Environmental groups, industries and individuals are jostling to sway the Federal Trade Commission as the regulator mulls revising guidelines that shape how far companies can go in portraying themselves and their products as environmentally friendly.
An update of the so-called Green Guides, for the first time in more than a decade, would have sweeping impact. Beyond clarifying what should be advertised as “organic” or “recyclable,” the guides influence state laws on marketing fraud, and even how plaintiffs hurl accusations of greenwashing at multinationals.
It also comes amid colossal shifts in climate marketing, consumer perception and science, and as the Biden administration pushes agencies to address climate change while politicians, industries and activists battle over regulators’ roles.
“The more confusion there is around what’s real and what’s not, and what’s greenwashing and what’s not, the more exasperated consumers will get,” said Hana Vizcarra, a senior attorney at Earthjustice, a nonprofit public-interest environmental law organization.
Nearly 3,500 individuals, associations and companies have submitted comments on the guides since December, and the FTC has posted more than 800 of them online. A partial review shows that mix of consumer and activist frustration, alongside corporate calls for clearer guidance that aligns with laws across the US and the globe.
The agency is also seeking public input on whether there should be new mandatory rules, instead of merely advisory guidelines. Such a step could give the commission new power to dictate and enforce compliance, and has environmental activists cautiously optimistic.
“The reality is that right now these guides give the FTC broad authority, but also broad discretion,” said Josh Eisenfeld, a spokesman for Earthworks, an environmental nonprofit that cited the Green Guides last year in a complaint against oil and gas giant
Instructive, not Punitive
The Green Guides, first issued in 1992, are supposed to help companies avoid making deceptive environmental marketing claims under Section 5 of the FTC Act or other laws. For example, the current 36-page document, approved in 2012, asserts that labeling a trash bag as “recyclable” is deceptive because the bag will most likely end up in a landfill or incinerator.
The guides are meant to be instructive rather than punitive. Still, their influence has spread over the past three decades.
Maine, Minnesota, New York and Rhode Island are among the states that adopted the Green Guides to help define their own laws against fraudulent consumer marketing. California and other states incorporated compliance with them as a valid legal defense for companies sued over their marketing.
Even if the guides aren’t law, companies try to follow the advice closely, said Jeffrey Greenbaum, an advertising lawyer who submitted a comment to the FTC for the International Advertising Association.
“We treat it like it is law,” he said in an interview.
The FTC has authority to take actions against companies making deceptive environmental claims.
Just last week, the FTC sent a warning shot to more than 700 companies about backing up their health-related product claims.
Companies also face the specter of lawsuits over greenwashing, the practice of intentionally exaggerating their environmental efforts. The Sierra Club brought such a suit against
What can be called “recyclable” is a topic the FTC has signaled it wants to shed light on. The regulator will dig into the term specifically at a public workshop it’s scheduled to host in May, “Talking Trash at the FTC.”
‘Full-time Job’ for Consumers
The commission launched the process at the end of last year to update the guides, it said, “based on increasing consumer interest in buying environmentally friendly products.”
The thousands of comments submitted since then—the agency extended its original February deadline to April 24—has demonstrated that many consumers see red when it comes to corporate green claims.
“Companies are lying to us, and reaching our climate goals requires transparency and effort on all accounts,” said a comment signed by a person named Star Hyams.
Another, signed by Minnesota resident Erica Olson, said: “We need to be vetting these claims more because it feels like a full-time job having to keep up to date on companies who actually align with my values.”
Some environmental groups launched efforts to generate comments. “Because this is a consumer issue, we thought it might be helpful if consumers are specifically writing in to demonstrate the breadth of the issue,” said Camille Sippel, an attorney for the environmental law group ClientEarth, which created a template letter for people to submit.
Donna Twickler, a retiree who worked for decades at the Environmental Protection Agency, told Bloomberg Law that she sent in such a form asking for more “accuracy and transparency” in marketing claims because misleading and potentially damaging information has left consumers frustrated and distrustful of information in general.
The FTC will likely rely heavily on comments that are backed up with empirical evidence, including consumer perception studies, said Kathleen Benway, a former FTC lawyer and partner at Alston & Bird. She also noted that crafting the new guides will be “a big lift,” considering the FTC’s limited staff to review comments.
Still, the revisions should give consumers and environmental activists fresh ammunition to bring challenges and lawsuits.
Companies use science-based terms in different ways, activists say, and shouldn’t be able to use the same words to mean two disparate things.
For instance, some companies use “net-zero” to describe the emissions for individual facilities, while others are referring to the emissions from their entire operations.
The FTC has homed in on such claims, signaling the need for additional guidance on terms such as “compostable,” “organic” and “sustainable,” as well as consumer perception research of climate change-related descriptions like “low carbon.”
Other complaints point out how climate advertising plagues consumers on far more platforms than it did a decade ago—from annual reports to billboards, websites and social media. The evidence looks striking: Harvard researchers published a report last year that said 72% of social media posts by European oil and gas companies engaged in greenwashing.
Earthworks’ complaint about Chevron argued that the company uses Twitter to convince average people that they care about the climate crisis “without, of course, actually doing anything or even acknowledging that it is their fault in the first place.”
The FTC hasn’t publicly responded to the organization’s complaint and Chevron did not respond to a request for comment.
No Tricks
Companies and trade organizations have a different set of goals with the new guides, namely getting clearer rules so they know where to draw the line.
The Biotechnology Innovation Organization, an advocacy group for the biotech industry, asked the FTC in a two-page letter to provide “adequate guidance to marketers” who want to make a “sustainable” claim. It also asked for guidance on the term “organic” so product developers and marketers “have concrete standards to follow.”
Corporate lawyers say it’s certainly not in the long-term interest of a company to deliberately make dubious statements to reel in environmentally conscious customers.
“They’re not interested in tricking a consumer to buy a product once,” said Greenbaum, the International Advertising Association lawyer. “That’s just not how you build a relationship with customers, and it’s not how you build a brand.”
His FTC comment cited an IAA study that said it found sustainability “is a large driver of brand value.”
Other research backs this up. A McKinsey study published in February showed that, in two-thirds of product categories from candy to condiments, products that made ESG-related claims grew faster than those that didn’t.
There are also practical issues in play for businesses navigating the hodgepodge of restrictions across states and countries. Some businesses might face costs for rebranding products or labeling them separately, depending on where they are sold.
Multinationals will also need to take proposed rules into account, as the European Commission has proposed a law that would require companies to substantiate their green ads, noting that half of all environmental claims offer “weak or non-existent verification.” Trade organizations and environmental groups alike have asked the FTC to align the Green Guides with these rules and others.
It’s not clear when the revised guides could take effect, but the last update took about two years from the time the FTC opened the comment period in 2010.
Anne Austin, an environmental lawyer at Pillsbury Law, said the agency’s solicitation for feedback on whether it should create separate regulations “is no small thing.”
But Benway, the former FTC lawyer, noted that it can take several years to get such authority approved, and a revision of the Green Guides would be faster. The regulator “will want to get something out as quickly as they can,” she said.
Overall, both industries and activists are hoping that the update will better define how to navigate today’s environmental marketing boom.
“Corporate engagement and commitment has grown, but the disclosure and transparency continues to be muddled and not well defined,” said Vizcarra, the Earthjustice lawyer. “It’s a good opportunity for the FTC to think through what’s missing.”
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