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Don’t Make Environmental Claims You Can’t Back Up
Green Guides: Companies market products based on environmental attributes should ensure that they line up with federal law regarding the proper use of environmental claims.
By DeAnna Stephens Baker
Date Posted: 5/1/2013
The interest in environmentally friendly products has been growing over the past few years. More and more companies promote the “green” benefits of their products as part of their regular marketing – and the pallet industry is no exception. But sometimes what a company thinks its environmental claims mean and what consumers understand are two different things.
Any company that makes any types of green claims about a product needs to make sure that it is done in a way that does not violate federal laws. Section 5 of the Federal Trade Commission (FTC) Act prohibits businesses from using unfair or deceptive acts or practices. This includes ensuring that all marketing claims regarding the environmental attributes of products are not misleading. The U.S. FTC takes environmental claims that could be misleading to consumers seriously, and could take legal action to rectify any claims that violate the FTC Act.
While it is doubtful that most pallet or lumber companies will ever be targeted by the FTC, you don’t want to make claims that could cause problems in the marketplace or leave you open to legal scrutiny.
Fortunately, the FTC has a guide designed to help companies ensure that their environmental marketing claims comply with federal regulations – the Green Guides. The Green Guides are not regulations or laws. They are the FTC’s guidance on how to avoid making deceptive advertising claims related to the environmental attributes of a product or service and include descriptions of environmental marketing claims the FTC may or may not find deceptive under Section 5 of the FTC Act. The Green Guides outline general principles that apply to all environmental marketing claims and provide guidance regarding many specific environmental benefit claims. They explain how reasonable consumers likely interpret such claims, describe the basic elements necessary to substantiate it, and present options for qualifying it to avoid deception. An updated version of the Green Guides was released in October 2012 that includes new guidance on environmental claims that were not common when the Guides were last reviewed.
The updated Green Guides caution marketers against making broad, unqualified claims that a product is “environmentally friendly” or “eco-friendly” because consumers are likely to perceive such claims to mean that the product has specific and far-reaching environmental benefits.
“Very few products, if any, have all the attributes consumers seem to perceive from such claims, making these claims nearly impossible to substantiate,” the FTC explained.
The over-arching idea is that a company must be able to back up any claims made about the environmental impact or greenness of a product. This applies even to the use of environmental certifications or seals. The Green Guides say to not use environmental certifications or seals that don’t clearly convey the basis for the certification, because they are likely to convey general environmental benefits. If a company does choose to use a seal or certification that does not convey the basis for the certification, the company should identify, clearly and prominently, specific environmental benefits. Regardless, the company using the third-party certification is still held responsible for being able to substantiate all expressed and implied claims.
Jacquie Ottman, founder of J. Ottman Consulting, a firm dedicated to helping companies with green marketing rules, said that because the greenness of a product is a relative, not an absolute, measure, using a life cycle analysis can help substantiate the green attributes of a product.
“The best way to determine relative greenness is a bona fide life cycle assessment covering all facets of a product’s environmental impacts, from raw materials procurement straight through to disposal,” said Ottman.
She also recommends not settling for just marketing the green attributes of a product, but going beyond that and linking them to other benefits that they can provide consumers.
“Let’s tout all things ‘water efficient’ as ‘cost effective’, and ‘fuel efficient’ as ‘convenient’,” she said.
There are several terms that are commonly used in the pallet industry that the Green Guides offer specific guidance on. These include biodegradable, recyclable, recycled and renewable material. Companies that use any of these terms should ensure that they understand how the FTC and consumers could interpret their meaning.
• Biodegradable: The Green Guides say that marketers may make an unqualified claim that a solid waste product is degradable only if they can prove that the entire product will completely break down and return to nature within one year. Since pallets cannot decompose within a year, especially if sent to a landfill, degradable claims made about pallets must be qualified to explain under what circumstances they would decompose.
• Recyclable: To call a product recyclable without any qualifications, a company must be able to substantiate that recycling facilities for it are available to at least 60% of consumers or communities where it is sold. If recycling facilities are not available to at least 60%, the company should qualify its recyclable claims by stating that recycling could be limited. Given the widespread distribution of pallet recycling companies across the country, this would be a fairly accurate claim for many pallet companies to make.
• Recycled: The Green Guides say that companies should claim products are made with recycled content only if the materials have been recovered or diverted from the waste stream during the manufacturing process or after consumer use. If a product is made partly from recycled materials, the amount should be clearly and prominently included in a qualification of the recycled claim. While this depends on a particular pallet and its life history, this also appears to be a fairly accurate claim for many pallet companies to make.
• Renewable material: Saying that a product is made with renewable material can be problematic because consumers could think that it means that it is made with recycled materials, recyclable or biodegradable. To avoid this problem, the renewable material should be specifically identified along with an explanation of why and how much of it is renewable.
For resources related to environmental marketing or to access the Green Guides, visit the FTC’s Business Center website, http://www.business.ftc.gov.