Personal Injury Law

FTC Green Guides, Sustainability & Third Party Certification

By Kenneth Odza

Our previous blog entry discusses last week's release of the Federal Trade Commission's ("FTC") revised, proposed "Green Guides" generally, discussing how the FTC is focused on "deception" and is not taking a radical departure from the 1998 version (the last version) of the Green Guides. But under the new Guides what are the consequences of the FTC's position on sustainability and third-party certification, especially as it relates to food products? The bottom line is that marketers of sustainable food products should re-evaluate (1) what sustainability claims are made and (2) the benefits of proper third-party certification.

The FTC, in its commentary to the revised, proposed Green Guides, reports that it "is unable to provide specific advice on sustainable as an environmental marketing claim. Unlike other claims we tested, the term contains no cue alerting consumers that it refers to the environment."

Yet the FTC acknowledges that sellers of food (and non-food) products are using the term 'sustainable,' and consumer awareness of sustainability issues is growing rapidly. The FTC seems to be leaving itself room for action against marketers of "sustainable" products if it's clear that consumers are meant to believe that 'sustainable' is an environmental marketing claim. And, as discussed in our previous entry, marketers need to be wary of compliance with not only the FTC but also state consumer protection laws, which often reach further than federal law on the marketing of food products.

FTC has also chosen for the first time to address in the Green Guides what it calls "Certifications and Seals of Approval." FTC makes clear that "It is deceptive to misrepresent, directly or by implication, that a product, package, or service has been endorsed or certified by an independent third-party." And, even
"third-party certification does not eliminate a marketer's obligation to ensure that it has
substantiation for all claims reasonably communicated by the certification."

Food manufacturers and retailers who use a seal or logo to designate sustainability should evaluate whether the seal or logo could be read by the FTC, a consumer or a plaintiff's lawyer to imply third-party certification or endorsement. In other words, if independent third-party certification isn't used, you should ask yourself the following questions:

1. Is it clear to anybody reading your label (FTC, consumers, plaintiffs, bar, etc.) that the claim is only your claim and not a third-party claim?
2. Do you have substantiation (i.e., science) to back up any claims of environmental sustainability (whether yours or a third party's)?

If you as a food manufacturer or seller can't answer both questions affirmatively, your marketing may be a liability. The SC Johnson Company, for example, is the subject of a consumer class action alleging that the company's own "greenlist" certification program was deceptive. Often, the realistic choice may be a) not to market the product as environmentally sustainable or b) to switch to a substantiated third-party certification.

For food, your best choice may be Food Alliance certification, which is now the most comprehensive certification for sustainable food and the gold standard.*

*In the interests of full disclosure, I serve on the non-profit Board of Directors for Food Alliance and am a staunch advocate of the organization.

Full post as published by Food Liability Law Blog on October 11, 2010 (boomark / email).