FTC scrutinizes eco-friendly claims

By Caroline Scott-Thomas

- Last updated on GMT

Related tags: Federal trade commission, Marketing, Business

The Federal Trade Commission (FTC) has proposed changes to its guidelines for ‘green’ label claims to help marketers avoid making statements that could mislead consumers.

There are hundreds of different environmental seals of approval in use in the United States – as well as independent ‘green’ claims – but the FTC has said manufacturers’ ideas of what ‘environmentally friendly’ or ‘eco-friendly’ labels and statements mean can sometimes be at odds with consumer perception.

The FTC issued its first Environmental Marketing Guide – unofficially known as the Green Guide – in 1992, but the most recent edition has not been updated since 1998. When finalized, the guide is expected to establish significant new rules about how marketers can advertise their products’ eco credentials.

FTC chairman Jon Leibowitz said: “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. The proposed updates to the Green Guides will help businesses better align their product claims with consumer expectations.”

Attack on greenwashing

Among other proposals, the new guidelines would crack down on very general environmental claims, such as ‘eco-friendly’; the use of certifications and seals of approval; and claims about the degradability of products or their packaging, such as ‘compostable’. They also provide guidance on claims referring to renewable energy, renewable materials and carbon emissions.

As companies have increasingly tried to put forward an environmentally friendly image, many have been accused of ‘greenwashing’. An American Grocery Shopper Survey found a high level of skepticism amongst consumers around eco-claims, with three-quarters believing that “some companies are exploiting environmentally friendly claims for marketing purposes.”

Cautioning against the use of general claims that a product is environmentally friendly, the FTC said: “Very few products, if any, have all the attributes consumers seem to perceive from such claims, making these claims nearly impossible to substantiate.”

Natural claims

In addition, the FTC declined to set a definition for ‘natural’ in the guide, despite having been petitioned to do so.

It said: “The role of the Guides is to prevent consumer deception, so definitions for terms such as natural must be based on what consumers understand those terms to mean. However, no commenters provided consumer perception evidence indicating how consumers understand the term ‘natural’.”

The agency added that marketers using a natural claim must be able to substantiate that claim to “reasonable consumers”.

The document is open for comment until December 10. It can be accessed online here​.

Related topics: Regulation

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