FTC Proposes Revisions to Green Guides
Yesterday the Federal Trade Commission proposed revisions to its Green Guides – “the guidance that it gives marketers to help them avoid making misleading environmental claims.” The Green Guides were first issued in 1992, but have not been changed since 1998. According to the FTC, one reason for the proposed revisions is to “provide new guidance on marketing claims that were not common when the Guides were last reviewed.” In particular, the proposal provides guidance on claims that relate to climate change, including carbon offset and renewable energy claims.
In its summary of proposed changes, the FTC makes the following proposal regarding carbon offset claims:
- Marketers should have competent and reliable scientific evidence to support their carbon offset claims, including using appropriate accounting methods to ensure they are properly quantifying emission reductions and are not selling those reductions more than once.
- Marketers should disclose if the offset purchase funds emission reductions that will not occur for two years or longer.
- Marketers should not advertise a carbon offset if the activity that forms the basis of the offset is already required by law.
The FTC also warns that “unqualified” renewable energy claims should not be made “if the power used to manufacture any part of the product was derived from fossil fuels.”
We previously reported that FTC’s revisions to the Green Guides could be relevant for “green” building claims. The proposed revisions were based, in part, on a workshop focused on Green Building and Textiles. An earlier workshop considered carbon offsets and renewable energy certificates. The FTC’s proposal contains specific discussion of both appropriate and potentially misleading claims regarding “green building” certifications and affiliations.
The FTC is accepting public comments to its proposed revisions through December 10, 2010. Additional posts on greenwashing claims and Green Guides can be found here.
Consumer groups call for FTC to use consistent and comparable fuel economy ratings in advertising guide
In April, the Federal Trade Commission (FTC) proposed amendments (74 Fed. Reg. 19,148) to its Fuel Economy Advertising Guide, in order to make it consistent with Environmental Protection Agency’s fuel economy ratings. A collective of consumer advocacy groups, including Consumer Federation of America, Consumer Action, and Consumers for Auto Reliability and Safety submitted their comments to the proposed revisions. Central to the consumer groups’ concerns is that advertising assist consumers in making informed decisions when buying vehicles. A significant factor in accomplishing this goal is to make published, consistent, and fully disclosed fuel economy ratings readily accessible to the consumer.
In response to the Guide’s indication that any combination of city, highway, and combined fuel economy may be used, the consumer groups urge that advertising should use only the combined city and highway fuel economy rating. The consumer groups warn against advertisers having a choice which rating to use as this impedes consumers’ ability to easily make ready and accurate comparisons between advertised vehicles.
Similarly, the consumer groups urge against allowing advertisers to make fuel economy claims based on non-EPA information, even when the advertising fully discloses that it is a non-EPA estimate. The consumer groups explain that allowing use of the non-EPA estimates in advertising will prevent comparison to the EPA ratings, which will defeat consumers’ ability to compare advertising information.
“Not only do consumers need a reliable and clear mechanism to assess fuel efficiency when shopping for a vehicle, but the presence of mileage ratings in the market provides a strong competitive incentive for fuel economy improvements overall,” said Jack Gillis, CFA's Director of Public Affairs and author of The Car Book
In response to the Guide’s indication that an estimated cruising range may be used for alternative fueled vehicles, the consumer groups support efforts by the FTC to provide comparable performance information to consumers. The consumer groups recommend an easily understood and comparable “fuel economy equivalent” system, like the miles per gallon fuel economy estimates, possibly based on kilowatt hour.
Finally, the consumer groups strongly recommend requiring the posting of EPA estimated combined fuel economy in all vehicle advertisements.
FTC updating Green Guides, which govern environmental building claims
Original post available at www.constructionweblinks.com.
The Federal Trade Commission’s Green Guides, which govern environmental marketing claims, will be updated this year. The Green Guides are the FTC’s primary tool for preventing consumer deception in the ever-expanding arena of environmental claims. The manual was last updated in 1998. This year’s version will clarify the legal parameters for environmental promises made to consumers and business clients.
The Green Guides are intended to prevent “greenwashing” – claims of environmental superiority or benefit that are untruthful or misleading. Companies may engage in greenwashing in an effort to sell more products or to bolster their reputation with consumers.
The revised Green Guides will address questions such as:
- What does it mean to promise that a product or service is “green” or “sustainable”?
- What steps has a company taken to earn a third-party certification or seal stating that the company’s products or services do not cause harm to the environment?
The FTC is fast-tracking this year’s update to ensure that these and other questions are answered and appropriate guidelines are in place.
Third-party certification is a growing trend in construction. Fourteen percent of cities with 50,000 or more residents have green building programs. These programs require that buildings meet certain environmental standards. The US Green Building Council, a Washington, DC non-profit organization, publishes one set of green building standards relied on by municipalities.
Green building claims can come up in a variety of contexts. In Shaw Development v. Southern Builders (No. 19-C-07-011405, Somerset County, Maryland), the contractor agreed that the luxury condominium project would be environmentally friendly. The contract required that the completed condominiums be certified by USGBC. The contract was a standard AIA form that included the certification requirement through specifications and incorporation of a Project Manual. The certification requirement read:
Project is designed to comply with a Silver Certification Level according to the US Green Building Council’s Leadership in Energy and Environmental Design (LEED) Rating System, as specified in Division I Section “LEED Requirements.”
When USGBC did not certify the completed condominiums, the developer sued the contractor, claiming $635,000 in lost tax credits. Maryland offers state tax credits of up to 8 percent of a project’s total cost for buildings that 1) are greater than 20,000 square feet and 2) are certified under the USGBC standards.
Although the Shaw Development case settled before trial, it demonstrates the importance of a complete understanding of the green building certification process before making representations or taking on contractual obligations.
