FTC Clarifies Green Marketing Guidelines
To meet federal guidelines for green marketing, any environmental claim must be backed by reliable scientific evidence that shows a significant environmental benefit and does not mislead consumers, according to Laura Koss, senior attorney in the Federal Trade Commission's Division of Enforcement.
Those guidelines must be followed when marketing e-statements, solar loans and other environmentally-friendly products and services.
"In layman's terms, the statute says: Don't lie; back up your claim," Koss told CU Times.
There’s a fine line between what is acceptable advertising and what is not, according to the FTC Green Guides.
For example, Koss said, specific messages such as "Go Paperless, Save Trees," could be acceptable, but only if the claims are accurate, not misleading and backed up with scientific evidence.
On the other hand, the FTC advises marketers to avoid making broad statements such as "online banking helps the environment," which might be impossible to prove, she said.
"The more narrow the claim, the easier it is to substantiate," Koss said. "If you're going to make a specific environmental claim, make sure you have competent, reliable scientific information. If you're going to claim there's an environmental benefit, make sure it's a significant benefit."
Broad, generalized claims are difficult — or impossible — to prove, and often mislead consumers, she said.
If broad statements are made, they must meet rigorous requirements, according to the FTC guidelines.
“In other words, if you’re going to say that your product is going to save the planet, you have to qualify that claim with a specific benefit, and that qualification should be clear, prominent and specific,” Koss added. “When a marketer qualifies a general claim with a specific benefit, consumers understand the benefit to be significant. As a result, marketers shouldn’t highlight small or unimportant benefits.”
In addition, she said, if a qualified general claim conveys that a product has an overall environmental benefit because of a specific attribute, marketers should analyze the trade-offs resulting from the attribute to prove the claim.
In order for a broad claim such as "go paperless, save the planet" to be valid, according to the FTC guidelines, an organization would need to back it up with scientific evidence that analyzed the net environmental impact of paperless versus printed solutions, including e-waste and energy for electronic options, and paper mill pollution and transportation for print.
Koss pointed out that the FTC's Green Guides, revised in 2012, are guidelines, not enforceable regulations.
She said the FTC cannot offer clear cut answers for credit unions seeking guidance about marketing messages for paperless campaigns.
"The commission is not going to be able to give a definitive answer because it depends on the context of the message and how reasonable consumers will interpret the message," Koss said. "Every marketer needs to be cognizant that sometimes there may be an expressed or implied claim."
Although marketers should be cautious, they should not be discouraged from using clear, accurate environmental messages, according to sustainability experts and credit union leaders.
“I am not a lawyer, but I don’t think the saying “go paperless, save trees” needs significant scientific evidence to prove,” said Monica Touesnard, associate director of the Center for Sustainable Global Enterprise at Cornell University’s Samuel Curtis Johnson Graduate School of Management.
“The link between paper and trees is no secret,” said Touesnard, who has assisted Filene Research Institute with numerous sustainability studies. “It does not claim to save the planet or reduce emissions.”
Some credit unions say they already scrutinize green messaging to ensure validity.
"For AmeriCU, it's important to leave no room for doubt when it comes to any claims we make, including those about environmental efforts," said Judith Repass Cowden, vice president of member relations and marketing for the $1.3 billion institution in Rome, N.Y., which recently completed an Earth Day campaign to promote e-statements.
"That's why we took our eStatement campaign one step further. We purchased seedlings and helped three area colleges plant them on campus for Earth Day and Arbor Day. We backed up our claim with tangible action that was clearly beneficial to the environment and to the community, and helped us forge new relationships as well."
Because broad claims are difficult to substantiate, experts familiar with the FTC's Green Guides say credit unions should be as specific as possible.
"It would be better to state exactly how much is reduced by going paperless per some time period, like per year based on 12 annual statements or something like that, in my opinion," said Jonathan Storper, head of San Francisco law firm Hanson Bridgett's Sustainable Business Practice.
Although the guidelines are not enforceable regulations, the FTC has authority, under federal law, to sue organizations that make false, deceptive environmental claims.
Consumers and groups can file complaints with the FTC against misleading messaging.
In recent years, the FTC has filed lawsuits against numerous advertisers, primarily for false claims about products that were labeled biodegradable or organic, according to the FTC website and sustainability experts.
"FTC is concerned about misleading claims that a product is organic or natural, etc.," said Coro Strandberg, a former chair of the $17.5 billion Vancity Credit Union in Vancouver, British Columbia and author of the 2010 Filene Report "Credit Union Social Responsibility: A Sustainability Road Map.”
"I don’t think their concerns extend to companies stating their reduced demand for paper helps save trees,” Strandberg added.
Joshua Martin, director of the Environmental Paper Network, a trade industry group based in Asheville, N.C., said there has never been a successful claim brought to FTC related to eco-friendly messaging about paper.
An online search for FTC complaints against credit unions or banks did not discover any cases.
Martin said one method for credit unions to back up their environmental claims is to use tools such as the Paper Calculator, which was developed by Environmental Defense Fund.
Martin cautioned credit unions to pay close attention to their environmental messaging, but not to be intimidated by accusations of greenwashing recently hurled by a group funded by the paper industry.
Even non-profit groups have to abide by FTC guidelines.
For example, Greenpeace and Forest Ethics, a nonprofit forest protection service, filed two complaints in recent years against the Sustainable Forest Initiative, a non-profit group established by the U.S. timber industry in 1994, according to Peter Goldman, an attorney with the Seattle-based Washington Forest Law Center, which filed the complaints.
The complaints contend that SFI’s claim that it is an independent, non-profit public charity is deceptive and misleading, and that the group’s forestry certification standards were vague and approved by timber industry personnel.
“Whether dealing with non-profit organizations or for-profit businesses, the FTC needs to step up to the plate, provide some clarity and enforce its Green Guides,” Goldman told CU Times. “Otherwise, the public will continue to be confused and it will be impossible to determine what products are truly better for the environment.”