At the end of 2022, the U.S. Federal Trade Commission (FTC) announced it would review its guidelines for making environment-related marketing claims, aka the Green Guides. These guides were first issued in 1992 and most recently updated in 2012; this update will be the fifth iteration of the Green Guides. Following is a synopsis of the current guides, as well as examples of issues that have generated increased interest in recent years, and for which the FTC is seeking feedback. Furthermore, excerpts from cosmetic industry comments and suggestions for the Green Guides are provided.
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At the end of 2022, the U.S. Federal Trade Commission (FTC) announced it would review its guidelines for making environment-related marketing claims, aka the Green Guides. These guides were first issued in 1992 and most recently updated in 2012; this update will be the fifth iteration of the Green Guides. Following is a synopsis of the current guides, as well as examples of issues that have generated increased interest in recent years, and for which the FTC is seeking feedback. Furthermore, excerpts from cosmetic industry comments and suggestions for the Green Guides are provided.
The author also speculates what brands might expect from future guidance. Note: the information provided should not be construed as legal advice.
As an aside, the update is still in progress, so the issues raised do not necessarily indicate forthcoming changes to the Green Guides. However, since they have drawn interest, these areas may be worth reviewing as brands consider eco-related claims moving forward.
FTC Authority
For context, in the United States, the FTC is the only federal agency with both consumer protection and competition jurisdiction in broad sectors of the economy. Per the agency’s website,1 it:
- Pursues vigorous and effective law enforcement;
- Advances consumers’ interests by sharing expertise with federal and state legislatures and U.S. and international government agencies;
- Develops policy and research tools through hearings, workshops and conferences; and
- Creates practical and plain-language educational programs for consumers and businesses in a global marketplace with constantly changing technologies.
The FTC’s work is carried out by the Bureaus of Consumer Protection, Competition and Economics, aided by several offices. The focus of the Bureau of Consumer Protection, in particular, is to stop unfair, deceptive and fraudulent business practices by collecting reports from consumers and conducting investigations; suing companies and people that break the law; developing rules to maintain a fair marketplace; and educating consumers and businesses about their rights and responsibilities.2
Green Guides Purpose
The FTC’s Green Guides3 apply to advertising and labeling claims made in the U.S. about the environment-related attributes of a product, package or service. These provide guidance for specific claims and general principles, and they lay out a framework for how consumers are likely to interpret them. The guides aim to help marketers avoid making unfair or deceptive claims and while they are not industry-specific, much of the guidance is particularly applicable to claims made in the beauty and personal care sector.
General Principles
The FTC advises marketers to ensure all reasonable interpretations of their claims are truthful, not misleading and supported by a reasonable basis before making a claim. For environment-related marketing claims, a reasonable basis often requires competent and reliable scientific evidence.
The Green Guides outline the following general principles that apply to all environmental marketing claims:
- Qualifications and disclosures — To prevent deceptive claims, qualifications and disclosures should be clear, prominent and understandable;
- Distinction between benefits of product, package and service — Unless it is clear from the context, an environmental marketing claim should specify whether it refers to the product, the product’s packaging or service, or a portion of the product, package or service;
- Overstatement of environmental attribute — An environmental marketing claim should not overstate, directly or by implication, an environmental attribute or benefit; and
- Comparative claims — Comparative environmental marketing claims should be clear and avoid consumer confusion about the comparison. Marketers should also have substantiation for the comparison.
The Green Guides also caution against making general environmental benefit claims – i.e., using terms like eco-friendly, which likely conveys that a product has far-reaching environmental benefits and may even indicate that the product has no negative impact. According to the FTC, these types of claims are difficult, if not impossible, to substantiate and may be considered deceptive.
Individual Claims
The current Green Guides also offer guidance to brands and marketers seeking to make specific claims about their product, package or service. Much of this centers around how to qualify claims in such a way as to avoid deceiving consumers and violating FTC rules. The following is an overview of the claims.
Carbon offsets: Given the complexities of carbon offsets, brands should employ competent and reliable scientific and accounting methods to properly quantify claimed emission reductions.
