FTC Starts Long-Awaited Green Guides Review

Update: The formal Federal Register notice was published on December 20, 2022, and comments are due on February 21, 2023.

On December 14, 2022, at an open meeting of the Federal Trade Commission (“FTC” or “Commission”), FTC commissioners voted unanimously to publish a Notice in the Federal Register announcing a Request for Public Comments on potential amendments to the Commission’s Guides for the Use of Environmental Marketing Claims (“Green Guides” or “Guides”). The FTC solicits comments on the ongoing need for the Guides, and on specific claims addressed in the Guides, including “recyclable,” “recycled content,” “degradable,” “compostable,” and more. It also asks if it should initiate a rulemaking process and address claims it declined to consider during the last review, such as “organic” and “sustainable.” Importantly, given the growth in some state laws that purport to restrict claims, the FTC asks for input on whether the Guides conflict with federal or state laws. This proceeding is expected to garner significant input, with comments due 60 days after publication in the Federal Register.

Background

First published in 1992, the Green Guides advise businesses on how to ensure their environmental marketing claims are truthful in compliance with section 5 of the FTC Act. The Guides apply to labeling, advertising, promotional materials, and all other forms of marketing in any medium. They lay out general principles that apply to all environmental marketing claims, explain how consumers are likely to interpret particular claims, and advise marketers on how to substantiate their claims. While they are not themselves enforceable, the Green Guides are important in helping businesses understand the types of claims the Commission will enforce against. As we have previously discussed, the explosion of consumer demand for environmentally-friendly products has driven many marketers to differentiate their products by highlighting environmental enhancements or benefits in their advertising. But since false advertising claims are now one of the fastest-growing areas of litigation in the U.S., a review of the Guides is timely and is sure to generate considerable interest from stakeholders. 

The Green Guides review is part of the FTC’s ten-year regulatory review cycle. This review cadence allows the Commission to update its guides and rules to consider changes in technology, science, the marketplace, and other factors. Public comments at the open meeting supported the need for this review, with most commenters expressing hope that the FTC would provide new definitions of key terms. 

Topics for Public Comment

The FTC welcomes public comments on any aspect of the Green Guides but is particularly interested in the need for the Guides, burdens and benefits of the Guides, the level of compliance, harmonization possibilities with international laws, and possible conflicts with federal and state law. The FTC specifically asks for feedback on a number of key claims, including the following, among others:

• “Carbon Offsets and Climate Change”: The current Guides provide guidance on carbon offset and renewable energy claims. The Commission invites comments on whether the revised Guides should provide additional information on related claims and issues.
• “Recyclable”: Among other things, the FTC seeks comments on whether it should change the current “substantial majority” threshold (60%) that guides marketers on when they can make unqualified recyclable claims. They also ask whether the Guides should address in more detail claims for products that are collected (picked up curbside) by recycling programs but are not ultimately recycled due to “market demand, budgetary constraints, or other factors.” This particular question promises to be quite contentious as recent class action lawsuits have alleged that regardless of access, claims for materials with low recycling rates are false or misleading. However, despite those allegations, judges in some recent cases have focused on a common-sense, plain reading of the term, concluding that a “recyclable” claim simply means a product is capable of being recycled, rather than a guarantee that it will actually be recycled. 
• “Recycled Content”: The FTC asks whether unqualified claims about recycled content – particularly claims related to “pre-consumer” and “post-industrial” content – are widely understood by consumers, as well as whether alternative methods of substantiating recycled content claims such as mass balance, may be appropriate.  
• “Compostable”: Currently, compostable claims must be substantiated with “competent and reliable scientific evidence that all the materials in the item will break down into, or otherwise become part of, usable compost in a safe and timely manner in an appropriate composting facility, or in a home compost pile or device.” The FTC requests comments on whether it should adopt a “substantial majority” standard similar to current guidance on recyclable claims.
• “Degradable”: Under the Guides, unqualified “degradable” claims must be supported by evidence that a product will “completely break down and return to nature within a reasonably short period of time after customary disposal,” which the Guides suggest means one year. “Degradable,” “biodegradable,” “oxo-degradable, “oxo-biodegradable,” and “photodegradable” are all treated similarly under the Guides. The FTC asks whether it should revise the Guides to provide alternative frameworks for some or all product categories and specifically asks for comments on timeframes for liquid products and whether, in light of its ECM Biofilms decision (which references five years for degradation in landfill), it should clarify or modify the Guides.
• The Commission also seeks comment on whether it should develop guidance on claims it did not include previously, but which have grown in popularity since the last revision, such as “organic” and “sustainable.” 

Once the Notice is published in the Federal Register (which the FTC anticipates will be in mid-January 2023), interested stakeholders will have 60 days from the date of the Notice to submit comments to the FTC, unless an extension is granted. In the past, the FTC has also hosted public workshops to obtain additional feedback on important technical and other questions. With sustainability top of mind for so many businesses and consumers, this proceeding is expected to garner a large number of comments, so interested companies and associations should begin considering now key points to raise in comments.