Product marketing and legal teams are on high alert with the anticipated release of the Federal Trade Commission’s (FTC’s) new Green Guides. These guides help brands make honest, accurate environmental marketing claims by providing clear interpretation of federal anti-greenwashing guidelines. Global brands must also adhere to similar regulations in the EU and Canada to avoid misleading consumers with false eco-friendly claims, and impose stricter penalties on violators. The updated Green Guides will present an opportunity for companies to innovate and improve or establish credibility with their customers.
Here’s what companies can expect from the new Green Guides and how to prepare to comply with the FTC’s revised guidelines.
Create Equal Opportunities For Brands Of All Sizes
The updated Green Guides present a chance for brands to compete fairly based on performance. Larger companies could face challenges with claims like “carbon-neutral” if backed by carbon offsets without real environmental benefits. Stricter regulations and litigation risks from the FTC will make greenwashing harder for big companies, potentially damaging valuable brands. Brands need to show tangible sustainability efforts and data. This shift promotes fairness in the market and builds trust and credibility with consumers.
Aspirational Green Claims
Aspirational claims refer to statements made by companies that express future intentions or goals related to environmental impact or sustainability but do not reflect current practices. For example a company might say, “We aim to be net zero by 2030″ or “Our goal is to use 100% recycled materials by 2025.” The FTC requires that aspirational claims must not be misleading and companies must be able to support such statements by having a clear, actionable plan or credible evidence showing how they intend to achieve the stated goals. If the company cannot demonstrate progress toward these goals, or if the claims imply current achievements that are not true, they may be considered deceptive.
Documentation is important to substantiate green marketing claims. Keep detailed records of the evidence used to support your environmental statements which can include, test results, certifications, and any relevant documentation from suppliers or manufacturers. Having detailed documentation ensures that you can easily provide proof if challenged.
Environmental Certifications and Labels
The new FTC guidelines are expected to stress the need for third party validated claims. Certifications and labels are significant to help validate environmental claims and provide consumers with confidence in their purchasing decisions. Our Green Claim Navigator provides a list of relevant certifications and third party validations specific to certain industries.
When using certifications and labels, it’s important to ensure accuracy and compliance with their criteria. Be transparent about the certifications your products have obtained, and provide context for consumers to understand their significance. Also, consider educating your audience about the certifications and labels relevant to your industry. By explaining the rigorous standards and processes involved, you help consumers to make informed choices and differentiate your products from competitors.
Transparent Partnerships
When companies engage in partnerships, they share responsibility for the claims made. It’s important that both parties are aligned in their understanding and interpretation of the Green Guides so that all marketing and advertising efforts are consistent and truthful, creating trust and credibility among consumers. Key points to be aware of about transparent partnerships under the FTC Green Guides:
- Clear Disclosure Of Partnerships⎯Companies should clearly disclose their relationships with third-party organizations or certifiers that help verify or support environmental claims so that consumers know the source and credibility of the claim.
- Honest Representation Of Partnership Impact⎯Companies can’t exaggerate the environmental benefits derived from these partnerships. For instance, claiming significant sustainability improvements due to a partnership must be truthful and based on tangible outcomes.
- Avoiding Misrepresentation⎯Companies should ensure that their partnerships do not give a false impression of independent endorsement. For example, if a third-party certifier is financially tied to the company, this relationship should be disclosed to avoid implying undue credibility.
- Substantiation Of Claims⎯Any claims related to the partnership must be backed by evidence. This includes data or documents that show the actual environmental benefits achieved through the partnership.
- Clear and Specific Language⎯When discussing partnerships, using vague or overly broad terms can mislead consumers. Companies need to use precise language that accurately reflects what the partnership accomplishes.
How Companies Can Ensure Compliance With The Updated FTC Green Guides
To ensure compliance with the updated FTC Green Guides, companies need to stay on top of the regulations to be compliant. With our self-serve tool⎯Green Claim Navigator, it will keep you up-to-date on everything you need to navigate your sustainability claims AND will notify you when laws and regulations change. To help you prepare for these changes, you can try the tool for free for 7 days.
The Updated FTC Green Guides Are Coming Soon
The public comment period ended in 2023 for the FTC Green Guides, which haven’t been updated in over a decade, so we expect the guide to come out any day now. Softly will keep you informed of the changes you need to know about specific to your industry, so you can stay compliant and reduce your greenwashing risk. Don’t miss out on the latest developments.