The FTC Green Guides...
Made Simple
A Companion Guide for Achieving Green Marketing Compliance
Introduction
Contents “The release of the revised Green Introdcution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Part 1: The Green Guides and You What are the Green Guides and why are they important? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Beware the Lurking Tiger. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Examples of FTC and other enforcement action* on green claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Guides will likely lead to more enforcement by the FTC... and an increase in actions between competitors to force compliance with the guidelines.”
Befriending the Tiger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Mary Ann Mullin and Daniel J. Deeb,
Taming the Tiger. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
environmental attorneys with national law firm
Transparency: the Heart of Green Compliance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Schiff Hardin LLP
Part 2: The Q.U.I.E.T. Method for Transparency in Environmental Messaging. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Quantify & Qualify . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Understand Sustainability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
On October 1, 2012, the Federal Trade Commission released its long-pending revisions to the Guides for the Use of Environmental Marketing Claims (more commonly known as the Green Guides.) These revisions – the first in 14 years – reflect the profound changes that have taken place in the production and marketing of green and sustainable products and services. They underscore the increasing importance of sustainability in our society, along with a growing intolerance of misleading environmental claims (greenwashing.) Will the release of the revised Green Guides result in increased enforcement on the part of the FTC?
Practice Integrity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Empathize . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Third Party Certify. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 The Q.U.I.E.T. Advantage in Compliance and Beyond. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Appendices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Appendix A: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Appendix B: Interactive Quiz. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Appendix C: More Information on Eco Labels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Appendix D: Additional Resources. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
At the time of this writing, it’s too soon to tell – but FTC experts believe it will. Clearly, immediate compliance with the latest version of the Green Guides is in order for any company that values its reputation. This report is intended to help you navigate the tricky waters of FTC green marketing compliance. This is not a point-by-point explanation of the guidelines, as the FTC itself provides a very nice summary of the Guides (we’ve included the link to it in Appendix D.) Rather, we will focus on the “reasons why” behind the Green Guides, especially the “heart of green marketing,” transparency. We will examine the risks and benefits of making green claims for your products, and introduce you to our Q.U.I.E.T. method for achieving transparency and compliance in your marketing. At the end of this report you will find additional tools and information to help you maintain FTC compliance. These include a printable reminder card outlining the main points of the Q.U.I.E.T. method; a special section on eco-labels; a link to an interactive quiz to test your knowledge of the updated Green Guides; and an extensive list of additional resources. But first, let’s take a look at how the Green Guides can affect your business.
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Part 1: The Green Guides and You “Conduct inconsistent with the positions articulated in these guides may result in
What are the Green Guides and why are they important?
corrective action by the Commission… if, after investigation, the Commission has reason to believe that the behavior falls within the scope of conduct declared unlawful by the statute.” – Federal Trade Commission
The Federal Trade Commission’s Green Guides are a group of guidelines contained within Title 16 of the U.S. Government’s Code of Federal Regulations. They are self-described as “a series of general principles and specific guidance on the use of environmental claims.” The Green Guides are not laws; rather they are administrative interpretations of existing law. Specifically, they are meant to clarify and elaborate on Section 5 of the FTC Act, which prohibits ‘‘unfair or deceptive acts or practices in or affecting commerce.’’ Legally, the Green Guides are considered ‘persuasive authority,’ and may be used in court to back up complaints of deceptive advertising and unfair business practices. As we shall see, the Green Guides do have clout and can be used in court actions involving environmental marketing.
