Green Claims Advisory: Coming Soon to a Marketing Department Near You

Green Claims Advisory: Coming Soon to a Marketing Department Near You

I have been thinking a lot lately about the sea change in policy and the role of government we are witnessing here in Washington with the new Administration and the current Congress.  While there is a much larger story to tell on that subject, it was a small story in today's Washington Post that caught my attention.  The FDA sent a warning letter to General Mills about marketing claims in connection with its Cheerios cereal product.  Cheerios packaging claims that by eating the cereal "you can lower your cholesterol 4 percent in six weeks."  General Mills has been making these kind of claims about the health benefits of soluble fiber from oats for some time, so why only now is the FDA rolling up its sleeves?  In an online article, a Washington Post writer subtly asks the same question and notes that the "science behind [General Mills'] claim seems to be fairly sound."  The story conjures up memories of the late 1970s when a Washington Post editorial labeled the Federal Trade Commission (FTC) the "National Nanny" for chasing after advertising promoting products with high sugar content aimed at children. Which brings me to my real point — one that hits closer to home for electrical manufacturers.

In the 1990's, the FTC published its "Green Guides" — Guides for the Use of Environmental Marketing Claims.  These guides addressed potential environmental "overstatements" and stated the principle that "an environmental marketing claim should not be presented in a manner that overstates the environmental attribute or benefit, expressly or by implication. Marketers should avoid implications of significant environmental benefits if the benefit is in fact negligible."  Specific guidance was provided with respect to general environmental claims ("environmentally friendly"), degradable/biodegradable claims, compostable claims, and recyclable/ recycled content claims, source reduction claims, refillable claims, and ozone friendly claims.  In late 2007, the FTC announced it would be looking to update its Green Guides and will focus on claims of "sustainability" and "renewability."  The FTC received public comments during January and February 2008, and later held a workshop on "green packaging" claims in April 2008.  It is expected that the FTC will update the Green Guides soon, in the summer of 2009.  It might be expected that revised Green Guides will address today's hot topics — "Green Building" claims and carbon reduction claims. 

Green marketing is serious business these days, a growing business — and it is a focus of competitive strategy.  The new Administration's energy and environmental programs can only be expected to stimulate this growing business even more.  Electrical products currently on the market provide energy conservation solutions for those who wish to reduce their "carbon footprint."  While the current version of the FTC's Green Guides have been around for over a decade now, there has been no FTC enforcement activity, and with the introduction of revised Green Guides and the priority the Administration is giving to energy efficiency and greenhouse gas emission reduction, companies should expect to see some enforcement activity, if only to raise the public visibility of the issue as the FDA has recently done with General Mills.  To date, according to one report, private enforcement, largely through the dispute resolution forum of the National Advertising Division (NAD) of the Council of Better Bureaus interpreting the Green Guides, has allowed competitors to argue the merits of whether green claims are "overstated."  This is how Sony's dispute with Panasonic over whether plasma televisions containing no lead or mercury were "environmentally friendly"  was resolved, and the NAD determined that catchphrase "environmentally friendly" was an overstatement because of their larger consumption of electricity compared to other televisions.  Panasonic was free to tout that it had eliminated mercury and lead from its product.  According to this same report, States might be expected to step into the fray as well.  The FTC's Green Guides have their foundation built upon its 1983 Advertising Substantiation Statement  , which require some substantiation be in hand providing a "reasonable basis" for a claim before making claims.  Companies making claims about energy efficiency and carbon reduction should ensure they have the supporting information for their claims on file and they are prepared to defend their representations, while at the same time paying attention to how the NAD has been resolving these types of disputes as well. 

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