The FTC Moves to Update Its Green Guides, But Can They Have the Desired Effect?

The U.S. Federal Trade Commission (FTC) may soon enact stricter rules against greenwashing. The agency is taking public comments on its Green Guides, established in 1992 to assess sustainability claims. Changes are certainly due — especially considering the ubiquity of false claims across marketplaces. But without an enhanced budget for enforcement, new rules are unlikely to have the teeth they need to make a difference. The issue also begs the question: How can the FTC even begin to define “green” with so many competing factors?

Greenwashing in action

Examples of greenwashing abound — from misleading claims about a product's recyclability or compostability to misrepresentations of companies’ carbon footprints, the certification of illegal logging, and more. Naturally, some of the most egregious examples come from fossil fuel producers and investors, such as Shell and HSBC.

Purveyors of petroleum products – including Shell, Chevron, ExxonMobil, BP and Total Energies – have attempted to rebrand themselves in the fight against climate change. But while 60 percent of their 2021 advertising attempted to paint them in this light, renewable energy made up a mere 12 percent of their total investments. Similarly, HSBC claimed to be on the path to net zero and even touted its tree-planting program — all the while investing heavily in fossil fuels, including coal.

Exaggerated claims about the recyclability of a product, as well as the amount of recycled material a product is made from, are also common. As are assertions regarding the use of so-called “ocean-bound” plastics. Coca-Cola is guilty of just that, according to the Changing Markets Foundation. The beverage company spent a small fortune touting its use of such plastics, while failing to do anything about its role in creating the problem as the world’s single most prolific plastic polluter, according to the NGO. Brand audits show that Coca-Cola’s total plastic pollution continues to grow.

But the issue of greenwashing is hardly limited to a handful of brands. “Our latest investigation exposes a litany of misleading claims from household names consumers should be able to trust,” George Harding-Rolls, campaign manager for Changing Markets Foundations, told the Guardian last year. “This is just the tip of the iceberg, and it is of crucial importance that regulators take this issue seriously. The industry is happy to gloat its green credentials with little substance on the one hand, while continuing to perpetuate the plastic crisis on the other. We are calling out greenwashing so the world can see that voluntary action has led to a market saturated with false claims.”

This is precisely why the FTC is finally moving toward updating its Green Guides — which are supposed to aid brands in ensuring their environmental claims are accurate and do not mislead consumers. However, the guidelines were last updated in 2012. A lot has been learned since then about what makes a product sustainable, as well as the depths some marketers will stoop to in order to woo eco-conscious consumers.

But what about enforcement?

Unfortunately, the guides are likely to remain just that — guidance that is rarely enforced through the courts. While suits were brought against Walmart and Kohls last year for claiming rayon products were made from bamboo, their total penalty of $5.5 million is arguably a drop in the bucket. 

Indeed, only a few greenwashing suits have been brought to court each year since their height in 2014 and 2015, according to the list on the FTC’s website, with no penalty cases occurring between September 2019 and May 2022. It’s therefore difficult to believe that the updated guides will have much of an effect.

Daring to define "green"

Another relevant issue is how to even define what makes a product environmentally friendly with so many aspects to consider. Electric vehicles (EVs), for example, have been hailed as the holy grail of environmentalism by the U.S. government. But for all intents and purposes, an EV for every driver would cause unfathomable environmental destruction.

Likewise, while net zero is currently being held as the gold standard, many of the offsets used to achieve it are dubious at best. And recycling may be better than using virgin materials, but it creates its own set of problems and still pales in comparison to the ever-forgotten need to reduce first.

In truth, defining “green” should ultimately come down to what’s not being used, instead of what is — meaning the only truly green product would be no product at all. While that is not realistic in a market economy, the FTC would be wise to use its updated Green Guides to discourage the rampant consumerism and single-use products that got us into this mess in the first place.

Image credit: Brian Yurasits / Unsplash