FTC Issues Guidance for Environmental Marketing

Does your product label, packaging, or any other marketing materials contain information about the item's potential impact on the environment? If your company makes claims about compliance with environmental rules, check with the Federal Trade Commission before slapping stickers on your products. You may already be violating its recently published guidelines.

The US government agency's new guidelines clarify how companies can use "environmental claims included in labeling, advertising, promotional materials and all other forms of marketing." They apply to "any claim about the environmental attributes of a product, package or service in connection with the sale, offering for sale, or marketing of such product, package or service for personal, family or household use, or for commercial, institutional or industrial use."

As companies struggle to understand and comply with a bunch of environmental rules and regulations issued by authorities around the world, it has become obvious that businesses that demonstrate compliance can use it as a competitive weapon. In some industries, including electronics, compliance can help burnish a company's image and confer on its products a level of legitimacy in a market rife with concerns about labor and environmental practices.

The desire to demonstrate compliance has its pitfalls, though. The FTC believes some manufacturers may be making false claims about the environmental status of their products. The reputations of companies that are committed to strict compliance with environmental rules may be in jeopardy, too, because the consuming public and other audiences may be unable to distinguish between the dubious and the honest. The FTC said its guidelines are meant to "provide a 'safe harbor' for marketers who want certainty about how to make environmental claims."

It's not obligatory for companies to follow these guidelines. However, companies that don't may find themselves in violation of a section of the FTC Act that "makes unlawful deceptive acts and practices in or affecting commerce," the agency said. The electronics industry should pay close attention to the guidelines, since it is one of the industries affected by rules regarding the use of certain environmentally sensitive materials, as well as the sourcing of raw materials from places like the Democratic Republic of Congo.

Here are excerpts from the FTC guidelines.

• "In order to be effective, any qualifications or disclosures such as those described in these guides should be sufficiently clear, prominent and understandable to prevent deception."
• "An environmental marketing claim should be presented in a way that makes clear whether the environmental attribute or benefit being asserted refers to the product, the product's packaging, a service or to a portion or component of the product, package or service."
• "Marketers should avoid implications of significant environmental benefits if the benefit is in fact negligible."
• "The advertiser should be able to substantiate the comparison."
• "It is deceptive to misrepresent, directly or by implication, that a product, package or service offers a general environmental benefit."
• "A claim that a product or package is compostable should be substantiated by competent and reliable scientific evidence."
• "Claims of recyclability should be qualified to the extent necessary to avoid consumer deception about any limited availability of recycling programs and collection sites. If an incidental component significantly limits the ability to recycle a product or package, a claim of recyclability would be deceptive."
• "A recycled content claim may be made only for materials that have been recovered or otherwise diverted from the solid waste stream, either during the manufacturing process (pre-consumer), or after consumer use (post-consumer)."
• "Source reduction claims should be qualified to the extent necessary to avoid consumer deception about the amount of the source reduction and about the basis for any comparison asserted."
• "A package should not be marketed with an unqualified refillable claim, if it is up to the consumer to find new ways to refill the package."
• "A claim that a product does not harm the ozone layer is deceptive if the product contains an ozone-depleting substance."