FTC to toughen anti-greenwashing rules

by Lee van der Voo
Sustainable Business Oregon

Purveyors of green goods and services can expect increased pressure to avoid greenwashing in 2010, following a push by the Federal Trade Commission to retool its guidelines on environmental marketing claims.

That’s good news for green businesses eager to cleanse the marketplace of snake oil sales, increasingly common in an era of growing consumer interest in sustainable products.

The effort by the FTC to retool its Green Guides in 2010, however, also puts businesses on notice that inaccurate claims about environmental benefits could lead to trouble.

The FTC’s Green Guides are intended to serve as guidelines for businesses that make claims of environmental benefit in their marketing. The guides were last updated in 1998. The next update is expected to be complete by the end of the year, following a public comment period. Changes will expand the FTC’s reach from recycled, degradable and ozone-safe products to more sophisticated offerings like carbon offsets, renewable energy certificates, green packaging, textiles, building products and buildings themselves.

Though the Green Guides are advisory and not enforceable by law, their revision bolsters the FTC’s ability to take action against greenwashing as unfair or deceptive advertising, both prohibited by the FTC Act.

That could lead to trouble for businesses in Oregon that make false claims of environmental benefit just to lure business, according to Tony Green, director of communications and policy for the Oregon Department of Justice.

“It will make it easier for us, if the FTC toughens up its guidelines, to go after somebody who claims to meet them if in fact they aren’t,” Green said.

The FTC has signaled an intent to take similar action nationally since beginning the review of the Green Guides in 2008.

In August 2009, for example, the agency sued four clothing manufacturers — Sami Designs and its subsidiaries and The M Group Inc. — to bar them from claiming their rayon garments were made from bamboo in an eco-friendly way and contained antimicrobial properties. Six months later, the agency warned 78 retailers including Wal-Mart, Target and Kmart against selling similarly marketed products.

Also in 2009, the FTC sued Kmart Corp., Tender Corp., and Dyna-E International with making false claims that their paper products were “biodegradable.”

For companies already focused on sustainable business, they have little to fear from the Green Guides update if their claims of environmental benefit are true, according to Deborah Morrison, a distinguished professor of advertising at the University of Oregon. For those companies, the updated Green Guides offers greater benefits to building a responsible and ecologically friendly brand.

“The brands around them will be called out more often and try to find the wiggle room again and again,” she said, adding that tighter regulations will combine with increased consumer scrutiny to create a tougher environment for false environmental claims.

“I don’t know if we’re getting more honest but we’re getting more critical. We have more people, new tools, more agencies and effort and support for thinking about this area,” she said.

Among those tools is the Greenwashing Index, created by Morrison and colleague Kim Sheenan through a partnership with the University of Oregon and the Texas-based advertising firm EnviroMedia Social Marketing three years ago.

The web site allows consumers to post and rate advertising for purportedly green products, like green webhosting, battery-powered lawnmowers and green cleaning products.

Morrison said the site helps writers and advertisers work with clients on what sells to green-minded consumers and what doesn’t. For those stoking a green image, she said, the best campaign is an honest, straightforward one that provides truthful details about what an environmentally responsible brand does.