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FTC Releases New Guidance for Ecolabels

Posted 2 October 2012 by Anastasia O'Rourke to Ecolabel News.

The US Federal Trade Commission (FTC) released their long-awaited update to the Green Marketing Guides yesterday.

Given the influence of US markets, these guidelines will have implications for companies, ecolabels, certifiers and advertisers worldwide, and future posts will provide some more context and analysis.

A new section can be found on pages 10-15 that addresses ‘certifications and seals of approval’. Where the 1998 guide covered the topic only via an example, in this iteration a new section is devoted to the issue “given the widespread use of certifications and seals and their potential for deception”.

The five guidelines related to certifications and seals of approval are:

(a) It is deceptive to misrepresent, directly or by implication, that a product, package, or service has been endorsed or certified by an independent third party.

(b) A marketer’s use of the name, logo, or seal of approval of a third-party certifier or organization may be an endorsement. Therefore, they should meet the criteria for endorsements provided in the FTC’s Endorsement Guides.

(c) Third-party certification does not eliminate a marketer’s obligation to ensure that it has substantiation for all claims reasonably communicated by the certification.

(d) A marketer’s use of an environmental certification or seal of approval likely conveys that the product offers a general environmental benefit (see § 260.4) if the certification or seal does not convey the basis for the certification or seal, either through the name or some other means. 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.

(e) Marketers can qualify general environmental benefit claims conveyed by environmental certifications and seals of approval to prevent deception about the nature of the environmental benefit being asserted. To avoid deception, marketers should use clear and prominent qualifying language that clearly conveys that the certification or seal refers only to specific and limited benefits.

The more detailed “Statement of Basis and Purpose” supplement works through how and why this route was taken, with a description of the draft text, a summary of the types of comments received (and the fun bit – how organisations specifically commented), followed by their analysis and final guidance.

The New York Times offers an assessment and summary here. Now that the new guidelines have been issued, attention will likely turn to both how environmental claims can be best integrated into decision making based on this new guidance, and how enforcement is likely to unfold.