Watching What We Call Green

Continuing its discussion and examination of consumers’ perception of environmental marketing claims, the Federal Trade Commission (FTC) held another public workshop—this time, to specifically cover green claims in the building marketplace—on July 15, 2008, in Washington, D.C. ¹ This was the third public workshop conducted by the FTC since its acknowledgement in late 2007 that the current “Guides for the Use of Environmental Marketing Claims”—commonly known as the Green Guides—should be updated to reflect changes that have occurred in the marketplace since the current Guide’s publication in 1998. Earlier workshops held this year discussed marketing of carbon offsets and green packaging.

Panelists at the July workshop spoke on a variety of topics regarding common environmental marketing claims, including the use of “green” logos and third-party certifications and seals. In particular, they examined areas where it is believed a typical consumer may be misled by such practices, either because the claims are misleading or unsubstantiated. Participants were asked to discuss consumer perception problems arising from commonly evoked green phrases such as “environmentally friendly,” “sustainable,” and “renewable,” suggesting that the revised Guide will cast special attention upon such usage, much in the way the current version treats claims about “recycled” or “environmentally friendly” product formulation.

The goal of the FTC and the Green Guides is not to establish numerical standards for environmental performance or to prescribe testing protocols for manufacturers in the green marketplace. Instead, the FTC looks at ads from a typical consumer’s perspective and imagines how he would interpret common environmental claims. The Guides, then, are built upon the meaning that a reasonable consumer would give to such claims. Manufacturers and marketers making claims that fail upon this “reasonable consumer” test run the risk of facing legal action. “Under Section 5 of the FTC Act, the Commission can bring an enforcement action [upon the manufacturer], by way of the Department of Justice,” says Janice Frankle, an attorney for the Division of Enforcement at the FTC’s Bureau of Consumer Protections.

The FTC has observed that green claims—and unsubstantiated green claims—increased dramatically during the housing boom, and are now prevalent in a wide range of building products, such as flooring, carpeting, paint, wallcovering, insulation, and windows, as well as for buildings and houses overall. Until the guidelines catch up with the market and current marketing trends, industry awareness of and regard for the Guides will remain low. The revised Green Guides are expected to include additional specific guidance and examples of how the statutory requirements apply to green building, design, and construction claims.