FTC Seeking Comments on Green Guides; May Seek to Convert to Binding Regulation
The Federal Trade Commission (FTC) is updating its Green Guides (Guides), which provide guidance for marketers to avoid making unfair or deceptive environmental claims. The Green Guides—last revised in 2012—apply broadly to “claims about the environmental attributes of a product, package, or service in connection with the marketing, offering for sale, or sale of such item or service to individuals.” 16 C.F.R. § 260.1.
The Guides provide guidance on how consumers are likely to interpret certain claims and how marketers can substantiate environmental claims to avoid deceiving consumers. Although the Green Guides themselves are not binding, several states, including California, incorporate them into their laws. Compliance with the Guides may provide a safe harbor to enforcement by the FTC or by public prosecutors who enforce the Green Guides under state law.
The FTC published its notice in the Federal Register today, seeking comments on its review of the Green Guides. As discussed in our previous blog post, the FTC is updating the Guides as part of a ten-year review. The FTC is considering converting the Green Guides into a promulgated, binding regulation rather than guidance. Specifically, the FTC is seeking comments on whether it should “initiate a proceeding to consider a rulemaking under the FTC Act related to deceptive or unfair environmental claims.”
The Chair of the FTC, Lina M. Khan, has announced that she is “particularly interested” in receiving comments on “relatively emerging environmental topics.” The FTC is also seeking general comments on “the continuing need for the Guides, their economic impact, their effect on the accuracy of various environmental claims, and their interaction with other environmental marketing regulations.” In addition, it is inviting specific comments on:
- Carbon Offsets and Climate Change: The current Green Guides provide guidance on carbon offset and renewable energy claims. The FTC is particularly focused on climate change and carbon offset claims in its update, seeking comments on whether the revised Guides should provide additional information on related claims and issues. Specifically, it is interested in “net zero,” “carbon-neutral,” “low carbon,” and “carbon negative” claims.
- “Recyclable” and “Recycled Content”: The FTC is seeking comments on whether it should change the current threshold that guides marketers on when they can make unqualified recyclable and recycled content claims (in particular, “pre-consumer” and “post-industrial” content claims). In addition, it is inviting comments on whether the Guides should address in more detail claims for products that are collected by recycling programs but not ultimately recycled.
- Need for Additional Guidance: The FTC is seeking comments on the need for additional guidance on claims such as “compostable,” “degradable,” “ozone-friendly,” “organic,” “sustainable,” and those regarding energy use and energy efficiency. It is very likely that the revised Guides will provide guidance for “sustainable” claims. The FTC determined that it lacked a basis for specific guidance on sustainability claims when it last revised the Guides in 2012.
- Enforcement Uncertainty: Acknowledging its “strong track record of suing companies for deceptive environmental claims,” the FTC is seeking comments on how effective the Guides have been in providing certainty regarding FTC enforcement to companies making environmental claims. Specifically, the FTC is seeking comment on the extent to which the Guides have “reduced marketers’ uncertainty about which claims might lead to FTC law enforcement actions.”
Considering the current focus on ESG issues, as well as the amount of recent public enforcement and private litigation related to green marketing claims, this public comment period will draw substantial interest from industry as well as environmental and consumer NGOs.
Entities have 60 days to provide feedback on the Green Guides—comments are due on February 21, 2023. Companies making environmental claims may want to carefully consider how potential changes to the Green Guides may impact their practices and what types of revisions may be helpful or challenging in relation to their ESG strategies. Our team will continue to follow and report on developments in this area.
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© Arnold & Porter Kaye Scholer LLP 2022 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.