At some point in 2024, the Federal Trade Commission (FTC) was supposed to release its revised Green Guides. That never happened. Our crystal ball is as good as yours but the official Green Guides updates are increasingly unlikely to happen under the new administration.

According to AdWeek, “advertisers can expect an FTC consumer protection mission that is less regulatory, less hostile to advertisers and to targeted advertising, and more advertiser-friendly in its approach to ad interpretation.”

For those unaware, Green Guides provides guidance on how brands can make legitimate environmental marketing claims about their products. For global brands, there are parallel regulations in the EU and Canada. The goal is to make sure consumers aren’t deceived by specious, or outright false, claims that a product is environmentally-friendly, eco-conscious, or non-toxic. In fact, terms such as “environmentally-friendly” are outright prohibited. More on that below.

Once a decade, the guide is revised, in part to close loopholes that have allowed brands to make misleading environmental claims about their products.

Many brands and manufacturers are concerned about the 2024 Green Guides update and implications for constructing product claims; others are unaware of its implications. The promise of an update brought with it the threat of stricter guidelines and harsher penalties for companies playing fast and loose with their environmental marketing. But, more importantly, preparing for the update created an opportunity for brands to innovate and establish fresh credibility with customers who are increasingly skeptical about environmental claims.

Here’s how to proactively prepare for potential Green Guides changes (whether they happen or not), and meet the burden of proof for environmental product claims under the revised Canadian Competition Bureau and European Green Claims Directive.

What the FTC’s Green Guides Update Would Entail

The release of the updated FTC Green Guides would have meant new standards for environmental claims made by companies. Since the update never happened, brands are free to construct environmental claims in any manner they wish, right? Wrong. Parallel regulation in the EU and Canada is now in force. Any company placing products on the North American and/or European markets needs to bring environmental marketing claims into alignment with global standards that are now the de facto US benchmark.

Q: “If I am a US-based marketer or brand owner why do stricter Canadian and European green marketing standards impact my business?”

A: Regulatory compliance is just one factor. The competitive landscape has changed. Competing brands with international distribution are investing in shoring up green product claims to meet the highest standards in the markets they serve. In addition to competitive forces, buyer expectations are now elevated. Dozens of major retailers operate across US-Canadian borders and even internationally. International standards have effectively preempted the U.S. FTC’s inaction in a commercial sense, if not a legal one.

1. Leveling the playing field for brands, big and small

The Green Guides update is an opportunity for brands to compete on a level playing field based on legitimate performance. Bigger companies may run afoul of the new guidelines by using claims like “carbon-neutral” especially when the claim is backed by the purchase of carbon offsets which don’t provide real benefit to the environment.

Greenwashing by larger companies will also become more difficult due to more stringent regulatory and litigation risks. In the past companies have absorbed the costs of large fines, but the bigger concern is damage to valuable brands, which can take decades to recover.

As a result of these changes, brands must shift towards demonstrating tangible and measurable sustainability efforts and data. Such a shift will promote fair play in the market and foster an environment of trust and credibility among consumers.

2. Providing clarity & cracking down on superficial claims

The Green Guides already restrict superficial environmental claims. Take terms like “eco-friendly,” “green,” and “clean beauty.” Marketers often throw these claims on packaging or in advertising since they are so vague, thinking they don’t need real substantiation.

The updated Green Guides would provide more clarity and potentially increase fines and litigation risks for brands that continue to use these labels without real substantiation.

The recent updates to Canada’s version of the Green Guides were significant. New guidance builds upon the notion of “adequately and proper testing” of green claims — extending this requirement not only to products but also to a company’s overall sustainability-related communications e.g. Corporate Sustainability Reports and ESG Reports.

3. Life Cycle Assessments & Scientifically-Backed Evidence

The newest updates to global green marketing guidelines emphasize substantiation. New green claims requirements indeed require a more accurate representation of a product’s sustainability, accounting for factors like raw materials, processing and manufacturing practices, consumer use, and realistic end-of-life outcomes.

