Green Light Distrikt is about entrepreneurship focused on the cleantech sector. GLD U provides cleantech courses . Edited by Chris Williams with frequent guest posts from friends, experts and industry insiders from clusters across the globe. Our goal is to provide a place where cleantech entrepreneurs in various clusters across the globe can learn from one another. Green Light Distrikt is creating the "Hitchikers Guide to Clentech" to provide a resource for cleantech entrepreneurs. Read more
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July 27th, 2010
So last month I spouted off about labels on food and the enforcement behind them. The topic is a confusing once since there is very little regulation, which leads to consumer confusion. There are however, guidelines with the FTC that prevent green washing in marketing under the banner of Truth in Advertising. Unfortunately most businesses have very little knowledge of these guidelines, due to their lack of enforcement, and therefore even the most sustainably-minded companies are often guilty of green washing. But the Obama administration has stated that enforcement of these guidelines is a priority going forward, so consumers are about to get some clarity!
To check out the green guides for yourself you can read them at the FTC website. Or you can keep reading for a snarky summary.
The Green guides apply to all environmental claims that are included in any kind of marketing, whether directly or by implication. So a company needs to take the guidelines into account for every aspect of their marketing including labeling, advertising, promotional materials and any marketing through words, symbols, emblems, logos, depictions, product brand names, digital advertising, attributes of the products themselves, as well as the packaging, or services (if you are a services company). The rules are actually pretty expansive. If you even so much as place a leaf in your logo (see mine) , you better know the implications.
These guidelines are not definitive rules on how to do things. Other approaches are permissible, but the guides are meant to be a safe-harbor for businesses/marketers. If you followed them and your marketing was still green washing, then no harm no foul, just change your marketing to correct the error.
So the basic requirements are these:
- You have to be clear.
- Draw a distinction between the benefits of the product, package or service
- No exaggerations about environmental benefits.
- Explain comparisons, don’t leave us hanging (20% more than what?)
If you are making qualifications or disclaimers, they need to be understandable. The customer needs to know what you are qualifying or disclaiming. What is more relevant however, is knowing when you need a qualifier or disclaimer. You need to be clear about what the claim is referring too. Is it the product, the product’s packaging, a service, or just a portion or component of the product or service? If you market something as recyclable, is every part of it including the packaging recyclable?
The Guides give more specific examples of how these principles are implemented, especially when it comes to the use of certain words. General claims whether intentional or not can be deceptive and misleading, including the company name. If your name is “Green Fuel” and you own some oil platforms……… (doesn’t matter that your last name is Green). I wonder if French’s mustard is misleading. It certainly isn’t French. Perhaps the apostrophe solves that problem.
- Degradability, biodegradability, or photodegradability should be qualified (explained) in two ways: 1. the product or packages ability to degrade in the environment where it is customarily disposed and 2. the rate and extent of degradation.
- Compostable. Two things to consider: 1. can the package or product be safely composted in a home compost pile or device; 2. does the claim mislead consumers about the environmental benefit provided when the product is disposed of in a landfill. If it is only compostable at the local municipality composter, then say that. You also have to include a disclaimer that municipal facilities may not exist. Also, how safe is the resulting compost? If it decomposes but leaves behind toxic chemicals, you have violated the rules because composting (in the mind of the consumer) is usually an environmental benefit and can be used for other purposes.
- Recyclable. Pretty much the same as above. It has to be recyclable, and accepted by recycling programs. If because of size, shape, or any other reason, centers won’t take it, then you have misled the consumer, despite the fact that you did not technically lie. You also need a disclaimer about the limited access to recycling facilities. You have to tell people that they may not have recycling available in their area. When was the last time you saw that on packaging? Hmmm……
- Recycled content. Is it pre or post consumer (you don’t have to disclose that) but if it is pre, the marketer has to have solid evidence that the content would have otherwise entered the solid waste stream. The material has to have been recovered; it cannot be recycled raw materials.
- Source reduction claims should be qualified. If weight, volume, or toxicity have been reduced, by how much and compared to what?
- Refillable. Need to have a collection or refill program set up. If it is up to the consumer to be creative, get rid of the claim.
- Ozone Safe and Ozone Friendly. Good Luck!
Obviously some big ticket items are missing, like carbon neutral, carbon recapture, carbon credits, etc. The Ozone layer was the big concern/buzz words when these guides were initially drafted. We now use a very different language to describe eco-benefits. The FTC is currently reviewing these standards and will be issuing further guidance. So stay tuned on the language we are actually using.
Main thing to remember:
When making any express or implied assertion or claim about the environmental attribute of a product or service, at the time the assertion was made, the marketer must have possessed and relied upon a reasonable basis (competent and reliable evidence) substantiating that assertion.
The “reasonable basis” is generally held to mean that there is reliable scientific evidence in the form of tests, analyses, research, studies, or other evidence based on the expertise of objective professionals in the relevant area.
The Green Guides are not actually enforceable regulations. Compliance is completely voluntary. These guides are an administrative interpretation of the laws administered by the FTC. The real teeth are with Section 5 of the FTC Act. Section 5 prohibits deceptive acts and practices in or affecting commerce. So the only way the guides are enforced is that non-compliance may mean that you are failing to satisfy the rules in Section 5 of the FTC Act and the FTC can take corrective action there.
“Deceptive” is determined by three factors:
- There must be a representation, omission or practice that is likely to mislead the consumer
- Likelihood of misleading based on Reasonable person standard/Reasonable Group Standard.
- The misleading representation, omission or practice was material
The reasonable person standard/group standard looks at who the marketing is intended for, whether that is an individual, a sub-culture, or a definable group and determines how they would reasonably interpret the representation. Materiality is present if the misleading claim is likely to affect the consumer’s conduct or decision regarding the product or service. Omissions are included. If you neglect to say something material, it is deceptive.
So having read all that (sure you did), what do you think? Green Marketing or Green Washing?
* Picture taken from the “Greenwash Guide” by Futerra Sustainability Communications.
Tune in for my next blog post. I will go over the current cases brought by the FTC and how companies have gotten into trouble. I will also let you know how international transactions are being effected (Europe way harsher than the US thank god) and I’ll give you a heads up on what is heading our way.
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