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The FTC Proposing Ban on the Terms “Green” and “Eco-Friendly”

Well it’s About Time!

After many years of legitimate environmental leaders groaning about the FTC’s (Federal Trade Commission) lack of oversight on green marketing, at last the FTC has stepped up and proposed some revisions to current marketing standards that have been in place since ahem… 1998 (CRINGE!!).

Why is that so frustrating and rather appalling?   You look at terms like “low fat” from the 80’s and “organic/all natural” from the 90’s and you realize that some companies have no qualms about marketing a product in a completely misleading if not outright false manner without strict oversight.  So, obviously, “green” has been around a while and with the current provisions in place, green washing i.e. making false and or unsubstantiated claims about a product’s “eco-friendliness” has been a thorn in the proverbial side of meaningful and ethical companies trying to compete in the market place with legitimately “green” products for the better part of a decade.

This Will Likely Affect our Industry

The FTC has a summary of the proposed changes on their site and they are soliciting public feedback until December.  There are some general rules that I think will have some major impact on how we can market a home including terms and phrases we may want to outright delete from our repertoire.  For example:

•    Marketers should not make unqualified general environmental benefit claims. They are difficult, if not impossible, to substantiate.  (The FTC specifically lists the terms “green” and “eco-friendly” as falling under this category.)

•    This new section emphasizes that certifications/seals are endorsements covered by the Commission’s Endorsement Guides and provides new examples illustrating how those Guides apply to environmental claims (e.g., marketers should disclose material connections to the certifier). ( Uh – you can’t create your own certification, label, or logo and then award yourself the stamp without telling your consumers about it.)

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•    Third-party certification does not eliminate a marketer’s obligation to have substantiation for all conveyed claims. (Attention green builders, especially you guys out there going for the really easy certifications that don’t require HERS ratings.  You might want to cease and desist from using phrases like more energy efficient, healthier indoor air quality, lower energy bills unless you can prove it.)

Additionally there are provisions for terms such as non-toxic, renewable, and recycled materials as to what qualifies to have those labels and how they can be used.  In the case of housing, that could affect how we present individual components of a home such as low VOC paints and carpets, non-toxic glues, and recycled insulation products.

I think the changes are obviously much needed and will certainly weed out some rather outrageous practices in the sustainable industry and allow for more consumer clarity on what it all means and substantiate benefit.  I could also see some Realtors getting in some trouble on the “ignorance is not an excuse” front should they get caught violating these standards or should they represent a seller not following these standards and the buyer find themselves a disappointed owner of a not so green home.  I think Realtor commandment number one “though shalt verify, verify, verify” will be a key factor here.   The nagging question for all you “Green” Realtors out there working so hard to create branding and market niche – now what the heck do we call ourselves?

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Written By

Anna Altic – Village Real Estate Services. I’ve called Nashville home for the last 15 years and have been practicing (practice being the key word here) real estate for just over 6 years. In the fall of 2007, I went to a local German Festival that had a home tour, including a LEED certified property, and I instantly became enamored with the idea of eco friendly living (ok, so I’d had a little beer and the dual flush toilet rocked my world). I have since devoted much of my time and energies in to studying and espousing the benefits of better building technology within our local residential market and my proudest accomplishment thus far has been successfully leading the initiative to get over 25 green features added to our MLS search fields.

25 Comments

25 Comments

  1. Matthew Rathbun

    October 25, 2010 at 6:47 pm

    When is the FTC going to start looking into such frevilious claims such as “top producer” and ” professional agent”?

    Where do the limits of these ambiguous terms reach? When is it considered misleading? I suppose that if I’m a consumer who cares if a product is green, than i should know better than to just take the company’s word for it.

  2. Les

    October 25, 2010 at 8:52 pm

    I think this is a premature move by the FTC (because the market is too small to regulate like this, and the debate still rages on what is earth friendly and what is not), but I guess it will help Realtors and builders know what is and isn’t “eco friendly” or “green” so they can get off to a non litigious start when this green industry begins to expand.

    Hope to hear more on this in the future.

    • Anna Altic

      October 25, 2010 at 9:14 pm

      Les,

      I just wanted to clarify that the FTC is trying to regulate far more than green housing. I have seen “green” claims on cleaning supplies from companies who manufacture bleach, companies claiming something is biodegradable that would take years to break down, things made of recycled content that are made of less 10% recycled material, etc… The FTC is simply trying to create minimum standards so that consumers are more in the know.

      I agree that it’s going to make it harder for agents and sellers to find ways to market these types of home when they are just starting to really get some momentum in the market and I’ll be racking my brain on how to best work with it.

  3. Intown Elite

    October 26, 2010 at 9:16 am

    Well, some agents have been playing fast and loose with these terms, and it could use some regulation. If you Google “green homes atlanta” or “green real estate atlanta”, the first result is a page which claims, “Earthcraft & LEED Certified Homes.” However, the page then procedes to display simply everything on the local MLS. On our “Green Homes” page, we display only homes that have actually been certified in at least one green building program, (EarthCraft House, Energy Star Homes, LEED for Homes and NAHB National Green Building Program).

  4. Adam Gallegos

    October 26, 2010 at 10:11 am

    Though we try to do everything we can to operate as a legitimately environmentally friendly company, there has been so much green washing out there that we sparingly use the word “green” any more. For this reason, part of me welcomes the proposed regulations. But, another part of me is sick and tired of additional government regulation. There is so much hand holding going on out there that I feel like I am back in kindergarden.

  5. James ODonnell

    October 27, 2010 at 6:41 pm

    no one else that I can find has come to the conclusion that these terms are being banned

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