What is Old is Green Again: Ad Law in the 90s

As we continue to celebrate the 50th anniversary of independent advertising industry self-regulation by examining the impacts on advertising law over past decades, this month we highlight the Federal Trade Commission’s (FTC) Green Guides, first issued in 1992. 

The environmental or “green” benefits of purchasing a particular product can be very important for consumers, even more so now than in the 1990s. Increasingly consumers are seeking out companies whose practices align with their concepts of social responsibility generally, or who commit to environmentally friendly practices at the corporate level. Advertising plays a particularly important role when it comes to promoting the environmental benefits of products because, as we wrote about in our call to action to improve green marketing, consumers cannot easily verify for themselves whether environmental advertising claims are truthful.

Both the FTC and BBB National Programs' National Advertising Division (NAD) have a long history of reviewing environmental claims holding businesses accountable if consumers are misled, but in the 1980’s, an uptick in advertising environmental benefits of products and packaging led the FTC to issue its first guidelines for environmental marketing. Consumer confusion over the environmental impact of products they purchased produced regulatory responses at the state and federal level. The potential for differing, inconsistent standards resulted in uncertainty for business and advertisers.  

Working with the Environmental Protection Agency, state Attorneys General, businesses, and consumers, the FTC, under the leadership of Chairman Janet Steiger, held public hearings to learn more about the issues associated with environmental marketing. In 1992 the FTC issued its first version of the Guides for the Use of Environmental Marketing Claims (“Green Guides”). The Green Guides were designed to respond to changes in consumer understanding and developments in environmental technology, so the FTC established a three-year review to seek public comment on whether and how the Green Guides should be modified.  

The Green Guides incorporated general FTC advertising law principles and applied them to environmental claims. The 1992 Green Guides addressed four general concerns that apply to all environmental claims:

• Qualifications and disclosures should be sufficiently clear and prominent to prevent deception.
• Claims should make clear whether they apply to the product, the package, or a component of either.
• Environmental benefits should not be overstated. 
• Comparative claims should be clear so that consumers know whether the comparison is to a previous version of the advertiser’s product or to a competitor’s product.  

The 1992 Green Guides also addressed eight specific types of environmental terms including degradable, biodegradable, compostable, recyclable, and ozone friendly. The Green Guides were revised in 1996, 1998, and 2012, and the FTC recently announced that it will review the Green Guides in 2022 as part of its ten-year regulatory review cycle.  

The four general concerns addressed by the 1992 Green Guides continue to be relevant today and have often been a focus for NAD, with scores of decisions issued that address whether certain environmental advertising claims are appropriately substantiated. Specifically, NAD decisions have frequently focused on the prominence of disclosures:

• Whether they are clear and conspicuous.
• Whether the claim applies to the product or packaging or both.
• Whether there is a good fit between the claim made and the substantiation for the claim.

In addition, NAD often addresses comparative environmental claims.  

Applying the Green Guides, recent NAD decisions recommend that advertisers qualify environmental claims and use clear and conspicuous disclosures to avoid overstating the environmental benefits of their products and mislead consumers. These decisions add to the guidance available for advertisers on how to truthfully advertise a product’s environmental benefits and provide concrete examples using FTC guidance.

Nearly 30 years ago the Green Guides were designed to prevent inconsistent standards from eroding consumer trust and creating uncertainty for businesses. Over the ensuing decades, NAD’s application of the guides in its many decisions reviewing environmental claims has heightened the impact of the Green Guides. When the FTC provides guidance on how it applies advertising principles on a particular issue such as environmental claims, that guidance sets the rules of the road for NAD’s review, enhancing protections for consumers and leveling the playing field for business.