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FTC investigates ‘green' claims

Jane Hoback

April 24, 2008

2 Min Read
FTC investigates ‘green' claims

The Federal Trade Commission launched a series of public meetings in early January to review its green marketing guidelines.

The agency, which initially planned its review in 2009, said it stepped up the schedule in response to the growing number of businesses making claims of being environmentally friendly, known as green marketing, or sometimes less flatteringly, "greenwashing."

The practice is largely unregulated. A November 2007 report from Reading, Pa.-based TerraChoice Environmental Marketing found that of 1,018 products that made green claims, all but one were marketed with false or misleading statements.

The first hearing, held Jan. 8, focused on how carbon-offset programs work and whether consumers get what they pay for. Consumers buy carbon offsets to help lessen the impact of carbon dioxide emissions from purchases of vehicles, air travel or electronics, for example. American consumers spent $54 million on carbon offsets last year, according to The New York Times, by paying to plant trees or subsidizing wind or solar power to cut prices. Other programs might target recycling or sustainable building materials.

The FTC, which regulates advertising, has made no accusations. But it says the growing popularity of such programs "has created a heightened potential for deception." The agency wants to know how companies substantiate claims of being "carbon neutral" and whether they're counting reductions that would have happened even without the offsets, such as manufacturing a product with improved energy efficiency. The commission plans to revise its guidelines, first issued in 1998, based on discussions in the workshops.

In response to the issue, advertising and marketing firms are creating new divisions to help clients who want to go green.

Green Marketing Inc., based in Nederland, Colo., launched its sustainability and corporate social responsibility audit to avoid what it calls "the building backlash that awaits companies engaging in 'greenwashing.' "

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