FTC Green Guide Action Leads to $350K Fine for Misrepresenting Insulation R-Value

Last week’s FTC-related action against an insulation marketer for misleading R-value and energy efficiency claims is proof that the agency has real teeth. Hopefully other insulation marketers will take the hint and upgrade their messaging to proper compliance standards.

Home insulation
According to the FTC’s “R-Value Rule,” any purveyor of home insulation must supply accurate product R-value information to its customers.

Just last Thursday, the U.S. Department of Justice prevailed in a court case against home insulation marketer Edward Sumpolec. Sumpolec had been doing business as Thermalkool, Thermalcool, and Energy Conservation Specialists, and was first cited by the FTC in 2009. Last week’s ruling by a federal court ordered him to pay a fine of $350,000.

Sumpolec had been making unqualified R-value and energy efficiency claims about liquid  coating and radiant barrier products, including such statements as “This . . . reflective coating will reduce wall and roof temperatures by 50-95 degrees . . .” and “Saves 40 to 60% on your energy bills.”

In addition, Sumpolec was cited for violating the FTC’s R-Value Rule, which states that insulation providers must have a reasonable basis for any r-value claims, must keep accurate records of those claims for three years, and must supply fact sheets about the R-value of their products to their customers.

This latest FTC-related action is proof that the agency has real teeth, and also that they don’t limit their scope only to manufacturers. Hopefully other insulation marketers will take the hint and upgrade their messaging to proper compliance standards.

View the FTC’s original press release here: http://www.ftc.gov/opa/2013/01/sumpolec.shtm

photo credit: pdz_house via photopin cc

White Paper Reveals Formula for FTC Green Guide Compliance

“The FTC Green Guides Made Simple” white paper reveals my Q.U.I.E.T. method for greater transparency – essential for green marketing compliance.

“The FTC Green Guides Made Simple” reveals my Q.U.I.E.T. method for greater transparency – essential for green marketing compliance.

Ultimately, the Federal Trade Commission’s Green Guides are a good thing for green business.  Having compliance guidelines in place levels the playing field for ethical companies. They also serve to protect consumers from misleading or deceptive tactics. In the long term, the resulting market transparency will reduce the backlash and consumer dissatisfaction associated with greenwashing.

However, in the short term, let’s face it: compliance can seem like just another set of hoops to jump through while we’re trying to juggle all our other day-to-day responsibilities.

That’s why I’ve developed my Q.U.I.E.T. method for achieving transparency – the heart of Green Guide compliance – in your marketing messages.

What is the Q.U.I.E.T. method?

Q.U.I.E.T. stands for five important actions to take for transparent green marketing:

  • Quanitfy and Qualify
  • Understand Sustainability
  • (Practice) Integrity
  • Empathize, and
  • Third Party Certify

Together, these five elements work together to help you achieve transparency easily and naturally. Once you have them working for you, compliance becomes much, much easier.

I’ve outlined the Q.U.I.E.T. method in detail in my latest white paper, The FTC Green Guides Made Simple: A Companion Guide for Achieving Green Marketing ComplianceRequest your free copy today!

 

FTC Takes First Action Since Release of Revised Green Guides

On October 25, the Federal Trade Commission cited two paint companies for misleading “Zero VOC” claims on paint can labels and promotional material. This is the first enforcement action taken by the FTC since releasing its updated green marketing guidelines. What are the lessons here? First…

Last week the FTC cited two paint companies for distributing misleading “Zero VOC” claims. Could this be the beginning of a major wave of Green Guides enforcement?

Less than a month after releasing its updated version of the Guides for the Use of Environmental Marketing Claims (Green Guides), the Federal Trade Commission has taken its first action concerning environmental claims since last April.

On October 25, the FTC cited two paint companies, Sherwin Williams (maker of Dutch Boy Refresh paint) and PPG Architectural Finishes, Inc. (a division of PPG Industries and manufacturer of Pure Performance paint), for misleading “Zero VOC”  claims on paint can labels and promotional material.

In both cases, the paints in question contained no or trace amounts of VOC’s in the base formulation. However, in numerous instances the colorants used to tint the paint add enough VOC’s that the final product cannot qualify as “Zero VOC.”

The FTC ruled that since base paint is designed to be tinted and is added to the paint at the time of purchase and at no additional charge, any reasonable consumer would assume the “Zero VOC” claim to apply to the tinted final product.

One of the companies, Sherwin Williams, had included a disclaimer on their promotional materials and on the backs of the paint cans, stating that “some colors may not be zero VOC after tinting with conventional colorants.”

However, the FTC ruled that since the “vast majority” of the colors offered result in VOC levels above trace amounts in the finished paint, the disclaimer was not sufficient to prevent deception. “Any reasonable consumer who saw the inconspicuous disclosure…would likely be deceived about the VOC content of Dutch Boy Refresh paints,” wrote the FTC in their complaint against the company.

Both companies have agreed to work with the FTC to prevent future deception in their advertising.

What are the lessons here?

First, take Green Guide compliance seriously.

The FTC announced their revised green marketing guidelines two full years ago, giving ample notice to companies that might be affected. Now that the revisions have been officially adopted, the FTC is likely to ramp up enforcement.

Second, green compliance demands that marketers think about the whole picture and put themselves in the shoes of the consumer.

Any analysis of the base paint entering the cans in the factory would uphold the “Zero VOC” claims. However, the end user doesn’t use base paint, they use tinted paint. If you make a claim, be sure it will hold up under real life circumstances.

And third, the FTC doesn’t give points for good intentions.

