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FTC Proposing Revised "Green" Guidelines

November 5, 2010

By: T. Scott Gilligan


With many businesses, including funeral homes, making claims that their products or services are "green", the Federal Trade Commission (FTC) is becoming increasingly concerned that these claims to be eco-friendly may be unsubstantiated. To address these concerns, the FTC has conducted a comprehensive review of its current Guides for the Use of Environmental Marketing Claims ("Green Guidelines") and is proposing to revise those guidelines early next year. The revisions would strengthen the current guidance on "green" claims and environmental seals of approval.

 


It should be noted that the Green Guidelines do not have the force of law. In other words, unlike trade regulations rules like the Funeral Rule, FTC guidelines are simply administrative interpretations of the law. The guidelines inform businesses how the FTC intends to enforce the FTC Act which prohibits unfair and deceptive practices against consumers. Therefore, while the Green Guidelines are not a regulation, it is generally advisable to comply with the guidelines to avoid any enforcement action by the FTC.


With regard to the proposed changes to the Green Guidelines, the FTC is stressing the need for marketers to be in a position to document and substantiate environmental claims. Marketers are cautioned against making any unqualified environmental claims that are difficult or impossible to substantiate. Businesses are advised to limit "green" claims to specific services and to disclose in clear and prominent language which of the specific services if provides are eco-friendly.


With regard to certifications or seals of approval, the Green Guidelines advise businesses to disclose any material connections they have to the certification organization. For example, if a NFDA member were to obtain a Green Funeral Certificate under NFDA's new program, it would have to disclose in any advertisement regarding the Green Funeral Certificate that the funeral home is a member of NFDA, the organization that awarded the Green Funeral Certificate.


In addition to disclosing the connection between the business and the certifying organization, the business would also have to be careful that it spells out in clear and prominent language what the certification or seal of approval is limited to. For example, a funeral home displaying the NFDA Green Funeral Practices Certificate should indicate that it is not a certification, but only indicates voluntary recognition that the funeral home has adopted environmentally responsible practices and offers environmentally friendly products and services to consumers.


According to the FTC's most recent pronouncement on the Green Guidelines, the FTC staff is not inclined to include in the guidelines any requirement for certification organizations to adopt a particular certification system or to publish their standards or other criteria used to support the certification. For the most part, the proposed revisions to the Green Guidelines will place more burdens on the business receiving the certification rather than the organization bestowing the certification.


NFDA members with questions regarding the FTC Green Guidelines may contact Gilligan at 513-871-6332 free of charge, another benefit of NFDA membership.