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.)

•    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?