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What the FTC's Review of Green Marketing Guides Means to Beauty

January 10, 2023
January 10, 2023
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Green, clean, and everything in between—the class-action complaint filed in New York's Northern Federal District Court against Sephora USA, Inc., over confusion about products sold as "clean" under Sephora's "Clean at Sephora" program has brought the clean conversation to a crescendo. The lack of homogenized standards and federal legislation has created a vacuum in which clean claims abound to capture the wallets of conscious consumers, creating confusion in the process.

"We live in a very interesting phase for the CPG industry in which the consumer is ahead of the industry when it comes to sustainability. Consumers have become increasingly conscious of brands' practices, determining which ones they support and voting with their dollars accordingly," shared Luana Bumachar, Chief Marketing Officer of Beautycounter. "The reality is that they are ready for a beauty industry that is safer, cleaner, and more sustainable and the beauty industry is not there yet. As a result, greenwashing has become rampant in marketing claims over the past several years, which has caused an increase in both consumer confusion and obstacles in terms of their adoption of safer and more sustainable products."

It's been a decade since the FTC updated guidance for businesses to stay on the right side of the law when it comes to eco-marketing claims about their products and services. While the federal government doesn't move quickly, there is some regulatory light at the end of the murky tunnel of clean claims.

"We know that sustainability claims affect consumers' buying habits, but too often the claims are misleading or misinformed. Updated guidelines would help to combat greenwashing and misplaced sustainability efforts and provide substantiation guidance to marketers, developers, and service providers,” said Don Frey, President and CEO of the Independent Beauty Association.  He added, “Scientifically based guidance on the best measurement tools for claim support or advancing sustainability would also allow companies to focus their efforts on making change rather than navigating the morass of various ways to answer the question ‘Is this more sustainable than what I did before?’ It would also provide consumers with clear metrics to assess the validity of sustainability claims."

First issued in 1992 and last updated in 2012, The Green Guides help marketers avoid making environmental marketing claims that are unfair or deceptive under Section 5 of the FTC Act. They provide insight into how consumers are likely to interpret particular claims and how marketers can substantiate claims to avoid deceiving consumers.

"The FTC's efforts to update the Green Guides is a positive step toward ensuring brands are operating with a clear understanding of how to accurately share their sustainability efforts with interested consumers," Jen Lee, Chief Impact Officer of Beautycounter, said. "The journey to true sustainability is not linear, and that is why it's essential that organizations such as the FTC step up to protect consumers from misleading claims about sustainability and green commitments. These updated Green Guides will support consumers in finding the products that are most in line with their values and needs."

The rise of conscious consumers making buying decisions based on environmental claims has prompted the Commission to consider an update of the information. In an open commission meeting, the Federal Trade Commission voted unanimously to review the Green Guides.

"Consumers are increasingly conscious of how the products they buy affect the environment, and depend on marketers' environmental claims to be truthful," said Bureau of Consumer Protection Director Samuel Levine. "We look forward to this review process, and will make any updates necessary to ensure the Green Guides provide current, accurate information about consumer perception of environmental benefit claims. This will both help marketers make truthful claims and consumers find the products they seek."

The review process requires the FTC to seek public commentary on the continuing need for the Guides, their economic impact, their effect on the accuracy of various environmental claims, and their interaction with other environmental marketing regulations. The Commission is also looking for information on consumer perception evidence of environmental claims, including those not in the Guides currently.

"Credo is glad to see the Federal Trade Commission is seeking public input on the Green Guides. So much has changed since 2012, when the Green Guides were last updated," Credo VP Sustainability and Impact, Mia Davis, said. "Credo is committed to responsible, accurate environmental claims, particularly around sustainable packaging, an area we've deeply invested in via our Sustainable Packaging Guidelines and by co-founding Pact Collective. We plan to provide comments to the FTC."

"It is imperative that companies can work against one set of rules and not expend efforts dealing with disparate laws in various states, which ultimately leads to consumer confusion."
By Don Frey, President and CEO, Independent Beauty Association

Specific issues on which the FTC expects to get many public comments include:

Carbon Offsets and Climate Change: The current Guides provide guidance on carbon offset and renewable energy claims, but the Commission is inviting comments on whether the revised Guides should provide additional information on related claims and issues.

The Term "Recyclable": Among other things, the FTC seeks comments on whether it should change the current threshold that guides marketers on when they can make unqualified recyclable claims, and whether the Guides should address in more detail claims for products that are collected by recycling programs but not ultimately recycled.

The Term "Recycled Content": Comments are requested on whether unqualified claims about recycled content—particularly claims related to "pre-consumer" and "post-industrial" content— are widely understood by consumers, as well as whether alternative methods of substantiating recycled content claims may be appropriate; and

The Need for Additional Guidance: The Commission also seeks comment on the need for additional guidance regarding claims such as "compostable," "degradable," ozone-friendly," "organic," and "sustainable,” as well as those regarding energy use and energy efficiency.

"It is imperative that companies can work against one set of rules and not expend efforts dealing with disparate laws in various states, which ultimately leads to consumer confusion. The emergence of state-driven marketing regulation is challenging for consumers and producers to navigate, and updated FTC guidelines would go a long way to establish consistent baselines and definitions across the country," Frey added. "An informed set of updated FTC guidelines would help to guide and focus these efforts so the greatest impact can be made, driving more concerted, meaningful progress to improve sustainability across industries and across geographies.

The review processes typically stay open for at least 30 days or more once published. Additional review periods of 10 to 30 or more days may be necessary once the commentary is reviewed.

Bumachar believes, "Updates to the Green Guides is a great step toward raising the bar on sustainability standards. This push for transparency is critical for the industry to evolve for the better and requires that brands be ready to prove that they're walking the walk—not just talking the talk. This means having the data and metrics to back up the claims they make to consumers."

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