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Beware the Lurking Tiger So…what is the likelihood of getting smacked by the FTC should you violate the principles laid out in the Guides? Honestly, slim — but real. And now that the new revisions have been made official, the FTC is much more likely to go on the offensive. In their 2010 Greenwashing Report, sustainability consulting firm TerraChoice revealed a shocking statistic. They found that 98% of all green marketing claims analyzed in 2009 violated at least one of their “Seven Sins of Greenwashing.” Clearly, almost no one is 100% compliant – and in the vast majority of cases, no one has come to task. But times are changing. Due in part to TerraChoice’s report, tolerance for misleading environmental claims has plummeted. Although legal action by the FTC has been scant to date, enough instances have already occurred to prompt one commentator to dub the agency a “lurking tiger.”1 The FTC is capable of unleashing a major wave of enforcement at any time – a scenario made even more likely by the agency’s official adoption of the revised Guides. And the FTC is not the only tiger in the bush. The Green Guides are the ultimate guidelines for settling environmental marketing disputes of all kinds. They serve as the template for green marketing regulations in several states, including California, Maine, Minnesota and Rhode Island. They are also referenced by the National Advertising Division (the advertising industry’s self-regulatory organization) when settling disputes regarding green claims. As Annie Mullin and Dan Deeb of law firm Schiff Hardin put it, “We believe there will be an increase in private party actions because marketers have more ammunition to bring actions against a competitor if the competitor is making a deceptive green claim.” Attorney Thomas Cohn, former director of the FTC’s Northeast region, agrees. “With the FTC closely scrutinizing green claims,” he says, “it is particularly important that marketers’ enthusiasm be balanced against compliance officers’ concerns.”
1 Cole, Christopher, Regulation of Green Marketing: The State of Play in Summer 2011, EnvironmentalLeader.com, August 18, 2011.
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“Our purpose is to make sure consumers that want to buy green products are getting truthful information. There are two kinds of companies; those that live over the line and those that step
Examples of FTC and other enforcement action* on green claims: • October, 2012: The FTC takes action against two paint companies for making untruthful “Zero VOC” claims. • February, 2012: The FTC settles charges against 5 window manufacturers for deceptive energy and cost savings claims. • February, 2012: Honda Motor Company loses small claims suit over misrepresentation of hybrid fuel economy. Honda also came under attack for the same issue in a separate class action suit. • July, 2011: S.C. Johnson settles two class action suits brought against the company by consumers feeling misled by S.C. Johnson’s green labeling on its Windex products. • January, 2011: FTC sues eco-labeling company Tested Green under the FTC Act and bans them from doing business. The company had been selling fraudulent eco-certification labels to businesses.
over the line. The guides are written for companies that are trying to get it right.” James Kohn, associate director of enforcement for the FTC’s bureau of consumer protection
Befriending the Tiger It would be a mistake, however, to view the Green Guides as nothing but an annoying obstacle to effective marketing. The Federal Trade Commission crafted the Green Guides in response to deep-seated changes in society itself, and in consumer attitudes and preferences. They are meant to help ease the transition for all involved. As the agency itself proclaims, “guidance from the FTC can benefit both businesses and consumers alike.” Like it or not, today’s consumer is a completely different animal than (s)he was in the heyday of Madison Avenue. Today’s consumers are highly informed. They have the world’s wealth of information available to them at the press of a thumb – including detailed, intimate information about your company, your products, your supply chain and the experiences of their fellow consumers. They’re also more apt to care about social and environmental issues than past generations of consumers, and of course they are highly connected through social media, email, mobile phones and other technologies. That means there’s no hiding mistakes, or brushing consumer inquiries or complaints under the rug. The rug no longer exists. The good news? Becoming compliant doesn’t have to undermine your profitability. In fact, it may even increase your ROI.
• February, 2010: FTC warns 78 retailers, including Wal-Mart, against misleading claims on “bamboo” clothing. • June, 2009: FTC charges Kmart and two other companies with making false and unsubstantiated biodegradability claims. * The FTC is by no means the only entity to regulate (and enforce) green marketing claims. At the federal level, environmental claims are addressed under Section 43a of the Lanham Act. Several states, including California, Indiana, Wisconsin and Michigan, have also developed laws that specifically address green marketing claims (see Appendix B).
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Inbound marketing uses content and information to attract customers by quietly building relationships with them rather than aggressively “pushing” messages out at the consumer. This type of marketing tends to be very compatible with green compliance, since it provides ample opportunity to qualify and explain. A 2012 survey by Hubspot found that companies relying heavily on inbound marketing channels such as blogging, content publishing, SEO and social media enjoyed a 61% lower cost per lead than organizations whose marketing is dominated by outbound methods like telemarketing, direct mail, ads and trade shows.
