Phil Moffat presented on Green Marketing, the FTC’s “Green Guides,” and “Zero VOC” at the American Coatings Association’s Conference Making Sustainability Ideas Happen: Coatings For the Future on April 10, 2019.
The presentation opened with an overview of green marketing, noting that the number of environmental marketing claims is on the rise, with an attendant increase in the number of claims that are false and/or deceptive, and that DIY building and construction products are being “greened” more quickly than rest of home and consumer products marketplace.
The Green Guides
Mr. Moffat then discussed the FTC Act and the FTC’s Green Guides. He noted that, section 5 of the FTC Act, 15 U.S.C. § 45, authorizes the FTC to take legal action against “unfair or deceptive” practices in commerce, however the statute doesn’t give FTC the authority to set environmental standards (e.g., testing protocols). He also explained that the FTC published the Green Guides to help advertisers avoid making deceptive claims under Section 5, stressing that the Green Guides are non-binding administrative interpretations. The presentation noted that because the Green Guides are non-binding administrative interpretations, they don’t preempt federal, state, or local law; compliance will not necessarily preclude FTC enforcement of Section 5; and that compliance with voluntary standards won’t guarantee Section 5 compliance.
Mr. Moffat explained that the Green Guides apply to claims about the environmental attributes of a product, package, or service in connection with the marketing, offering for sale, or sale of such item or service to individuals, businesses, or other entities; and that Section 5 applies to environmental claims in any marketing medium, whether asserted directly or by implication. He then reported on principles established by the Guides that focus on avoiding deception: “a representation, omission, or practice is deceptive if it is likely to mislead consumers acting reasonably under the circumstances and is material to consumers’ decisions.”
The presentation also discussed the need to substantiate claims. Marketers must identify all express and implied claims that the advertisement reasonably conveys, and ensure that all reasonable interpretations of their claims are truthful, not misleading, and supported by a reasonable basis. For environmental marketing claims, a “reasonable basis” often requires “competent and reliable scientific evidence.”
The presentation then reviewed a type of claim popular with the building products industry – certifications and seals of approval. Certifications and seals of approval are often “endorsements” covered by the FTC’s Endorsement Guides, 16 CFR Part 255. The presentation noted that third-party certifications and seals of approval are appealing, but stressed that companies must exercise due diligence because third-party certifications and seals are not a safe haven from enforcement or lawsuits.
FTC and “Zero VOC”
Mr. Moffat then reported on FTC Enforcement re Zero VOC Claims pre 2017 – 2018 and post 2017-2018 and noted differences between the two.
In 2017 – 2018 the FTC took enforcement actions against four companies for Zero VOC Claims. The companies were making variety of claims, such as:
- Zero emissions,
- Zero VOC
- No odor, and
- Pregnancy/baby safe,
- Asthma and allergy approved.
The consent agreements that FTC entered into with these companies defined “trace” level of emissions as follows:
- Intentional Addition: A VOC has not been intentionally added to the product;
- Material Harm: Emission of the product does not cause material harm that consumers typically associated with emission, including harm to the environment or human health; and
- Background: Emission of the product does not result in more than harmless concentrations of any compound higher than would be found under normal conditions in the typical residential home without interior architectural coating.
“Emission” means any compound that is emitted or produced during application, curing, or exposure of a covered product.
Following the 2017-1018 enforcement actions, the FTC’s position is that:
- Consumers understand “Zero VOC” primarily as an emissions claim;
- “Emission” is broadly defined to include VOC, as well as other substances emitted and produced (e.g., SVOC, exempts);
- Zero VOC claims means a prohibition on exceedance of background concentrations during application and drying; and
- Defines background as “normal” conditions in the “typical” unpainted house.
The presentation noted that the FTC has rescinded the 2013 Enforcement Policy and that the industry should now follow the 2018 Consent Orders and accompanying guidance letters. The guidance letters suggest that compliance for a Zero VOC claim can be achieved if a company can substantiate that:
- Its product has trace levels of emissions six hours or less after application and afterwards, and
- That the paint contains no substance that could cause material harm to the average adult under normal anticipated use.
Mr. Moffat closed the program by stressing that claiming Zero-VOC carries risk. He observed that companies considering such claims should first ensure the return is worth the legal, commercial, and reputational risks, and then develop an approach to manage those risks, including their approach to substantiation, disclosures, etc.