Certifications and seals of approval: Because it is highly unlikely that marketers can substantiate general environmental benefit claims, marketers should not use environmental certifications or seals that do not convey the basis for the certification.
Compostable: The claim compostable should have appropriate evidence that all the materials in the item will break down into, or otherwise become part of, usable compost in a safe and timely manner in a composting facility or in a home compost pile or device.
Degradable: The claim degradable should have appropriate evidence that the entire item will completely break down and return to nature in a reasonably short period of time after disposal.
Free-of: This refers to the claim that a product, package or service is free of, or does not contain or use, a specific ingredient or substance. Such claims may still be considered deceptive if the product, package or service contains or uses substances that pose the same or similar environmental risks as the substance that is not present; or the substance has not been associated with the product category.
Non-toxic: Non-toxic claims should provide appropriate evidence that the product, package or service is non-toxic for both humans and the environment.
Ozone-safe and ozone-friendly: Claims related to the safety of the atmospheric ozone layer are deceptive if the product contains any ozone-depleting substances, including chlorofluorocarbons.
Recyclable: A product or package should not be marketed as recyclable unless it can be collected, separated or otherwise recovered from the waste stream through an established recycling program for re-use or use in manufacturing or assembling another item.
Recycled content: An item marked as containing recycled content must be composed of materials that have been recovered or otherwise diverted from a waste stream, either during the manufacturing process (pre-consumer) or after consumer use (post-consumer). For items that are partially made of recycled material, the claim should include the amount or percentage, by weight, of recycled content in the finished product or package.
Refillable: A brand should not make an unqualified refillable claim unless the means for refilling the package is provided, either through a collection and refill system or by offering a product that consumers can purchase to refill the original package.
Renewable energy: Brands should not make unqualified renewable energy claims if fossil fuels or electricity derived from fossil fuels are used to manufacture any part of the advertised item, or are used to power any part of the advertised service, unless the brand has matched such non-renewable energy use with renewable energy certificates.
Renewable materials: Claims that a product or package is made with renewable materials (excluding minor components) should identify the material used and explain why the material is renewable. They should also include qualifications unless the item is made entirely with renewable materials.
Source reduction: Source reduction claims should clearly identify the amount of the source reduction and the basis for any comparison.
A Work in Progress — Additional Input Sought
As part of the review of the Green Guides, the FTC opened a public comment period4 during which interested parties could provide input such as: whether there was a continuing need for the Green Guides, their effect on preventing deceptive environmental marketing claims and data on consumer perception of environmental claims. Since the standards in the Green Guides are not independently enforceable, the FTC also asked whether it should consider establishing enforceable requirements to address unfair and deceptive environmental claims.
Furthermore, the FTC sought comments on specific environmental marketing claims that have generated increased interest in recent years. Many of these are frequently used in the beauty sector. Examples include the following (see the Federal Register for the complete list).5
Carbon offsets and climate change: The FTC is seeking evidence for deceptive claims in the market, if any, that relate to climate change and if so, suggestions for guidance it can provide to marketers. In relation, the commission is interested in research related to consumer perception of climate change-related claims such as net zero, carbon neutral, low carbon and/or carbon negative.
Degradable: In terms of scientific evidence supporting the claim that a product is degradable, the FTC currently defines the required “reasonably short period” as one year. The agency is seeking input on whether this time frame is appropriate, and whether this should differ for liquid products.
Recyclable: For an unqualified “recyclable” claim, per the current guides, recycling facilities must be available to at least 60% of consumers where a product is sold. The commission is interested in whether this threshold should be revised and, if facilities are more limited, whether qualifications such as “may not be recyclable in your area” should be employed.
The FTC also requested input on whether this 60% threshold was appropriate and whether additional guidance on unqualified “recyclable” claims was needed. Furthermore, the commission is seeking input on whether recyclable claims made for items collected by recycling programs for a substantial majority of consumers or communities but not ultimately recycled due to market demand, budgetary constraints or other factors, require guidance.