Taming the Tiger Because the FTC’s guidelines are ultimately a reflection of consumer concerns and thought patterns, following them can help you reach your prospects more effectively. Many companies are already turning to practices that are highly compatible with Green Guide suggestions in response to the consumer trends mentioned above. As a result, they are enjoying increased customer trust, loyalty, social sharing, and, ultimately, sales. Once you’re comfortable with the Green Guides you may even begin to see them as a friendly ally. Green Guide compliance can:
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Assist you in making truthful claims and avoiding consumer complaints about greenwashing Level the playing field by sheltering you from FTC action and leaving non-compliant competitors open to disciplinary action, and Improve your bottom line by reducing consumer confusion and disillusionment, and encouraging consumer interest in green products
Moving forward with Green Guide compliance We’ve just discussed what the Green Guides are and how they can affect your company. Now it’s time to develop a deeper understanding of the principles behind the Guides, to help you more easily achieve compliance. Let’s start by exploring the heart of the matter: transparency.
The concept of transparency is so ultra critical that when the question “What’s the most important element in a Green marketing campaign?” popped up during a small-group discussion at a Green marketing conference we attended in 2009, all eight of us at the table practically shouted in unison, “Transparency!”
Transparency: the Heart of Green Compliance The Green Guides exist for one reason only: to protect consumers from deception in environmental marketing. The FTC doesn’t care what you sell or for what purpose, as long as your claims are truthful and easy for the average Joe to interpret. Despite the complexity of the Green Guides, there’s really only one way to achieve this goal: transparency. If you’re not familiar with the term, transparency means full disclosure. It means being open and honest about the methods, materials and procedures your company uses. For instance, if your website, packaging or Facebook page asserts that the tennis shoes you manufacture are made with organically grown cotton canvas using fair labor practices, be prepared to prove your claims, preferably with third-party verification. Transparency itself is a relatively simple idea. What’s not always so simple is integrating it into your marketing, especially when you’re juggling multiple projects and goals. To help you with this task, we’ve developed a system we call the Q.U.I.E.T. Method for Transparency in Environmental Marketing.
Q.U.I.E.T. stands for: Q - Quantify & qualify U - Understanding sustainability I - Integrity E - Empathy, and T - Third-party certification Together, these 5 key elements can help you achieve greater transparency and compliance in your environmental marketing. Let’s take a look at each one in turn.
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End of Preview We hope you have enjoyed Part 1 of The FTC Green Guides Made Simple. To request a FREE copy of our full report, including Part 2 (an introduction to our Q.U.I.E.T. method for achieving Green Guide compliance for your company,) plus dozens of additional green marketing and compliance resources, please contact us at info@greeninkcopywriting.com. You will receive such essential information as: The correct way to display eco-logos (sorry, just being certified isn’t enough anymore) The common copywriting convention no green promotion should ever include Which critical information evey manufacturer of green products should have at their fingertips in the event of an audit And much more.
“(Green Guide compliance) will be an area of increased law enforcement activity in the coming year.” - Jessica Rich, Director, FTC’s Bureau of Consumer Protection, Sept. 2013
There is no time to waste. Order your essential Green Guide compliance report today, FREE at http://GreenInkCopywriting.com/contact.
Anne Michelsen is a freelance copywriter for green and sustainable business, and principal of Green Ink Copywriting. Anne helps companies maximize sales and leads for sustainable products and services, while remaining compliant with green marketing regulations. She has written for and consulted with clients in diverse industries, including ecofashion, beauty, solar/renewables, plastics recycling, and construction, as well as environmental nonprofits. Anne’s articles have appeared in GreenBiz.com, Down to Business Magazine, Green Child Magazine, and TriplePundit.com, among others. For your free no-obligation consultation on your green marketing needs, or for information on Green Guides compliance consulting and training, contact Anne today at anne@greeninkcopywriting.com.