FTC Comes Down Heavily on Greenwashing

• Date: December 16, 2010
• Source: Admin

The FTC "Green Guides" & Proposed Changes

The FTC recently revised its "Green Guides" for businesses that make environmental marketing claims. The original Guide was issued by the FTC in 1992. This was revised in 1996 and then again in 1998 to provide administrative interpretations, so Section 5 of the FTC Act concerning environmental advertising and marketing practices could be applied. The revised Green Guides caution marketers and agencies against making general claims that a product is "green," "environmentally friendly" or "eco-friendly" unless the products deliver specific environmental benefits. Marketers have also been cautioned against the use of unqualified certifications or seals of approval. The updates by the FTC also include new guidance on use of product certifications and seals of approval in addition to "renewable energy" claims, "renewable materials" claims, "carbon offset" claims and other environmental claims.

The FTC emphasizes that firms lacking substantiation of claims before launching an advertising campaign, violate Section 5 of the FTC Act and are subject to prosecution. In addition to advertisers, advertising agencies may be held legally responsible for misleading claims in advertisements.  Advertising plays a significant role in stimulating the nation's economic activity and supporting jobs in all sectors of the economy. If public faith in advertising is eroded because of green-washing, the integrity of markets is eroded and the entire economy suffers.