No 'Greenwashing' Allowed

Whether intended or not, many companies are using questionable or ambiguous language to demonstrate that their organizations or products are environmentally responsible. But such "greenwashing," at least in relation to product marketing, just won't cut it with the Federal Trade Commission (FTC). Jim Kohm, head of the FTC's enforcement division, recently spoke with Progressive Grocer's Store Brands (PGSB) about the commission's published guidance on the topic, and detailed what retailers need to know when making environmental-related claims for store brand items.

PGSB: The FTC first issued its "Guides for the Use of Environmental Marketing Claims" ("Green Guides") in 1992, and updated them in 1998. Please explain what the Green Guides cover in terms of product marketing.

Kohm: The Green Guides are intended to provide guidance on how to make non-deceptive environmental claims when you're marketing products, regardless of the avenue through which you're marketing — whether that be product labels or print ads or the Internet or television. They do not give guidance on every potential claim, both because the claims are unlimited and because we try to give as much useful guidance as we can, but some guidance is only useful in a particular context. Therefore we've given guidance where we can.

PGSB: The FTC recently took action against retailers for making misleading environmental claims related to their own brands (e.g., Kmart for making unsubstantiated "biodegradable" claims on its American Fare disposable plates) or for marketing manufacturers' products with questionable claims (e.g., Walmart, Target and 76 other retailers marketing rayon products as bamboo). Is it safe to say that the FTC will be keeping a close eye on how retailers market their own and others' products in the years to come?

Kohm: Yes. Obviously, when you're making claims for your own products, you aren't just a retailer. And we have sent warning labels to a number of retailers in the bamboo context. That was a situation in which we had previously brought cases [against companies], and that didn't seem to have an effect on the retailers; therefore, we sent the warning letters.

PGSB: What steps can retailers take to ensure any environmental claims they make in relation to their store brand products hold up to FTC scrutiny?

Kohm: Well the first thing they should do is take a look at the Green Guides. What we found is that a very large number of retailers hadn't looked at those. They need to. And they should be cautious of claims that are too good to be true or coming from non-trusted sources, and make sure there's substantiation for those claims.

The more specific the claim, the better. FTC has for a long time discouraged general green claims because they are almost impossible to substantiate. "Eco-friendly," "green," "environmentally friendly" — those terms mean lots of things to consumers, and it seems nearly impossible to be able to substantiate everything those terms mean. It is much preferable to say things like "made from 10 percent recycled material" — something you can substantiate.

PGSB: The FTC is in the process of updating its Green Guides once again. What is the scope of the updates, and how will they help product marketers, including retailers marketing their own products?

Kohm: The updates are to ensure that the guides are still relevant in a changing marketplace, and we have two reasons for the updates. One is there are new claims that didn't exist the last time we looked at the guides, like carbon offsets and more renewable energy claims. Additionally, to look at our old claims and see if our guidance is still relevant. In other words, have people changed their opinions on what those claims mean?

PGSB: When will the updates be finalized?

Kohm: I don't know — that's up to the commission, but I would be hopeful they would be coming soon.

PGSB: A large number of environmental certifications now are available from numerous organizations and companies. What advice do you have for retailers that choose to go the certification route with certain store brand products or packaging?

Kohm: The first piece of advice is if you put somebody's seal on your product, then you've bought that seal — in other words, that you've bought everything it communicates and you're liable for what it communicates. So the first is to deal with a trusted company.

The second is to, as much as possible, make sure that seal provides a specific attribute. So if you have a seal that is just a general green seal, then you've made a general green claim that is very hard to substantiate. Sometimes the seal will do it itself. If you say something is biodegradable and it's from [a recognized certification program], then it's fairly clear.