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The New and Improved FTC Green Guides: Marketing for Renewable Energy, Carbon Offsets, and On-Product Claims

The New and Improved FTC Green Guides: Marketing for Renewable Energy, Carbon Offsets, and On-Product Claims

Originally Aired October 10th and 24th, 2012. The U.S. Federal Trade Commission (FTC) recently issued a long-awaited update to its "Green Guides" that provides new guidance on environmental claims, including the use of renewable energy and carbon offsets. Join Kathleen Pessolano, an attorney in the Bureau of Consumer Protection at the Federal Trade Commission, and CRS Counsel Robin Quarrier in a webinar explaining these updates, which expand the FTC's critical review of environmental claims by manufacturers and energy consumers. In this webinar, attendees will learn the scope of the newly revised FTC Green Guides, and their application to product manufacturers and renewable energy hosts, sellers, and purchasers.

Center for Resource Solutions
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October 24, 2012
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  1. THE NEW AND IMPROVED FTC GREEN GUIDES
    Marketing for renewable energy, carbon offsets, and on-product claims
    October 10, 2012
    Kathleen M. Pessolano
    Attorney, Federal Trade Commission
    Robin O. Quarrier
    Counsel, Center for Resource Solutions

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  4. Kathleen Pessolano
    Federal Trade Commission

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  5. OVERVIEW
    •  FTC and Advertising Law
    •  The Green Guides
    •  The Basics
    •  Claims

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  6. SEC. 5, FTC ACT (15 U.S.C. §§ 41-58)
    •  Tell the truth.
    •  Have substantiation for express and
    implied claims.

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  7. AD CLAIMS – TWO STEP INQUIRY
    •  Consumer Perception: What claims does the ad
    convey to reasonable consumers?
    •  Substantiation: Does the advertiser have
    “competent and reliable evidence” to
    substantiate those claims?

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  8. QUALIFICATIONS SHOULD BE:
    CLEAR
    Prominent
    Understandable
    § Plain language
    § Sufficiently large type
    § In close proximity to qualified claim

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  9. GREEN GUIDES BASICS
    How do consumers understand claims?
    Apply to all forms of marketing claims.
    Business →consumer.
    Business → business.
    NOT performance standards or eco-
    labels.

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  10. GREEN GUIDES REVIEW
    Consumer Perception Research
    Federal Register Notices
    Workshops
    § Carbon Offsets/RECs
    § Green Packaging
    § Green Buildings and Textiles

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  11. TODAY’S FOCUS
    •  Certifications and Seals
    •  Renewable Energy
    •  Carbon Offsets

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  12. CERTIFICATIONS/LOGOS/SEALS

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  13. CERTIFICATIONS/LOGOS/SEALS
    § Endorsements
    § Need substantiation
    § General environmental benefit claim
    § Clear and prominent qualification:
    § Refers only to specific, limited
    environmental benefit

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  14. CERTIFICATIONS AS ENDORSEMENTS
    Marketers must disclose a “material
    connection” —
    A “connection between the endorser and
    the seller of the advertised product that
    might materially affect the weight or
    credibility of the endorsement.”

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  15. MATERIAL CONNECTION EXAMPLES
    EXAMPLE 2: Good standards/objectively applied
    EXAMPLE 3: You can tell by the name of certifier that
    it’s an industry association (Forest Products
    Industry Association)
    EXAMPLE 8: Marketer paid a reasonable fee

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  16. UNQUALIFIED SEALS AND CERTIFICATIONS MAY
    BE GENERAL ENVIRONMENTAL BENEFIT CLAIMS
    “Highly unlikely marketers can
    substantiate all reasonable
    interpretations of these claims.”
    Marketers should not use unqualified
    seals or certifications.

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  17. QUALIFICATIONS – USE CAUTION
    § Should be clear and prominent
    § Limit the claim to specific benefit(s)
    § Shouldn’t be negligible
    § Trade-off analysis

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  18. MULTI-ATTRIBUTE CERTIFICATIONS
    “Virtually all products impact the environment.
    For details on which attributes we evaluated,
    go to [a website that discusses the product].”

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  19. RENEWABLE ENERGY
    §  Green Guides advise against unqualified claims:
    • based on energy derived from fossil fuels (unless
    matched by RECs);
    • unless all, or virtually all, significant manufacturing
    processes are powered with renewable energy (or
    non-renewable energy matched by RECs).
    §  One way to qualify claims: Specify renewable energy
    source

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  20. “HOSTING” CLAIMS
    §  The term “hosting” implies use to consumers.
    §  “We generate renewable energy, but sell all of it
    to others.”

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  21. CARBON OFFSETS
    §  Competent and reliable scientific evidence
    §  Disclose if offset purchase funds emission reductions
    that will occur in two years or longer
    §  Regulatory additionality

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  22. MORE INFORMATION
    ftc.gov/green
    business.ftc.gov/advertising-and-
    marketing/environmental-marketing
    [email protected]

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  23. Federal Trade Commission’s Revised Green Guides:
    Renewable Energy and Carbon Offset Claims  
     
    Robin  Quarrier,  Counsel  
     
     
    October,  2012  
     
    Center  for  Resource  Solu5ons  
    www.resource-­‐solu5ons.org  
    www.green-­‐e.org  
     

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  24. Center for Resource Solutions
    •  501(c)(3)
    •  Established in 1997
    •  US and international
    CRS creates policy and market solutions to
    advance sustainable energy.  

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  25. •  Federal Trade Commission
    – Green Guides
    •  National Advertising Div. of BBB
    •  National Association of Attorneys
    General
    – Environmental Marketing Guidelines for
    Electricity
    •  Green-e
    •  Media
    Green Washing Watchdogs

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  26. •  RECs embody all environmental attributes of
    renewable energy, including zero-emissions from
    generation source and avoided emissions from fossil-
    fueled sources (CPUC D08-08-028, Aug. 2008).
     
    What is a REC?

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  27. What is a Claim?
    I am so GREEN I have solar panels on my roof and
    I am 100% solar powered.

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  28. Double Claiming and Double Counting
    $$
    REC
    $$
    REC

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  29. Double Claiming and Double Counting
    •  Generator v. purchaser
    – check emissions disclosures, sustainability
    reports
    •  Host v. owner
    •  RPS v. voluntary
    - Mt. View
    When you purchase a REC or
    offset, you alone have the
    right to all associated
    environmental benefit
    claims.

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  30. •  I buy fixed-rate electricity.
    •  I generate renewable energy that I sell to
    others.
    •  My utility pays me to generate solar
    electricity for them.
    •  I host a renewable energy system. No
    •  I generate 100% renewable energy.
    (technically accurate, but….)
    Claims for System Hosts & Generators

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  31. Thank You  
    Robin  Quarrier  
    Counsel  
    415-­‐568-­‐4285  
    robin@resource-­‐solu9ons.org  
     
    Center  for  Resource  Solu5ons  
    www.resource-­‐solu5ons.org  
    www.green-­‐e.org  
     

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  32. Coming Up
    The New and Improved FTC Green Guides Redux
    Wednesday, October 24 at 10 a.m. PT
    Webinar: Introduction to Green-e Climate
    Thursday, October 25 at Noon PT
    Webinar: LEED, Renewable Energy, and Carbon Offsets
    Thursday, November 1 at Noon PT
    Learn more and register at www.resource-solutions.org/events

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  33. Kathleen M. Pessolano
    Attorney, Federal Trade Commission
    Bureau of Consumer Protection
    Division of Enforcement
    [email protected]
    Robin O. Quarrier
    Counsel, Center for Resource Solutions
    415-568-4285
    [email protected]
    CONTACT

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