Sustainable marketing: How to follow the FTC’s Green Guides

November 9, 2021
Article

And avoid making misleading sustainability claims.

Sustainable marketing: Learn how to follow the FTC’s Green Guides

As a business practice, highlighting your product’s environmental benefits can differentiate you from competitors. But making false or misleading sustainability claims can have big consequences.  

Unlike “green” or “planet-friendly,” which don’t have universally-accepted definitions, terms like “compostable,” “recyclable,” and “non-toxic” all have specific meanings. Inaccurately using these and other terms is a form of greenwashing and, importantly, a breach of Federal Trade Commission (FTC) guidelines. Violate them, and you could face significant penalties and further scrutiny around future green claims, not to mention a tarnished reputation in the court of public opinion.  

So how do you know what you can and can’t say when making sustainable marketing claims? The FTC’s Green Guides outline the proper use of environmental claims, which protect consumer interests and make it easier for marketers to avoid legal headaches. The Green Guides can also help you set an honest and transparent sustainability marketing strategy.  

Let’s dive into the logic behind the guides and go deeper into the specifics behind each term when it comes to environmental marketing initiatives.  

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Guiding principles of the FTC’s Green Guides  

The general principle of the FTC’s Green Guides? Environmental marketing claims should be as specific and objectively verifiable as possible using clear, simple language that doesn’t confuse or mislead. That means including clear, prominent, and specific evidence—tests, analyses, research, or studies conducted objectively and by generally accepted third-party entities.    

To put it another way: If you promote your product’s environmental benefits, focus on verifiable claims, rather than broad, non-specific language. Give them context that could affect their purchasing decisions so they can understand the benefits relative to your competitors.  

The FTC monitors three categories of claims that correspond to a typical product lifecycle:

How a product or package is made  

Recycled content  

“Recycled content” is acceptable only when a product is made from materials recovered or otherwise diverted from the waste stream (e.g., landfill)—either during the manufacturing process (pre-consumer) or after consumer use (post-consumer). Products made from reconditioned or remanufactured components don’t qualify.  

Renewable energy  

Saying your product is made from “renewable energy” is acceptable when all, or virtually all, of the essential manufacturing processes are renewable energy-powered or if the non-renewable energy is matched with Renewable Energy Certificates (RECs). In other words, if fossil fuel—or electricity derived from fossil fuel—is used to manufacture or power any part of a product, don’t claim otherwise. Marketers should also specify the source and percentage of renewable energy that powered the process. For instance, if a clothing line is “made with wind power” but only 50% of the energy used is wind power, that claim is deceptive.

The same logic applies to claims about products made with renewable materials. Identify the material and explain why it’s renewable. “Made from plant-based materials” doesn’t quite cut it. Instead, “made from 50% plant-based, renewable materials,” is more legitimate. Assuming the claim is true, it qualifies the amount and source of renewable materials.  

Carbon offsets  

Emissions reduction claims that rely on carbon offsets must clearly outline the time period of the offset activity. When green marketing, you should use “competent and reliable scientific and accounting methods” to properly quantify claimed emissions reductions from carbon offsets. Disclose when those emissions reductions will occur—specifically if not for two years or longer.

In 2016, Energizer Brands filed a complaint with the FTC that accused battery maker LEI Electronics of making a litany of false environmental claims. LEI said its alkaline batteries were made of “80% recycled materials.” The catch: That 80% only applied to its product packaging. LEI agreed to discontinue many of its false claims. Still, it wouldn’t budge on its carbon neutral claim, which was called into question because LEI shared no reliable scientific evidence about when its requisite carbon reductions would occur.    

How to dispose of a product or package

Recyclable  

If you say an item is “recyclable,” it must be able to be collected, separated, or otherwise recovered from the waste stream for reuse or use in manufacturing or assembling something else. For example, suppose a package includes four layers of bonded materials, and a marketer claims the item is 25% recyclable. In that case, that claim is deceptive unless any reasonable recycling program could separate the one recyclable layer from the three non-recyclable layers.    

Refillable  

If you claim an item is refillable, you need to provide the means to refill the package. That means a system to collect and refill the package or a product customers can buy to refill the original container themselves. For example, Common Goods—a company that makes plant-based cleaning and soap products—provides refill stations for customers to refill plastic or glass bottles.  