Practices such as life cycle assessments (LCAs) are one way (but not the only way) to adequately and properly substantiate environmental claims. Instead of considering just the immediate impact of product or packaging use, LCAs provide a more comprehensive evaluation of its environmental footprint from raw material sourcing to end-of-life.

The scope of LCA studies is actually quite narrow. In fact, the narrower the better in order to control project costs, minimize internal resource requirements, and generate defensible claims. However, these studies tend to focus acutely on carbon emissions and certain esoteric environmental impacts of products. For example, do you really need to calculate the “eutrophication” potential of your product? What does a blended “ecotoxicity” score from a consultant actually mean to your buyer? Companies should be cautious about commissioning LCA studies strictly for the purpose of substantiating environmental claims. Seek advice from an independent consultancy like Third Partners to help scope out these studies, evaluate less costly alternatives, and ensure focus on your sustainability story, rather than getting caught up in technicalities.

Beyond LCA, additional scientifically-backed evidence will be required to substantiate claims like “non-toxic,” “recyclable,” and “carbon-neutral,” and “made with” or “made without.” These claims generally fall outside the realm of ISO-compliant LCA studies and require additional development.

4. Transparency for Consumers

Consumers are increasingly mistrustful of brands’ green claims, which presents a monumental challenge for brands that actively differentiate on positive environmental and social impact claims.

A crisis of confidence. Globally, 60% of consumers say they are skeptical about green claims made by brands. Regulators estimate that 40% of green claims made online could be misleading consumers.

Regulators are encouraging consumers to be on the lookout for greenwashing like never before in order to increase transparency and empowerment in purchasing decisions. As stricter standards are incorporated, consumers adjust their purchasing behaviors to reflect their values, making wiser and more enlightened decisions that rely upon a heightened scientific burden of proof and more creative storytelling.

The Green Guides, and parallel Canadian and European guidance, call for scientific evidence and methods like life cycle assessments. Brands are required to provide fact-based information about their product’s environmental impact, enabling consumers to match their purchasing habits with their values. While the exact requirements differ by jurisdiction, most claims should be third party verified, especially claims applied to packaging and used in B-to-C advertising.

How can brands ensure compliance with the updated Green Guides?

Now is the time for companies to take meaningful action. The team at Third Partners has over a decade of experience providing sustainability and strategy consulting services to help brands go beyond compliance requirements and achieve true science-based brand storytelling success. We help with the following:

1. Training on the Green Guides updates. We have developed and delivered custom training to all levels of company leadership on how the FTC Green Guides update will impact both marketing and product development. The training explains the issue at hand, precisely what will be affected – packaging, advertising, validation, and more. Download our latest guide on the Green Guides update for an easy-to-understand explanation on the updates.

2. Claims Validation. We perform detailed claims validation using data and science, and work with brands to ensure practical application of the Green Guides and their Canadian and European counterparts.

3. Services for manufacturers. We help operations and marketing teams identify and execute improvements to modernize traditional EH&S programs. Critical updates are necessary to meet data and performance requirements from buyers including brands and retailers. Our experts help manufacturing teams with multiple facilities profit from sustainability by implementing energy and resource management programs and supply chain social and environmental performance improvement programs.

4. Integrated “impact campaigns.” Sometimes a brand or product is so transformative or aspirational that it requires more than just a single environmental claim. This is where environmental marketing campaigns or platforms come in. We work with brand owners to develop intelligent, impactful, brand-aligned experiences rooted in authentic science and data. More than just compliant, these sustainable brand activations help brands stay relevant with consumers by tackling environmental and social challenges head-on.

Download a copy of Third Partners’ “FTC Green Guides Review: Implications for “Recyclable” Marketing Claims”

Innovation is the only safe option

The existing US FTC Green Guides, while not as comprehensive or prescriptive as the revised Canadian and European standards, still sets a high bar for environmental claims while promoting principles of transparency, authenticity, and environmental stewardship. Green marketing standards give brands of all sizes a compliance mandate to invest in sustainable product and service innovation. And the latest international guidelines give consumers assurance that products that are authentic and relevant in their claims of safety and sustainability.

If you are interested in learning more about the FTC Green Guides update or how your brand fares in the new international green marketing compliance environment, contact Third Partners.