Sherwin Williams did include a disclosure about possible higher levels of VOC’s in tinted paint. Unfortunately it wasn’t adequate to convince the FTC

Even more than the literal truth of your green marketing claim, the FTC is concerned with how the end user interprets your claim – and whether he or she is adequately informed. When you make a green claim, double check the details. Make sure they’re clear and accurate (again, from the point of view of the consumer in real life situations.) When in doubt, err on the side of over-disclosure.

 

Want to know more about how you can be Green Guide compliant? Request a complimentary copy of my report, “The FTC Green Guides Made Simple: A Companion Guide for Achieving Green Marketing Compliance.”  It’s a must-have for anyone involved in marketing eco-friendly products or services.  It’s scheduled for release in just a few days, and you can be one of the first to get it! Just contact me and ask for your free copy of the “Green Guides Made Simple.”

Guest post: Software to Mitigate Risk of Carbon Greenwashing

Hunter Richards, Accounting Market Analyst
Accounting Market Analyst Hunter Richards writes about accounting software, with particular interests in "green" innovations and compliance.

With the FTC becoming increasingly serious about enforcing its Green marketing regulations, many companies are looking for ways to ensure that their campaigns remain compliant.

As always in Green marketing, transparency is paramount.  And having solid proof of environmental performance is an excellent way to remain transparent.

While carbon emissions are not the only factor in establishing a company’s environmental footprint, they definitely are a major one, and one currently given heavy emphasis in the media.  In today’s guest post,  expert market analyst Hunter Richards discusses the role of Enterprise Carbon Accounting software in mitigating risk of greenwashing in this area – and five action categories necessary to eliminate it altogether.

ECA Software and Carbon Accounting: The New Threats to Greenwashers

Greenwash (verb, \ˈgrēn-wȯsh\) – to market a product or service by promoting a deceptive or misleading perception of environmental responsibility.

Companies are launching major ad campaigns to show off their eco-friendly products and services, but many of these claims are questionable. Greenwashing is threatenening the credibility of legitimate environmental marketing and turning would-be green consumers away from the hype. So how can we know who’s telling the truth about supposedly green products and who’s just greenwashing? We can increase transparency and put an end to greenwashing through standardized adoption of carbon accounting by these businesses. A new kind of software is also a key part of the solution.

The increasing scrutiny of green business campaigns is similar to the demand for transparent financial reporting, especially in the wake of the recent financial crisis. The U.S. is still a leader in financial accounting, but we need to develop the same infrastructure for environmental accounting to restore credibility. Enterprise Carbon Accounting (ECA) software is becoming the foundation of this infrastructure, and the market is growing. ECA software enables companies to track their carbon emissions footprint and more easily find existing opportunities to lower their costs and reduce waste. It’s strengthening the potential for corporate environmental transparency. When the transition fully takes hold, greenwashers could disappear entirely.

For ECA software and environmental accounting adoption to make greenwashing obsolete, we need action in five main categories:

  • Clear government action on regulations;
  • Adoption of carbon accounting principles;
  • Expansion of Scope 3 emissions accounting;
  • Better green business incentives; and
  • Demanding, informed consumers.

Clear Government Action on Regulations

lncreased coverage of existing new policies and decisive action on new legislation could quickly spread carbon accounting and the use of ECA software. The EPA’s Mandatory Greenhouse Gas Reporting Rule, which requires companies that emit 25,000 metric tons or more of greenhouse gases annually to disclose emissions to the EPA, could be expanded to include smaller businesses as well. Decisive action on new legislation in the future could also help dramatically in expanding ECA software adoption and ending greenwashing.

Adoption of Carbon Accounting Principles

Stricter requirements for disclosure of standardized corporate emissions information, now more feasible than before with the adoption of ECA software, would provide a precise way to examine a company’s environmental record. When such a measure exists and becomes widely used, one will only need to refer to these numbers to get an impression of a company’s overall environmental performance. It will be a lot more difficult to conceal adverse impacts on the environment in implementing greenwashing campaigns.

Expansion of Scope 3 Emissions Accounting

Mandatory inclusion of suppliers’ emissions and other indirect emissions sources in company environmental reports (Scope 3) would prevent under-reporting of emissions; absolutely all emissions would be measured and reported without room for loopholes. Requiring Scope 3 measurement would also spread more adoption of general carbon accounting throughout the supply chain. When a company must account for Scope 3, it must ask its suppliers to track their carbon footprints as well to produce the required report. A chain reaction could quickly increase the number of companies with comprehensive carbon emissions reports and, in doing so, increase overall environmental business transparency.

Better Economic Incentives For Going Green

Using ECA software to identify eco-friendly savings opportunities can make it cheaper to truly go green, making it unneccessary for businesses to greenwash in the first place. Businesses will often find that shrinking their carbon footprints and minimizing costs can go hand-in-hand. Government incentives can also encourage eco-friendly business practices. ECA software could alert users to new opportunities to take advantage of government incentives as more of them emerge, pushing green sincerity into the best interests of businesses.

Demanding, Informed Consumers

Demanding the hard numbers from standardized carbon accounting reports, while boycotting the proven greenwashers, forces businesses with green marketing campaigns to prove their sincerity or risk failure. After all, fully informed consumers make deception by greenwashing impossible. When standardized carbon accounting is required and ECA software is available, companies won’t have any more excuses to conceal their carbon footprint. The remaining work will be done by informed, rational consumers.

This post was adapted from the original article by Hunter Richards, posted 10/25/2010 on the Software Advice blog.

Check out the full article: Software to Hold “Greenwashers” Accountable.

What do YOU think? Have you struggled with carbon compliance and/or Greenwashing issues?  How would Carbon Accounting Software affect your marketing and/or other aspects of your business?  Post your comments below or click the link to the original article and let’s get some discussion going on this important topic!