The agency's Guides for the Use of Environmental Marketing Claims, or Green Guides, define terms such as "recyclable" and "biodegradable" and explain how businesses should back up environmental assertions. Though FTC cannot force businesses to adopt greener practices, Section 5 of the FTC Act authorizes the agency to intervene when businesses are misrepresenting their practices to clients -- in other words, turning greenwashing into fraud.
FTC did not use those guidelines to file any complaints regarding environmental claims during the administration of President George W. Bush, but it has filed seven since Obama took office.
David Vladeck, director of FTC's Bureau of Consumer Protection, told the Senate Subcommittee on Consumer Protection last summer that tougher enforcement and environmental guidelines are a major part of the commission's agenda.
"In response to the explosion of green marketing in recent years, the agency initiated a review of its Green Guides to ensure that they are responsive to today's marketplace," Vladeck said in his written testimony. The commission is looking into topics beyond the scope of the existing guides, he noted, "because many currently used green claims, such as 'sustainable' and 'carbon neutral,' were not common when the Commission last revised the Guides."
Industry and environmental groups are also eager to find out whether the revised Green Guides will weigh in on the largely unregulated markets for carbon offsets, renewable energy credits and environmental certifications, all of which were addressed during public workshops in 2008. Regulatory experts say stricter marketing guidelines would fit into the Obama administration's efforts to expand environmental oversight by the executive branch.
"If they can't get climate change regulations passed through Congress, the administration is going to do whatever it can to keep moving the ball forward," said Hamilton Hackney, an environmental attorney and shareholder at the Boston office of Greenberg Traurig LLP. "Sometimes, these 'collateral regulations' can have almost as much of an impact."
Most industry groups are closely following U.S. EPA's efforts to regulate greenhouse gas emissions, Hackney said, but even agencies historically uninvolved with environmental issues have started assuming environmental oversight responsibilities. The Securities and Exchange Commission, for instance, voted last month to require publicly traded companies to disclose to investors the potential economic impact of new greenhouse gas regulations (E&ENews PM, Jan. 27).
Environmental groups are excited that FTC is examining the issue of greenwashing, though they are not sure what to expect. The agency has remained tight-lipped on details of the revisions, said Claudette Juska, a research specialist at Greenpeace. "It's been a little bit hard to see into the process," said Juska, who submitted a comment during the public review process in 2008.