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FTC Updates Guidance for Marketing of Green Products and Services

Companies marketing their services or products as “environmental friendly” will have to qualify their statements, in light of the Federal Trade Commission’s (FTC) newly updated Guides for the Use of Environmental Marketing Claims.  Last revised in 1998, the 2012 “Green Guides” describe the types of claims the FTC may or may not find deceptive.  Although, the guides themselves are not independently enforceable, the FTC can take enforcement action against deceptive claims.

 

Whereas much of the Green Guides focus on the types of environmental marketing claims more commonly used with manufactured products–such as degradable or recycled–the Green Guides also include two new sections that should be of interest to all professionals that market their environmental services, including those employed by the construction industry.  First, the FTC states that it is deceptive to claim that a service offers a general environmental benefit such as “environmentally or eco-friendly,” because these claims are difficult for the consumer to interpret.  Instead, marketers should qualify broad statements with specific language about the benefits.  The Green Guides do not provide examples of qualifying statements for professional services, much less for green building or construction services.  However, a good starting point is to ask the question: What makes it green?  Is it the number of knowledgeable professionals in the company or experience with past successes?  Is it having in place company policies and procedures that facilitate green building?  If so, be specific.  Break apart any broad environmental claims into statements that are defensible and descriptive using language that is “clear and prominent” to avoid making deceptive environmental claims.

The second noteworthy area relates to the proper use of certifications and seals of approval to avoid misrepresenting that a product or service has been endorsed by an independent third party.  Green seals are commonly used in the marketing of building materials and products, as well as services.  A marketer’s use of the name, logo or seal of approval of a third-party certifier or organization should meet the criteria for endorsements provided by the FTC’s Endorsement Guides.  The Green Guides further caution the marketer to avoid broad environmental claims conveyed by environmental seals or certifications, specifically stating: “To avoid deception, marketers should use clear and prominent qualifying language that clearly conveys that the certification or seal refers only to specific and limited benefits.”  Once again, the examples provided relate more to products than services, but it is possible to glean some insight from them, especially Example 5 included below that cautions against using membership in an organization to imply that organization’s endorsement of product or service.

A marketer’s industry sales brochure for overhead lighting features a seal with the text “EcoFriendly Building Association” to show that the marketer is a member of that organization. Although the lighting manufacturer is, in fact, a member, this association has not evaluated the environmental attributes of the marketer’s product. This advertisement would be deceptive because it likely conveys that the EcoFriendly Building Association evaluated the product through testing or other objective standards. It also is likely to convey that the lighting has far-reaching environmental benefits. The use of the seal would not be deceptive if the manufacturer accompanies it with clear and prominent qualifying language: (1) indicating that the seal refers to the company’s membership only and that the association did not evaluate the product’s environmental attributes; and (2) limiting the general environmental benefit representations, both express and implied, to the particular product attributes for which the marketer has substantiation. For example, the marketer could state: “Although we are a member of the EcoFriendly Building Association, it has not evaluated this product.  Our lighting is made from 100 percent recycled metal and uses energy efficient LED technology.”

Specifically, the Commission modified the sections for: General Environmental Benefit, Compostable, Degradable, Ozone, Recyclable, and Recycled Content.  Additionally, the Commission added the following sections: Carbon Offsets, Certifications and Seals of Approval, Free-of, Non-toxic, Made with Renewable Energy, and Made with Renewable Materials.  The Green Guides do not address use of the terms “sustainable,” “natural” and “organic.”

Read the Green Guides in the Federal Register or on the FTC website.  For more information, please contact AGC’s Melinda Tomaino, director of green construction, at tomainom@agc.org.

This article does not provide professional or legal advice.  AGC encourages members to read the Green Guides when considering how to best market their environmental services.  Company-specific questions should be addressed to a retained professional.

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