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.

Transcript

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
4. Kathleen Pessolano Federal Trade Commission
5. OVERVIEW •  FTC and Advertising Law •  The Green Guides •  The Basics •  Claims
6. SEC. 5, FTC ACT (15 U.S.C. §§ 41-58) •  Tell the truth. •  Have substantiation for express and implied claims.
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?
8. QUALIFICATIONS SHOULD BE: CLEAR Prominent Understandable § Plain language § Sufficiently large type § In close proximity to qualified claim
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.
10. GREEN GUIDES REVIEW Consumer Perception Research Federal Register Notices Workshops § Carbon Offsets/RECs § Green Packaging § Green Buildings and Textiles
11. TODAY’S FOCUS •  Certifications and Seals •  Renewable Energy •  Carbon Offsets
12. CERTIFICATIONS/LOGOS/SEALS
13. CERTIFICATIONS/LOGOS/SEALS § Endorsements § Need substantiation § General environmental benefit claim § Clear and prominent qualification: § Refers only to specific, limited environmental benefit
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.”
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
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.
17. QUALIFICATIONS – USE CAUTION § Should be clear and prominent § Limit the claim to specific benefit(s) § Shouldn’t be negligible § Trade-off analysis
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].”
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
20. “HOSTING” CLAIMS §  The term “hosting” implies use to consumers. §  “We generate renewable energy, but sell all of it to others.”
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
22. MORE INFORMATION ftc.gov/green business.ftc.gov/advertising-and- marketing/environmental-marketing KPessolano@ftc.gov
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    
24. Center for Resource Solutions •  501(c)(3) •  Established in 1997 •  US and international CRS creates policy and market solutions to advance sustainable energy.  
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
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?
27. What is a Claim? I am so GREEN I have solar panels on my roof and I am 100% solar powered.
28. Double Claiming and Double Counting $$ REC $$ REC
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.
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
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    
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
33. Kathleen M. Pessolano Attorney, Federal Trade Commission Bureau of Consumer Protection Division of Enforcement kpessolano@ftc.gov Robin O. Quarrier Counsel, Center for Resource Solutions 415-568-4285 robin@resource-solutions.org CONTACT