Recycled content: For products partially made of recycled material, the current Green Guides advise brands to clearly and prominently qualify claims. For example, if 40% of a shampoo bottle’s weight were composed of post-consumer resin, the brand could claim it contains 40% PCR but should avoid the claim made of PCR, which has a greater potential to deceive consumers.
In the request for comment, the FTC also sought feedback on whether additional methods of recycled content calculation were appropriate and what additional guidance was needed. For example, instead of claims based on per-product or annual weighted average calculation methods, should they be based on mass balance calculations, certificate (i.e., credit or tagging) systems, or other methods.
Energy use/energy efficiency: The FTC also questioned whether guidance should be added on energy use or efficiency claims.
Organic, sustainable: While the FTC again deferred weighing in on the use of the term natural, it requested input on whether guidance should be provided for the terms organic or sustainable.
Cosmetics Industry Feedback and Next Steps
The FTC’s open comment period for the Green Guides closed on April 24, 2023, and the commission received thousands of comments from individuals, companies, organizations and other interested parties.6 Select excerpts from cosmetic industry examples include the following (bolding added for emphasis).
WE ACT for Environmental Justice (WE ACT): WE ACT is a nonprofit group focused on empowering low-income and/or communities of color to build healthy communities. Among other initiatives, it educates members on how to identify toxins and greenwashing claims. The organization commented to the FTC as follows.7
…The issue is that anyone can create an eco-label and claim that the ingredients in their products are “natural,” “organic,” “sustainable” or “clean.” Since the fashion and beauty industry lack mutually recognized definitions, benchmarks or requirements, any brand can market their products to consumers as “eco-friendly.” This lack of regulation gives brands the freedom to define the terms “clean” and “sustainable” based on their own standards and with little consequence if not accurate.
Given the impact of greenwashing and misleading claims pervading the fashion and beauty markets, WE ACT offers the following considerations and recommendations…
- A regulatory review of the Green Guides will send a clear market signal that there will be more regulatory adherence against misrepresentation of product ingredients and baseless claims about the environmental benefits. Even more, a regulatory review will improve consumer safety ensuring that environmental claims are accurate. …
- The FTC should evaluate the level of substantiation required for attaching environmental claims on products, particularly those related to personal care. Using current research, the FTC must begin to place definitions, benchmarks and standards so that brands can have guidelines and requirements instructing on how to categorize products claiming an environmental benefit.7
NATRUE: The international natural and organic cosmetic association NATRUE welcomed the continuation of the Green Guides and the ability to comment on claims such as organic.8
…Adapting the [Green] Guides to the evolving market and its trends to counter deceptive or unfair environmental claims for cosmetic product claims, such as “organic,” is essential for consumers to avoid greenwashed products and support a level playing-field for manufacturers.
…In terms of the claim “organic” for non-foods, we would see that, just like food, the ingredient and product claim must be underpinned by third-party certification. For an organic cosmetic claim to uphold its integrity and consistency with consumer expectations from foodstuffs, products must be substantiated by defined organic content, and must include a list of unacceptable substances (e.g., neither natural nor organic substances should be produced from or by GMOs).
…Nevertheless, for an organic cosmetic claim to operate practically it needs to be distinguishable from food in terms of the criteria to qualify the claim. To this end, the claim organic cosmetic should accommodate a broad product diversity to ensure neither manufacture’s capacity to innovate nor consumers choice is restricted; thereby accommodating organic cosmetic claims ranging from body oils to shampoos to sun care.8
Personal Care Products Council (PCPC): The PCPC shared several suggestions for the Green Guides; following are just a few examples.9
…Due to the increasing use of digital technology, it would be beneficial for the FTC to allow marketers to use digital technology, such as QR codes or any other applicable digital technology, on packaging to supplement environmental marketing claims.
…We are aware of other federal, state and local initiatives, but prefer the framework of the Green Guides as providing coherent and useful claims guidance at a national level. … If thoughtfully revised and updated, the Green Guides could help eliminate the potential of future conflicting state and local legislative or regulatory action.
…With the proliferation of climate related claims, industry would benefit from robust guidance around climate change and carbon neutrality [claims]. The FTC should consider adding “net zero,” “carbon neutral,” “low carbon” and “carbon negative” examples to the Green Guides. The FTC should also define these terms to limit the potential for deceptive claims.
