Transcript of "Insight sustainability green_guide_ftc"
GREEN GUIDES PROPOSED BY THEFEDERAL TRADE COMMISSIONUSA’s Federal Trade Commission (FTC) has released its proposals to update the Guides for Use ofEnvironmental Marketing Claims (Green Guides or Guides). Given the rising awareness aboutenvironmental issues among consumers, businesses have increased their focus on the way that theyimpact the environment. Businesses have also become active and aggressive in communicating theseimpacts and initiatives taken by them to reduce the impact on environment. With this background, the FTChas made the decision to revamp the Guides that businesses use to validate the claims they make toconsumers. These rules have not been updated since 1998. As expected, the proposed version of theGreen Guides will force businesses to be stricter with the claims that they make regarding theenvironmental impact of their products.WHAT ARE THE GREEN GUIDES?The FTC monitors marketing claims made to consumers to ensure that such claims are truthful and non-deceptive. Since consumers have begun demanding and favouring products that are deemedenvironmentally-friendly, the businesses have become more driven to market their products to get theirposition across. It is FTC’s job to ensure that claims by product manufacturer/marketers are accurate andsubstantiated. Through the Green Guides, the FTC also provided businesses and advertisers with generalprinciples they should follow in advertising to consumers, ways that consumers may perceive ormisperceive various marketing claims, and guidance to avoid making deceptive claims.The older version of the Green Guides had 10 major focuses. These focuses included: generalenvironmental benefit claims, certifications and seals of approval, compostable claims, degradable claims,“free of” and “non-toxic” claims, ozone-safe and ozone-friendly claims, recyclable claims, recycled contentclaims, refillable claims, and source reduction claims. The proposed Green Guides include the areas listedabove and also cover marketing claims regarding carbon offsets, renewable energy claims, and renewablematerials claims. There are some minor, non-substantive changes to the Guides to increase readability, butthe major substantive changes are detailed below.Of particular interest are the following additions to the Green Guides
CARBON OFFSETSCarbon offsets are being included in the proposed Guide for the first time. The draft guideline requires thatmarketers “employ competent and reliable scientific and accounting methods to properly quantify claimedemission reductions and to ensure that they do not sell the same reduction more than one time.”Additionally, any carbon offsets that represent emission reductions that will not occur for two or more yearsmust be prominently disclosed and no carbon offsets that represent reductions required by law may beclaimed.RENEWABLE ENERGY CLAIMSThe proposed Guides include a section directing marketers to avoid claims that their products are made“with renewable energy” if the product is made using fossil fuels. Additionally, the source(s) of therenewable energy are required to be disclosed. The marketers who create their goods with renewableenergy, but then sell renewable energy certificates, may not claim that they use renewable energy wheresuch a claim will deceive consumers, due to double counting.RENEWABLE MATERIALS CLAIMSThe proposed Guides include a section requiring marketers to avoid deceiving claims about “renewablematerials” so that it is clear what the materials are, where they came from, and why they are consideredrenewable. Additionally, as with all other claims, any claim that a product is made with renewable materialsshould be qualified if it is not entirely produced with such materials.As can be seen from the tone, the Green Guides focus on avoiding consumer deception. The onus is onmarketers to substantiate and qualify claims to avoid deceiving consumers. The FTC is seeking publiccomments on the proposed changes until December 10, 2010, after which it will begin finalizing theGuides.REFERENCE1. Article by Arent Fox LLP at http://www.lexology.com/library/detail.aspx?g=d4fee28e-13aa-4549- 8498-148bb49d7e1b&utm_source=Lexology+Daily+Newsfeed&utm_medium=HTML+email+-+Body+- +Federal+section&utm_campaign=Lexology+subscriber+daily+feed&utm_content=Lexology+Daily+Ne wsfeed+2010-10-13&utm_term=
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