FTC hints at updating environmental claim guidelines - The Entrepreneurial Way with A.I.


Friday, December 16, 2022

FTC hints at updating environmental claim guidelines


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The Federal Trade Commission announced Wednesday that it is seeking public comment on potential updates to its guides for environmental marketing claims

The “Green Guides” have been published since 1992, according to a statement from FTC Chair Lina Khan, in an effort to help brands avoid using unfair or deceptive statements to mislead consumers. The guides were last reviewed in 2012, and the FTC says increasing consumer interest in buying more environmentally friendly products encouraged it to review them again.

The FTC is asking the public for general commentary on the guides overall, including how consumers might perceive certain claims. It expects to receive input on claims surrounding carbon offsets, climate change, the use of the terms “recyclable” and “recycled content,” as well as any need for additional guidance. 

"Before making a purchase, many American consumers want to know how a product contributes to climate change, or pollution, or the spread of microplastics. Businesses have noticed. Walk down the aisle at any major store—you’re likely to see packages trumpeting their low carbon footprint, their energy efficiency, or their quote-unquote 'sustainability.' For the average consumer, it’s impossible to verify these claims," Khan said in a statement.

“That’s why it’s so important for companies making these claims to tell the truth. If they don’t, it distorts the market for environmentally friendly products.”

Consumers are increasingly more interested in products within the apparel and beauty spaces that are deemed more sustainable. The retail industry is arguably not beneficial to the environment, and since becoming more sustainable is a difficult thing to do, proving such claims also becomes difficult for many consumers. With a lack of more regulated standards in the U.S., plenty of retailers have joined self-governing organizations in an effort to demonstrate that their brand is dedicated to the cause.

Across the pond, governments in Europe have been cracking down on environmental claims. Norway’s consumer watchdog agency warned fast-fashion retailer H&M earlier this year about its usage of the Higg Materials Sustainability Index, saying it likely goes against the country’s rules on sustainability claims. The index measures environmental impact and was created by the Sustainable Apparel Coalition, which H&M is a member of. 

A study from last October by pricing consultancy Simon-Kucher & Partners showed that 60% of the participants said sustainability was an important factor in purchase decisions. Even more, Deloitte research from its Global State of the Consumer Tracker — which surveyed 1,000 U.S. consumers — found that shoppers were more likely to name a consumer packaged good as their most recent sustainable purchase, as opposed to items like electric cars or solar panels. The same data showed that four in 10 shoppers choose a sustainable good often or whenever possible.

But whether or not those goods are actually sustainable could be up for debate, and the FTC is hoping to update its Green Guides to more accurately stay up to date with rising consumer interest. 

“Consumers are increasingly conscious of how the products they buy affect the environment, and depend on marketers’ environmental claims to be truthful,” Bureau of Consumer Protection Director Samuel Levine said in a statement. “We look forward to this review process, and will make any updates necessary to ensure the Green Guides provide current, accurate information about consumer perception of environmental benefit claims. This will both help marketers make truthful claims and consumers find the products they seek.” 

via https://www.aiupnow.com

Dani James, Khareem Sudlow