Climate Change

US to combat greenwashing with focus on 'carbon offset' claims

The US Federal Trade Commission (FTC) is taking steps to combat ‘greenwashing’ by updating its ‘Green Guides’ to make them easier for companies to understand and use. 

Carbon emissions carbon offsetThe update will include new guidance on marketers’ use of product certifications and seals of approval, claims about materials and energy sources that are ‘renewable’, the term ‘recyclable’ and ‘carbon offset’ claims.

The Green Guides are designed to help marketers avoid making environmental claims that mislead consumers.

The FTC says the update comes as market trends show that American consumers are looking to buy environmentally friendly, ‘green’ products but that often ‘what companies think their green claims mean and what consumers really understand are two different things’.

A workshop on 23 May 2023 will examine the upcoming update, with a special focus on the word ‘recyclable’. Panellists will discuss the kinds of ‘recyclable’ claims consumers are seeing in the marketplace, including new representations that may have emerged since the FTC’s last review of the Green Guides in 2012; what research shows about how people perceive those claims; and the current state of recycling practices. The public is invited to provide comments until 13 June.

The FTC’s Green Guides

The Green Guides were first issued in 1992 and were revised in 1996, 1998, and 2012.

They include general principles that apply to all environmental marketing claims; how consumers are likely to interpret particular claims and how marketers can substantiate these claims; and how marketers can qualify their claims to avoid deceiving consumers.

The EU and greenwashing legislation

In March 2023, the European Commission adopted a proposal for a Directive on ‘Green Claims’. It includes clear criteria on how companies should prove their environmental claims and labels; requirements for these claims and labels to be checked by an independent and accredited verifier; and new rules on the governance of environmental labelling schemes to ensure they are solid, transparent and reliable.

A ‘green claim’ is an explicit claim that is made on a voluntary basis by businesses towards consumers, covers the environmental impacts, aspects or performance of a product or the trader itself; and is not currently covered by other EU rules.

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