At some point in 2024, the Federal Trade Commission (FTC) will release its revised Green Guides. 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.
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 worried about the 2024 Green Guides update; others are unaware of its implications. The update promises stricter guidelines and harsher penalties for companies playing fast and loose with their environmental marketing. But the update also provides an opportunity for brands to innovate and establish fresh credibility with their customers.
Here’s what you can anticipate from the FTC’s Green Guides updates and how to prepare for the upcoming changes.
What to Expect from the FTC’s Green Guides Update
The coming release of the updated FTC Green Guides will bring new standards for environmental claims made by companies.
1. Leveling the playing field for brands, big and small
Despite the regulatory changes, 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 from the FTC. 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 updated Green Guides will crack down on 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 will provide more clarity and will increase fines and litigation risks for brands that continue to use these labels without real substantiation.
3. Life Cycle Assessments & Scientifically-Backed Evidence
The updated Green Guides may emphasize such practices as life cycle assessments (LCAs) to substantiate environmental claims. Instead of considering just the immediate impact of a product, LCAs provide a more comprehensive evaluation of its environmental footprint from raw material sourcing to end-of-life.
Additionally, more scientifically-backed evidence will be required to substantiate claims like “non-toxic,” “recyclable,” and “carbon-neutral.”
These requirements will provide a more accurate representation of a product’s sustainability, accounting for factors like raw materials, processing and manufacturing practices, consumer use, and disposal.
4. Transparency for Consumers
With the anticipated changes, consumers will receive increased transparency and empowerment in purchasing options. As stricter standards are incorporated, consumers can adjust their purchasing behaviors to reflect their values, making wiser and more enlightened decisions.
The Green Guides advocate for scientific evidence and methods like life cycle assessments, compelling brands to provide fact-based information about their product’s environmental impact, enabling consumers to match their purchasing habits with their values.
How can brands ensure compliance with the updated Green Guides?
Now is the time for companies to take meaningful action on ESG. Companies can do this by connecting with Third Partners and leverage our sustainability and strategy consulting services. We will 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.
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.
Download a copy of Third Partners’ “FTC Green Guides Review: Implications for “Recyclable” Marketing Claims”
Updated Green Guides will trigger compliance and innovation
This latest update to the Green Guides raises the bar for environmental claims while promoting principles of transparency, authenticity, and environmental stewardship. It gives smaller companies an opportunity to compete with brands that currently bend the rules. It gives brands of all sizes a reason for sustainable product and service innovation that are better for the environment. And it helps to give consumers products that are authentic and relevant in their claims of safety and sustainability.
If you are interested in learning more about the 2024 Green Guides update or a custom Green Guides training for your marketing team, contact Third Partners.
