It may seem like every beauty and wellness brand on the market is touting an environmental or sustainability credential. But what are the standards for making these claims? And what protections are there for shoppers against misleading claims?
To answer this, we’ve provided an overview of one of the main regulatory efforts in the United States targeting green marketing claims: the FTC Green Guides. (To learn more about parallel efforts in the UK, click here.)
What is the FTC?
The US Federal Trade Commision (FTC) is a consumer protection agency responsible for protecting the public from deceptive or unfair business practices.
[fs-toc-h2] What Does the FTC Do?
As part of these efforts, the FTC issues the “Guides for the Use of Environmental Marketing Claims” (known as the Green Guides). The FTC designed the Green Guides to help marketers ensure that claims about the environmental attributes of products are accurate and true.
“The introduction of environmentally friendly products into the marketplace is a win for consumers who want to purchase greener products and producers who want to sell them,” says FTC Chairman Jon Leibowitz. “But this win-win can only occur if marketers’ claims are truthful and substantiated.”
[fs-toc-h2] FTC Green Marketing Guidelines: The Green Guides
The Green Guides outline general principles that apply to all environmental marketing claims, as well as more specific guidance on certain types of claims (such as recyclability and carbon offsets). They also provide guidance on how shoppers are likely to understand claims made by brands and how marketers can substantiate and qualify claims to avoid deceiving shoppers.
FTC Green Guides Summary
Under the Green Guides, the following general principles apply to all environmental marketing claims:
- Conditions and caveats should be clear, prominent, and understandable.
- Claims should specify whether they refer to the product, the product’s packaging or just to a portion of the product or packaging.
- Claims should not overstate, directly or indirectly, an environmental attribute or benefit.
- Claims should be substantiated.
- Comparative claims should be clear to avoid consumer confusion. For example, a brand should avoid claims like “20% more recycled content” in favor of clear comparisons like “20% more recycled content than our previous packaging.”
Many of these general principles are similar to those issued by the UK Competition and Markets Authority in the Green Claims Code.
Beyond general principles, the Green Guides also address specific areas of green marketing claims. For example, the Green Guides discuss the following areas:
- Carbon Offsets. Given the complexities of carbon offsetting, brands should use reliable scientific and accounting methods to properly quantify claimed emissions reductions.
- Free-Of Claims. A truthful “free-of” (or Free-from) claim may still be deceptive if the product contains or uses substances that pose the same or similar environmental risks as the “free-of” substance, or the “free-of” substance has not been associated with the product category.
- Recyclable Claims. A product’s packaging should not be marketed as recyclable unless it can be collected, separated, or otherwise recovered from the waste stream through an established recycling program. Brands can make recyclable claims when recycling facilities are available to at least 60% of the shoppers or communities where the item is sold. If recycling facilities are not widely available, the brand should include qualifying language (for example, “This product may not be recyclable in your area.”)
- Refillable Claims. A brand should not make a refillable claim unless they also provide the means for refilling the product. To do this, a brand may either provide a system for the collection and refill of the product, or offer for sale a product that shoppers can purchase to refill the original product.
The Green Guides also provide in-depth information on claims related to compostability, degradability, recycled content, renewable energy, renewable materials, and source reduction.
[fs-toc-h2] FTC Green Guides Enforcement
So what’s at stake for brands that don’t meet the Green Guides standards when marketing their products in the United States? Under the FTC Act, the FTC can take an enforcement action against brands making deceptive claims, which could result in advertising prohibitions and fines. The FTC has already cracked down on a number of deceptive green claims related to recyclability, materials, and environmental certifications:
Truly Organic’s not-so-organic enforcement action
Beauty retailer Truly Organic made waves over an FTC enforcement case resulting in a million-dollar penalty based on misleading green marketing claims.
The FTC found that Truly Organic’s bath and beauty products were neither “100% organic” nor “certified organic” as the company had claimed. In fact, their products contained ingredients that were not certified organic, as well as ingredients that are not allowed in organic certified products, and were not certified organic by the US Department of Agriculture. To settle these claims, Truly Organic and its CEO paid a whopping $1.76 million fine.
California Naturel and the limits of “all natural” claims
California Naturel, a California-based skincare company, also faced trouble from the FTC over claims that its sunscreen was “all natural” and contained “only the purest, most luxurious and effective ingredients found in nature.”
The FTC flagged that California Naturel’s sunscreen contained eight percent dimethicone, a synthetic ingredient, making the “all natural” claims false and misleading. As a result, the FTC prohibited California Naturel from misrepresenting the ingredients of its products, including whether the products were “all natural”.
[fs-toc-h2] FTC Green Guides 2022 Update
The Green Guides have undergone a number of revisions since they were first issued in 1992 and more changes are on the way. As part of a 10-year review, the FTC recently announced that it will be initiating a 2022 update of the Green Guides. This process will include asking for feedback from the public, which the FTC will consider as part of the review – previous Green Guides updates saw hundreds of stakeholders weighing in during the public comment period.
Considering the current attention being paid to greenwashing and the substantiation of environmental marketing claims, expect to see stakeholders ranging from brands to environmental NGOs weighing in.
[fs-toc-h2] What Can Brands Learn from the FTC Green Guides?
Complying with the Green Guides is all about how a brand presents and substantiates green marketing claims. Qualifications for any claim should be clear, prominent, and specific. Brands should not make broad environmental benefit claims like ‘green’ or ‘eco-friendly’ because, according to the FTC, such broad claims are difficult to substantiate, if not impossible. In addition, for environmental marketing claims, a reasonable basis often requires competent and reliable scientific evidence. It is critical, therefore, to have a solid basis to support and substantiate any green marketing claim.
To learn more about how Provenance can help you make credible, consistent, and comprehensive environmental claims, click here.