which it will decide which changes will be finalized. Interested parties can submit their ideas HERE.

Earlier: Beware of Greenwashing: Avoid Eco-Hype

Resources

Proposed Revision to the Green Guides
Federal Trade Commission, Oct. 6, 2010

Federal Trade Commission Proposes Revised “Green Guides”
Federal Trade Commission, Oct. 6, 2010

Green Guides: Summary of Proposal
Federal Trade Commission, Oct. 6, 2010

FTC Proposes Crackdown on “Greenwashing”
by Gabriel Nelson and Amanda Peterka
The New York Times, Oct. 6, 2010

FTC: General Green Claims Don’t Wash
by Mary Ellen Podmolik
The Chicago Tribune, Oct. 7, 2010

Will FTC Marketing Guidelines Make it Any Easier for Advertising to be “Green”?
by Rich Samp
On the Docket (Forbes.com), Oct. 8, 2010