How green is your ecolabel?

New marketing guidelines could support legitimate claims. Photo credit: Whole Foods

Natural, ecological, Earth conscious: These are just a few of the virtuous-sounding claims peppering store shelves, touting the hazy environmental credentials of everything from lip gloss to bathroom cleaner. But if federal regulators have their way, buzz phrases like “eco-friendly” could soon be a thing of the past.

For the first time in more than a decade, the U.S. Federal Trade Commission has revised its Guides for the Use of Environmental Marketing Claims. That means new rules that could discourage companies from making vague or spurious claims about the environmental attributes of their products.

Such changes could bring greater clarity for consumers about the environmental attributes of products they find at their local Whole Foods or Target. The new rules could bolster companies making legitimate claims, as well as those in the business of certifying ecolabels.

Also known as the Green Guides, the FTC guides don’t lay down the law on such claims. Rather, they provide guidance to the agency about how to enforce existing laws about false or deceptive advertising -- something that could bolster efforts to rein in false environmental claims while guiding companies’ efforts at self-regulation.

“The market is in the process of sorting itself out,” says Scot Case, director of market development for environmental claims certifier UL Environment. “What the FTC is doing is bringing some clarity to the space.”

That space is one that includes hundreds of labels, more than 350 of which are tracked by Ecolabel Index, a global directory. While some labels maintain rigorous third-party verification standards, others are misleading, vague or simply false, according to analysts.

Marketing experts say the glut of labels in the marketplace breeds confusion among consumers, and could weaken the claims of companies whose environmental claims are legitimate.

“It’s as much about maintaining and strengthening the market for ecolabels as anything,” Trevor Bowden, co-founder of Ecolabel Index, says of the push for more authentic labeling. “If consumers don’t trust the claims, that can have far reaching implications.”

The updates, which are expected to be finalized in the coming year, advise that marketers should avoid making general, unqualified environmental claims -- like environmentally friendly -- which confer a host of attributes that products are unlikely to have, according the FTC.

Instead,the agency says marketers should limit claims to specific, verifiable benefits. The revisions also tighten up directions on how companies should define products that are recyclable, compostable and free of certain substances, as well how to appropriately make claims about renewable energy and materials and carbon offsets.

Seals and certifications, meanwhile, should also claim specific benefits, and reveal whether they come from the company itself, or if an independent party verifies them.

“In all circumstances, any kind of environmental certification has to be clear, and has to limit claims to verifiable environmental benefits,” says Brooks Beard, a partner at San Francisco–based law firm Morrison & Foerster who specializes in the legal aspects of false environmental claims.

That means in the near future, more companies may seek to get their claims validated, says Case of UL Environment, which as a third-party certifier stands to profit if that happens. In the longer term, he says, the updated guides could result in tougher environmental standards across the board.

For businesses that already adhere to rigorous certification systems, those tougher standards could help their products stand out to consumers and corporate purchasers.

“If the rules will clearly substantiate claims then I think that’s a very positive thing,” said PK McKoy, co-owner of Lumos Wine Company in Philomath, Ore. In 2008, Lumos received certification from Food Alliance, a third-party certifier of food production, processing and distribution. “It would be good for labels to have some integrity.”

After almost an almost decade-long lull, the FTC has filed seven suits since 2009 against companies for making false environmental claims. Most recently, it accused four clothing and textile makers with advertising Rayon products as being made from bamboo using environmentally friendly processing.

While the guides could drive legal action against businesses making dubious environmental claims, for many companies it could be impetus to look inward.

“This is great guidance for companies to have a chance at self-regulation,” Beard says. “I think over the next six months you’re going to get some voluntary compliance.”

Beyond the threat of a legal crackdown on false claims, business is exerting its own pressure to legitimize ecolabels. Retailers, purchasers and designers use labels to make decisions, and as such, are wrestling with what makes a legitimate label, Bowden says.

One of those is Walmart. In 2009, the world’s biggest retailer announced that it would create a sustainability index, essentially a rating system for all the products it sells. The company’s first step was to survey its suppliers about their sustainability efforts, including asking if they had received third-party certification for any of the products they sell to Walmart.

And it’s not alone. Through groups like the Sustainability Consortium and the Green Products Roundtable there’s an increasing move towards collaboration among retailers, industry groups and nonprofits to establish common definitions of “green.”

That means there’s opportunity to reach both consumers and corporate decision-makers for suppliers who pursue clear and authentic ecolabels.

“This is their time to really do it right,” Bowden says.