…The FTC should define “degradable,” “biodegradable,” “oxo-degradable,” “oxo-biodegradable” or “photodegradable” to limit the potential for deceptive claims. Both ISO and ASTM provide definitions in these categories which may be relevant to use.9
Unilever: Unilever applauded the Green Guides for establishing a standard framework for communicating truthful, accurate and substantiated environmental claims. The company’s suggestions included the following.10
…Environmental claims can refer to environmental attributes or impacts of a product and packaging, specific components of a product or packaging, business operations or service. We encourage the commission to consider the context of the various applications of a particular environmental claim and whether the current guidance, with respect to substantiation or communication, requires further clarification or modification depending on the context.
…Unilever encourages the commission to further expand Section 5 of the Green Guides by including additional examples of compliant and non-compliant practices. In particular, the industry would benefit from examples in areas that have emerged since the last update, such as carbon reduction and net zero.
…In recent years, there has been increasing interest in both “greenwashing” and “green hushing,” which are new terms that represent … the see-saw of public sentiment and interest both for and against environmental marketing claims. …The Green Guides should be modified to address exaggeration and to incentivize accuracy in consumer labeling by providing clarity to avoid misleading marketing environmental claims.
…Since the last edition of the Green Guides, new “advanced” processing technologies have emerged, along with new “recycling” terminology. We request that the commission evaluate the various “advanced” processing technologies and develop guidance clarifying the appropriate claims and necessary qualifications for each processing technology. … For example, some “advanced” processing technologies such as “plastic waste-to energy,” even though they address a piece of the plastic waste problem, should not be described or identified as “recycling.” Rather, plastic waste-to-energy should be considered a type of energy recovery.
Procter & Gamble Co. (P&G): Finally, P&G expressed support for revisions to the Green Guides to provide further clarity and help advance the common objective of protecting consumers from misleading claims.11 Its comments included the following.
…“Compostable” claims should only be made for materials that are capable of being broken down into, or otherwise become part of, usable compost in a safe and timely manner without releasing toxicants. We recommend the commission reflect in the Green Guides that unqualified “compostable” claims be limited to materials that are capable of being broken down in largescale composting facilities and home composting systems.
…We recommend the commission add guidance to allow a “compostable claim” even if a minor incidental component of the item is not compostable, so long as the minor incidental component is easily removable or doesn’t significantly impede ability to compost the item.
…We recommend the commission provide in the Green Guides an allowance for making “recycled content” claims based on alternative methods, including mass-based allocation. Mass balance accounting is a method that allocates the amount of chemically recycled feedstock to specific customers via a bookkeeping process, similar to Renewable Energy Certificates (RECs). Once a volume has been allocated to a customer, a chain of custody system (i.e., documentation) is used to track and transfer ownership of the recycled resin down the value chain. The customer can consider a certain recycled content in the customer’s products and packages up to the allocated volume.
…Use of such alternative methods to claim credit for recycled content drives manufacturers’ use of recycled materials over fossil fuels or virgin plastic. Advanced recycling may lead to the recycling of plastics that are not recyclable through traditional means.11
P&G on “natural” claims: P&G additionally emphasized the need for the Green Guides to define the claim natural.11
…We believe it is in the best interest of the consumer if the commission defines “natural” in the Green Guides to provide standardization and substantiation to this ubiquitous claim in today’s marketplace. A “natural” product is one “composed of 100% natural ingredients.” …[These] occur in nature and are unprocessed or have narrowly defined processing that does not significantly alter the original physical, chemical or biological state of the ingredients. Botanic (plant), inorganic-mineral (not organic-mineral), animal origin, microorganisms, their mixture, and/or their “reaction products” with each other are all examples of natural ingredients.