Source reduction  

Qualify and provide the basis of comparison for source reduction claims (e.g. a product creates less waste or is less toxic) to avoid deceiving customers and eroding consumer perception. For example, don’t say your package uses “25% less paper” unless you qualify the claim, “25% less paper than our average competitor.”  

Degradable    

If you say an item is degradable (e.g., biodegradable or photodegradable), include evidence that it will completely break down soon after customary disposal.    

Compostable  

Want to claim your product or packaging is compostable? Share evidence that the item will break down into, or otherwise become part of, usable compost in a safe and timely manner. Be transparent about the type of composting required—is it compostable using typical at-home methods, or does it require a specialized facility? For example, Kauai Coffee made single-serve coffee pods, marketed as “certified 100% compostable.” However, the company did not initially disclose that the pods aren’t suitable for home compost. Instead, only geographically limited industrial facilities could compost the pods. The National Advertising Division cited the FTC Green Guides to recommend Kauai discontinue or modify its claims, and the company agreed to do so in 2017.  

Free-of and other common claims

Free-of  

While it might be technically true to claim your consumer product is free of a substance, the “free-of” claim is deceptive if that product contains similarly harmful substances. The same holds true if the substance was never associated with the product category in the first place. It’d be like claiming an electronic device is free of GMO corn.  

Ozone-safe or ozone-friendly  

An ozone-safe or ozone-friendly claim is inherently deceptive if the product contains ozone-depleting pollutants. These include chlorofluorocarbons (CFCs) and hydrochlorofluorocarbons, often found in refrigerants, air conditioners, and aerosols.    

Non-toxic    

If you claim that an item is non-toxic, include who or what that item is non-toxic for—humans, the environment, or both. For instance, it’s deceptive—and ambiguous—to market a cleaning product as “essentially” or “practically” non-toxic.  

L.A. Baby is a real-world example. The company claimed its products “could” include natural bamboo. Could? The FTC specifically flagged these types of bamboo claims a decade ago because rayon is generally derived from plant cellulose but through a harsh, hazardous chemical process. In May 2021, a collaboration of over 100 NGOs filed a complaint with the FTC that accused L.A. Baby—among other makers of crib mattresses—of making “numerous representations, implications, and overstatements that lead consumers to believe that it is producing unqualifiedly non-toxic, safe, and organic baby products.” Concurrently, the group published a report that detailed evidence that certain mattress makers engage in flagrant greenwashing that runs afoul of the FTC’s Green Guides.  

Certifications and seals of approval  

It’s deceptive to misrepresent—directly or indirectly—an independent third-party endorsement or certification of one of your products.    

Some of the most common and trustworthy third-party seals of approval include USDA Organic, which verifies the types of pesticides, herbicides, and fertilizers that are allowed to be used on crops to be considered organic; ECOLOGO, which certifies various cleaning, electronic, and paper goods; and ENERGY STAR, which requires products that meet a standard for energy savings over similar products.  

And even if a third party does certify your product, you must substantiate claims made to customers. If, for instance, you market a cleaning product with a seal that says, “Environment-approved” without context, the seal is deceptive because it implies far-reaching unsubstantiated environmental benefits. In 2017, the FTC charged Moonlight Slumber, another baby mattress manufacturer, with making false “organic” claims about its “eco-friendly plant-based” mattresses. Moonlight Slumber also earned the “Green Safety Shield,” a made-up award the company bestowed upon itself.  

A parting thought

As consumers become more conscious and intentional about the environmental impact of the things they buy, companies, retailers, and businesses have a moral and legal obligation to clearly and ethically represent the environmental benefits of their products and services.

More from Sustain.Life
Author:
Danny Schleien
Tags:
Business strategy
Product footprint
Values
Sustainability
The takeaway

• Companies have a moral and legal obligation to clearly and ethically represent the environmental benefits of their products and services.

• The FTC’s Green Guides outline the proper use of environmental claims, which protect consumer interests and make it easier for marketers to avoid legal headaches.

• If you promote your product’s environmental benefits, focus on verifiable claims, rather than broad, non-specific language.