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Are We Using the “Right” Building Product? Part II

Posted by Mike Collignon

Oct 22, 2013 2:17:00 PM

Is “Greenwashing” Dead?

Often, salespeople will only provide standard marketing materials or point to their Web site as a source of their information, which won’t have any readily available documentation to back up their claims.

Additionally, salespeople may not be familiar with the technical or scientific aspects behind either a product’s marketed sustainability features, or the details of testing. They may make broad generalizations about the environmental benefits of their product—such as its carbon footprint. Lastly, they may make claims about specific sustainability factors, such as certifications, “free-of” claims and recycled content.

To be fair, salespeople do not typically develop the marketing materials for the products they represent. Typically, companies will either have a marketing department or hire outside ad agencies who also will not necessarily be wholly familiar with the technical or scientific aspects of touted “green” products. Once the marketing message is developed, it is then provided to the salespeople to disseminate to potential specifiers or consumers. Sometimes, the salespeople may even receive the marketing materials without specific guidance in regards to sustainability claims.

Marketers typically want the “emotional” sell, and to keep the message simple. The “emotional” approach to sales is probably due to marketing data from successful ads, and as such, is why marketers continue to use emotional appeals. In thinking about how pharmaceutical companies approach their marketing, especially in print medium, they may have one page for the ad portraying an image of happy people and then several pages following full of disclaimers. Similarly, television commercials typically portray people that are pleased with the results of taking a particular medicine, but at the same time will have either disclaimers in small print at the bottom of the commercial or someone speaking extremely fast describing all of the side effects at the end of the commercial.

One of the experts on avoiding unsubstantiated claims is Arlene Z. Stewart. Stewart runs a site called “Lab To Ad” (www.LabToAd.com) that is an excellent resource in helping companies navigate the Federal Trade Commission’s (FTC) Green Guides. Her take on disclaimers:

“There’s a reason those disclaimers are there. Disclaimers need to be right at the point of the claim—not only for consumer clarification, but also to for legal purposes to protect the company making the claim. Unfortunately, advertising people don’t like them because it screws up their pretty pictures.”

Ultimately, the issue is that the producers of marketing materials don’t typically define “green” very well. This is where most legal issues can arise, because not everyone necessarily agrees as to what constitutes “green” or “sustainable”. There are multiple layers, and “green” has been applied to any number of attributes: money, sustainability, healthy buildings, energy conservation and water reduction—even radon mitigation.

“Professionals aren’t the only ones who don’t agree on a definition—consumers don’t either, “says Stewart. “A company increases its risk if it doesn’t know the exact ‘green’ feeling the consumer associates with the ‘green’ product. A nebulous message may seem like the perfect tactic for a nebulous market sector, but it’s the company that the law holds responsible for being deceptive when consumers leap to inaccurate assumptions about ‘green’ product performance.”

However, companies are spending considerable sums of money to do research and development to create their technical specifications. That investment could be for naught, should it not be translated into substantiated marketing (See FTC v Serious Materials). And, marketing needs to define “green” based on how technical has defined it and through the scientific parameters established by the FTC’s Green Guides.

So whether the issues are that the technical team is unaware it’s necessary to provide the data to marketing, or that marketing is requesting it remains to be seen. However, another possibility exists in that the regional enforcement entities may not request the data, nor care whether the data is available. And lastly, there is a distinct possibility that marketing never provides an ad with a particular claim to the technical team for review.

Guides for the Use of Environmental Marketing Claims or the Green Guides

Believe it or not, there are “green” marketing regulations provided by the FTC. Specifically, there is a document called the Guides for the Use of Environmental Marketing Claims. And, although the guidelines may be considered voluntary, litigation frequently references them, which underscores the importance for every product manufacturer to become familiar with the content.

The FTC issued the Green Guides in 1992, with subsequent updates in 1996 and 1998, due to an increase in consumer interest in environmentally compatible products, and as a guideline to reduce inaccurate environmental claims. While these are not new, the problems persist and contribute to consumer skepticism of green claims in general. In October 2012, the Green Guides were revised to include clearer information on generic claims, the use of carbon offsets, “green” certifications and seals, renewable energy and renewable materials claims.

The Green Guides are considered to be an industry guide, and contain administrative interpretations of the law. Consequently, they will not have the force and effect of law, and are not independently enforceable. However, as mentioned before, FTC has cited the guides as evidence of noncompliance in a number of their official complaints brought against companies. The reason is that the document provides guidance in a legal sense as to how the FTC will actually interpret the law as it applies environmental claims.

An Overview of the Green Guides

The Green Guides are intended to help marketers avoid making environmental marketing claims that are unfair or deceptive under Section 5 of the FTC Act, 15 U.S.C. § 45. They do not confer any rights on any person, and do not operate to bind the FTC or the public. The Commission, however, can take action under the FTC act if a marketer makes an environmental claim inconsistent with actual examples found within the Green Guides or the spirit or intent of those examples. In any such enforcement action, the Commission has the burden of proof that the challenged act or practice is unfair or deceptive.

“The guides apply to environmental claims in labeling, advertising, promotional materials and all other forms of marketing in any medium, whether asserted directly or by implication, through words, symbols, logos, depictions, product brand names or any other means.”

Examples: The Good, the Bad, and the Pretty…

One of the claim categories that could cause the most heartache for product manufacturers is item 260.6 in the Green Guides. When a product is marketed as “certified” by a third-party organization (TPO), the company that makes the claim of certification or endorsement is still responsible for the claim. Keep in mind that if a manufacturer’s marketing is going to utilize a TPO’s certification or endorsement, that TPO’s definition of green becomes their own.

If the TPO’s certification proves fraudulent or cannot be substantiated, the company that utilized that certification in its marketing claim bears the primary liability. And primary liability cannot be passed off to the TPO that provided the fraudulent certification or endorsement. Additionally, the TPO will not only have responsibility for their own fraudulent claim but will be aiding and abetting the company using their certification in committing deceptive acts, thus exposing them to a second liability.
Another problem area pertains to the misuse of logos.

“Sometimes companies will place a row of logos from ‘green’ organizations on their marketing materials and products,” say Stewart. “Without clearly defining the purpose or meaning of that logo, the consumer may leap to the conclusion that the organizations endorse the product. So the manufacturer could not only be held responsible for deception under the FTC Green Guides and Endorsement Guides, but under trademark law for misuse of the logo by the organization which owns it.”

The Market Effect and Relevance

The easiest way for companies to protect themselves is to be specific in what their communications say and to have all the information necessary to back up that claim in their files before the ad runs.

When it comes to marketing claims, integrity of the claim is extremely important. Potentials for litigation occur when technical does not communicate to marketing the proper substantiation, or when marketing decides that graphic imagery is more important than substantiated product claims. Also, before manufacturers pay for a third-party certification, they should make sure the claims that comprise the purchased certification are substantiated.

Courtesy of The Green Builder® Coalition
The Green Builder® Coalition is a not-for-profit association dedicated to amplifying the voice of green builders and professionals to drive advocacy and education for more sustainable home-building practices.

For more information, contact Mike Collignon, Executive Director at mcollignon@greenbuildercoalition.org


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