"Recyclable." "Sustainable." "Biodegradable." "Green." These all are words that marketers currently use to promote their brands and corporate practices as being environmentally friendly. Yet such "green" strategies and tactics may come to a halt, or at least subside, with the enforcement of a new set of Green Guides, scheduled to be released in Fall 2010 by the Federal Trade Commission (FTC).
These Guides for the Use of Environmental Marketing Claims (generally known as the Green Guides) outline general principles that apply to all environmental marketing claims and then provide guidance on specific green claims (e.g., biodegradable, compostable, recyclable, recycled content, and ozone safe). The FTC first issued the Guides in 1992, and updated them in 1996 and 1998. Although further revisions have been proposed they have not yet been promulgated. The current version may be found at http:// www.ftc.gov/bcp/grnrule/guides980 427.htm.
Despite the ubiquity of "green" brand claims, these new guidelines -- when issued -- will be the first environmental marketing guidelines released in 12 years. During that time, the tone of environmental dialogue has changed significantly. Back in 1992, when the Green Guides were initially drafted, the destruction of the ozone layer was the big concern, and the guides focused on helping consumers understand what was then the complex notion of recycling. Today, the language used to describe the eco-benefits of products, product packaging and practices has become much more confusing and complex while the green marketplace has become increasingly crowded and cluttered. Yet there is little evidence that consumer or industry concerns about "green" are being addressed. According to Manganello (2010) only 45 complaints have been brought under the guides since their inception and not a single environmental marketing complaint was brought during the Bush Administration.
According the FTC, the current guidelines "apply to environmental claims included in labeling, advertising, promotional materials and all other forms of marketing, whether asserted directly or by implication, through words, symbols, emblems, logos, depictions, product brand names, or through any other means, including marketing through digital or electronic means, such as the Internet or electronic mail." The new set of Green Guides are expected to be much more complex because the FTC will not only regulate brands but will also go after retailers that sell problematic or commonly mislabeled products. In February of this year, for example, the FTC warned major retailers such as Wal-Mart, Kmart and Target to stop selling products labeled as bamboo when in reality the products were made of rayon. The FTC also suggested that retailers shared the responsibility to ensure product labels were correct (FTC, 2010).
Going green not only benefits the environment; it also increases profits for corporations. Through a national survey of 2,000 adults, BBMG (a branding firm at the intersection of branding, sustain- ability and social purpose) found that 77% of Americans agree that they "can make a positive difference by purchasing products from socially or environmentally responsible companies." Concurrently, almost seven in 10 Americans agree that "even in tough economic times, it is important to purchase products with social and environmental benefits," and half say they are "willing to pay more" for them. A different survey by the WPP Group found consumer spending on green products is estimated to hit $500 billion in the coming year.
However, research also illustrates that consumers do not understand green claims. The BBMG survey found that nearly one in four U. S. consumers say they have "no way of knowing" if a product is green or actually does what it claims. These figures were echoed by a 2009 Eco Pulse survey conducted by the Shelton Group that found 25% of the respondents said they had no idea how to decide if a product is green. The percentage was slightly higher in a 2009 National Green Buying Research conducted by Green Seal and Enviro Media Social Marketing, which claims that one in three consumers say they don't know how to tell if green product claims are true while one in 10 consumers blindly trusts green claims. In fact, a review of problematic messages posted on the Greenwashing Index (www.green- washingindex.com) found that consumers visiting the site were not only confused about complex terminology like "carbon neutral" and how hydrogen-fueled vehicles work, but they were concerned about the use of terms like "friendly to the earth" and the use of the color green in marketing messages.
Needless to say, consumers do not understand a wide range of green claims and they don't know how to verify these eco-messages as many companies either do not provide explanations or bury the explanations in a hard-to-find site at their corporate Web site. Many consumers turn to product labels, which are likely to be a focus of the new Green Guides. However, many labels list ingredients unfamiliar to consumers, leaving them confused in the grocery aisle as they try to make a good decision. Lee Ann Head, Shelton's vice president of research, said, "The vast majority of people still make their decision based on reading labels but at the same time they don't trust labels. There's still a sense of buyer beware with green products." In the 2009 National Green Buying Research, only 24% of consumers verify green claims by reading the packaging while less than 20% seek out additional information online or read research studies.
Given the explosion of green marketing and consumer skepticism, it is not surprising that the FTC has taken notice. Manganello (2010) notes, "Since Obama took office, seven complaints as of February 2010 had been brought and FTC Director, David Vladeck has said that tougher enforcement and guidelines are a major part of the Commission's agenda." Specifically, the FTC is concerned with environmental seals such as the "Greenlist" label on SC Johnson's Shout and Windex products -- which actually was created by the company itself and not awarded by an independent third party; packaging claims such as "biodegradable"; and regulation of terms such as "carbon neutral." The FTC should be applauded for stepping up its efforts to expand oversight of green claims; however, its narrow focus on tactics is inadequate.
In order to force green transparency on the corporate world, the FTC needs to be more cognizant of how corporations are using green strategies in their messaging. A green strategy suggests that a business has not only understood its environmental impacts and taken steps to improve them, and integrates sustainability into all aspects of the business, such as production, research, and marketing. A green strategy would encompass all advertising, marketing, and public relations to consistently and truthfully promote its brand and corporate practices. If the FTC chooses to only focus on tactics, the FTC is limiting the impact the Green Guides could have on corporate communication.
The Green Guides can also address green strategies with a focus on education. The FTC has an opportunity to help both companies and consumers understand the environmental impacts of the manufacture, purchase and consumption of all types of products. What green marketing needs is complete transparency on the part of all green marketers when it comes to communicating with consumers. Marketers should help consumers understand what a green product really is, and how consumer choices can truly impact the environment. This information must be easy to find and understand -- whether through easy-to-read explanations in print advertisements or on brand Web sites. Additionally, the FTC should clearly define specific terminology and take responsibility to assist in the education of consumers on the terminology and the topics themselves.