Reining in the Wild West of green building advertising

Recently, it seems as though the area of “green” advertising is like the Wild West – anything goes. The reality, however, is that “green” advertising is regulated and will become increasingly regulated.

While advertising (including “green” advertising) is regulated by both state and federal law, in this article we will focus solely on federal regulation. The U.S. Federal Trade Commission (FTC) enforces federal advertising laws pursuant to the Federal Trade Commission Act, which prohibits “unfair or deceptive acts or practices.” An advertisement is “deceptive” if it is likely to “mislead consumers acting reasonably under the circumstances.”

Over the past few years, “green” advertising’s prevalence has grown as climate change concerns have entered the mainstream, resulting in an increase in misleading advertising. So much so, that TerraChoice Environmental Marketing published a paper in November 2007 titled “The Six Sins of Greenwashing,” in which the company studied more than 1,000 products with environmental claims and identified the six most common ways in which advertisers make deceptive claims in connection with the environmental attributes of their products.

Of the products examined, all but one made claims that are demonstrably false or that risk misleading intended audiences. The FTC held workshops throughout 2008 to solicit input on revisions to the “Guides for the Use of Environmental Marketing Claims,” also known as the “Green Guides.”

The Green Guides
In 1992, the FTC issued the Green Guides, which were intended to help advertisers avoid making environmental claims that are unfair or deceptive. The Green Guides address issues including appropriate disclosures to avoid deception, making comparative claims, substantiating facts and properly using claims such as “environmentally friendly” and “recyclable.”

Since the Green Guides are not laws or regulations, they are not independently enforceable (i.e. a violation does not automatically mean the advertiser violated the law). However, if a business makes an environmental marketing claim that is inconsistent with the Green Guides, the FTC can take action based on proof that the advertisement is unfair or deceptive.  As discussed below, the Green Guides are also part of the administrative framework related to third-party certification of “green” products. Accordingly, the failure to comply with the Green Guides may affect a product’s ability to obtain such third-party certification.