Filling the Gaps in the Green Guides

With increasing consumer interest in buying environmentally friendly products, this Earth Day is a good time to consider how the standards for “green” claims in advertising have developed, and, more importantly, where they might be heading. 

The FTC’s Green Guides

Marketers should be aware that the Federal Trade Commission’s (FTC) Guides for the Use of Environmental Marketing Claims, the Green Guides, are under review for potential updates and changes. The Green Guides set standards for advertising environmental benefits that provide companies with a blueprint to follow in crafting and substantiating their claims. 

Consumers benefit when this type of advertising is truthful because it helps them understand the environmental impacts of the products they purchase, allowing them to choose products (sometimes at a premium) that reduce environmental impacts. Companies large and small also benefit when advertising claim substantiation is held to a common standard because it levels the playing field, allowing for fair competition. 

Since 1992 the Green Guides have provided important rules of the road for industry to help ensure that environmental claims are truthful, accurate, and not misleading and to help boost consumer confidence in “green” advertising claims. 

BBB National Programs’ National Advertising Division (NAD) has relied on and cited the Green Guides in over 40 cases since the Guides were last updated in 2012. The guidance has been important in NAD case decisions recommending that advertisers revise claims for a range of products including diapers, laundry detergent, cleaning products, drain dissolvers, plastic bags, home insulation, coffee pods, and cookware and, for example, when making claims that certain products are “compostable” or “biodegradable.” 

Filling in the Gaps

NAD also examines advertising of environmental benefits on issues not presently addressed by the Green Guides. While NAD follows FTC guidance, it will fill in the “gaps” when there is no specific guidance. 

1. Aspirational Claims

For instance, the FTC Green Guides do not presently address the substantiation needed to support different types of aspirational environmental benefit claims, an area of green claims where NAD has seen an uptick in recent years. Whether the claim is specific or general, NAD has concluded that aspirational claims can convey a message that sets consumer expectations of future environmental benefits that may be misleading if the advertiser’s efforts are not consistent with its stated goals. NAD case decisions have noted that advertisers should demonstrate that their goals and aspirations are not merely illusory and provide evidence to support their commitments. When aspirational claims are tied to measurable outcomes, NAD has concluded that an advertiser must be able to demonstrate that it has a plan in place that could allow it to achieve the stated goal. 

2. “Net Zero”

In recent NAD challenges, advertisers have made carbon-neutral claims or set a target date for achieving “net zero” carbon emissions. Advertisers have cited a few different standards as support for carbon-neutral claims. Several issues raised by these claims are not addressed specifically in the Green Guides, including (1) whether there are reliable standards for measuring carbon neutrality or the elements that contribute to a reliable standard; (2) the extent to which carbon offsets can be used to achieve carbon neutrality; and (3) the stage of planning to achieve carbon neutrality that an advertiser must reach before advertising the carbon neutral target to consumers. 

3. “Sustainable” 

The term “sustainable” is used frequently to promote products and brands. Many brands have sustainability pages on their website, release sustainability reports, and often tout “sustainable” products or initiatives. Since the Green Guides were last updated, the term has been included in more than 30 NAD cases. In general, NAD has concluded that an unqualified “sustainability” claim can convey a broad message and that such claims should be qualified to limit the message to the specific environmental benefit provided. 

The FTC has noted that the claim that a product is “sustainable” can communicate a wide range of meanings to consumers, including broad messages about the net impact on the environment, which makes it important to assess the context and any qualifying or explanatory language made in conjunction with the claim to determine whether the claim may convey a general environmental benefit message to consumers that may be difficult to substantiate. The International Chamber of Commerce’s Framework for Environmental Marketing Claims notes that an unqualified “sustainability” claim may imply social and economic impacts, such as support for fair working conditions, diversity and inclusion, communities or charities, or the like, as well. Specific guidance to be included in the text of the Green Guides on using the claim “sustainable” would be helpful and set standards for use of the term in advertising and the substantiation needed when the claim is used. 

4. Benefits of Partnerships

NAD has also addressed advertising touting the benefits of an advertiser’s relationships with third-party organizations, such as claims that an advertiser was working with third parties to “improve recycling access, . . . and modernize the recycling infrastructure in communities across the country” and claims that an advertiser partnered with a well-known conservation organization, advertising the goal of reducing plastic waste. In these cases, NAD has focused on how partnerships with third-party organizations can be positioned to avoid misleading consumers as to the extent of the benefits of the partnership. 

5. Limitations on the Reach of Green Initiatives

Another area in which the Green Guides can be modified to provide more specific guidance is in illustrating how the benefits of “green” initiatives can be overstated. For example, the touted benefit may derive from only a portion of the manufacturing process. In a recent decision, NAD determined that the advertiser had support for specific water and energy savings claims, but the advertising did not limit the claim to the water and energy savings in a specific step in the manufacturing process. Therefore, NAD recommended that the claims be modified to clearly disclose that the benefit is limited to a portion of the manufacturing process and not the total environmental impact of the product.

It remains to be seen whether and how the FTC’s revisions to the Green Guides will address these gaps. While consumers and businesses may benefit from more specific guidance in these areas, regardless of whether the Green Guides are modified to fill in these gaps, NAD will continue to address these important “green” marketing claims.