Example processes that would comply with this definition of “natural,” per P&G, were:
- Physical or mechanical processes (e.g., dehydration, extraction, extrusion, centrifugation, filtration, distillation, grinding, sieving, compression, percolating, adsorptive techniques, freezing, drying, milling, lyophilization, formation of a tincture or a solution in water, a slurry, a powder or a solid in suspension);
- Microbiological (e.g., fermentation);
- Enzymatic methods without chemical modification of the ingredient;
- • Traditional processes used to make food edible or to preserve it or to make it safe for human consumption (e.g., smoking, roasting, freezing, drying);
- Application (e.g., fumigation) of pesticides or fertilizers; and
- Other procedures of prep.11
In addition to reviewing these and other comments, the FTC is hosting workshops on key areas of concern for the Green Guides. The first public workshop, held in May, was focused on recyclable claims and covered topics including the current state of recycling practices, recycling-related advertising in the U.S. and consumer perception of current and emerging recycling-related claims. The transcript from the discussion underscored the fact that the Green Guides are not about environmental policy, but rather the related claims to ensure they are not deceptive to consumers. Feedback from workshop panelists revealed a variety of industry opinions in this area.12
Future Outlook
As consumers increasingly demand clear and consistent information to facilitate sustainable purchasing decisions, the FTC will follow suit with increased clarifications and specifications to improve guidelines for environment-related marketing claims. Moving forward, brands are advised to focus on specific claims and the new or emerging standards and technologies to help substantiate such claims.
For now, brands should maintain awareness of the current Green Guides – especially claims that cover general environmental benefits, which can easily deceive consumers. Interested parties will still have opportunities to provide input on the Green Guides throughout 2023 and potentially into 2024, ultimately helping to shape the next iteration of guidelines for environment-related product claims.
References
- FTC. (Accessed 2023, Jun 2). About the FTC. Our mission. Available at https://www.ftc.gov/about-ftc
- FTC. (Accessed 2023, Jun 2). Bureau of Consumer Protection. Available at https://www.ftc.gov/about-ftc/bureaus-offices/bureau-consumer-protection
- FTC. (2012, Oct 11). Green Guides. Available at https://www.ftc.gov/sites/default/files/documents/federal_register_notices/guides-use-environmental-marketing-claims-green-guides/greenguidesfrn.pdf
- Cosmetics & Toiletries. (2022, Dec 15). Avoid deceptive Eco Claims by Helping FTC Shape the Green Guides. Available at https://www.cosmeticsandtoiletries.com/regulations/claims-labeling/news/22605071
- Federal Register. (Accessed 2023, Jun 2). Guides for the use of environmental marketing claims. Available at https://www.federalregister.gov/documents/2022/12/20/2022-27558/guides-for-the-use-of-environmental-marketing-claims
- Regulations.gov. (Accessed 2023, Jun 2). FTC seeks comments on Green Guides review, matter no. P954501. Available at https://www.regulations.gov/docket/FTC-2022-0077/comments
- Regulations.gov. (Accessed 2023, Jun 2). WE ACT for Environmental Justice comments on Green Guides review, matter no. P954901. Available at https://downloads.regulations.gov/FTC-2022-0077-0956/attachment_1.pdf
- Regulations.gov. (2023, May 8). Comment from NATRUE AISBL, the international natural and organic cosmetic association. Available at https://www.regulations.gov/comment/FTC-2022-0077-1229
- Regulations.gov. (2023, Apr 23). Personal Care Products Council comment on Green Guides review, matter no. P954501. Available at https://downloads.regulations.gov/FTC-2022-0077-0943/attachment_1.pdf
- Regulations.gov. (2023, Apr 24). Unilever comments on Federal Trade Commission review of Green Guides for use of environmental marketing claims, matter no. P954501, docket no. FTC-2022-0077. Available at https://downloads.regulations.gov/FTC-2022-0077-1270/attachment_1.pdf
- Regulations.gov. (2023, Apr 24). P&G comments on Green Guides review, matter no. P954501. Available at https://downloads.regulations.gov/FTC-2022-0077-1262/attachment_2.pdf
- FTC. (2023, May 23). Talking trash at the FTC: Recyclable claims and the Green Guides. Available at https://www.ftc.gov/system/files/ftc_gov/pdf/Talking-Trash-at-the-FTC-Recyclable-Claims-and-the-Green-Guides.pdf
