Advertising claims about the environmental attributes of a product continue to become more important, and the Federal Trade Commission (FTC) is planning to change how it regulates advertising. The FTC is seeking comment on a long-planned refresh of its Guides for the Use of Environmental Marketing Claims (Green Guides). The Green Guides serve as the FTC’s non-binding enforcement guidance for environmental marketing claims – though the FTC is considering making them enforceable. The FTC is soliciting input on this and other topics for 60 days to begin when the request for public comment is published in the Federal Register.

Background 

The Green Guides were last updated in 2012. The FTC first indicated its intent to update the Green Guides in its July 2021 ten-year regulatory review schedule, indicating that it would initiate a review in 2022. After the FTC considers comments submitted during the upcoming comment period, the FTC will likely publish a proposed update to the Green Guides. However, the most recent update to the Green Guides involved several interim steps and data collection efforts, which stretched over a period of years. 

Topics for Public Comment

The FTC has invited public comment on several topics, including the following:

• Enforceability. The Green Guides currently serve as nonbinding enforcement guidance that assist the FTC in determining whether a claim violates Federal Trade Commission Act prohibitions against unfair or deceptive acts. The FTC is now considering rulemaking to establish independently enforceable requirements related to environmental claims.

• Carbon offsets and climate change. The FTC requests comments on whether the revised Green Guides should provide additional information on such claims, including consumer perception of such claims as “net zero,” “carbon neutral,” “low carbon,” or “carbon negative.”
• Recyclability claims. The FTC seeks comments on whether it should change the current threshold for unqualified recyclability claims. 
• Recycled content claims. The FTC also requests comments on whether consumers widely understand unqualified claims about recycled content, and whether there are more appropriate methods of substantiating these claims.
• Other types of claims. The FTC is also soliciting comments on whether additional or updated guidance is needed for other claims, such as “compostable,” “degradable,” “ozonefriendly,” “organic,” and “sustainable,” as well as those regarding energy use and energy efficiency. The FTC is again considering guidance on claims relating to sustainability. While it decided not to include this guidance in its 2012 update, the proliferation of sustainability claims may spur the FTC to reconsider.

In addition to the abovementioned topics, the FTC requests comments in response to a number of questions regarding the utility and the impact of the Green Guides. For example, the FTC asks stakeholders whether there is a continuing need for the Green Guides and what benefits the Green Guides provide to consumers. The FTC also asks if there are international laws, regulations, or standards that it should consider. These questions provide stakeholders with the opportunity to provide input on how the Green Guides can more accurately reflect consumer perception and how the Guides might align with international standards in a way that provides multinationals with clearer guidance for marketing claims made in multiple jurisdictions.

Interested parties can use the upcoming comment period to identify particular issues or claims relevant to their products, or educate the FTC on consumer perception of certain types of claims. 

Implications of the Green Guides Refresh

The most direct impact of the Green Guides refresh will be on federal enforcement regarding allegedly false or misleading environmental marketing claims. However, the Green Guides also serve to guide: 1) enforcement of state consumer protection laws; 2) court decisions on civil suits, including class action greenwashing suits; and 3) competitor challenges brought before the National Advertising Division of BBB National Programs. Even if the Green Guides remain non-binding, any refresh will the potential legal consequences stemming from environmental claims. Beyond federal and state regulation, companies should also take note of the growing risk of consumer and class action litigation related to corporate sustainability marketing claims.

Beveridge & Diamond’s ESG and Chemicals Regulation practice groups and Consumer Products and Chemicals industry groups provide strategic, business-focused advice to U.S. and multinational companies that make, distribute, transport, or sell consumer products in a hyper-competitive and evolving consumer goods market. Together, we help clients identify, understand, and comply with complex regulatory requirements and navigate interrelated reputation issues in the fast-moving area of sustainability. For more information, please contact the authors.