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!


Are the New FTC Guidelines Killing Green Marketing?

The Federal Trade Commission’s Green Guides have always suggested that marketers avoid general environmental terms like the word “green.” But the revised guides come down even stronger against such terms. This puts some marketers in a tight spot, especially if they have worked hard to brand their company and/or products “green.”

Does this mean the end of green marketing, or is there a bright side to the Guides? In my recent article published on GreenBiz.com, I explore the reasoning behind the guidelines, and point out a very compelling reason to follow them.

Read the full article here: Are the New FTC Guidelines Killing Green Marketing?




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!

FTC’s crackdown on Greenwashing – top 4 things Green marketers should know

Last February I wrote a short post about the FTC’s Green Guides – regulatory rules for Green marketing (Are Your Green Claims FTC Compliant?).  At that time common wisdom seemed to be that following the Green Guides, while a very good idea, was still largely a voluntary measure.

However, Greenwashing is a hot topic and one that has a lot of consumers up in arms (for good reason.)  The FTC  has started to enforce these rules seriously – and not only for big companies.  So if you’re not keen on the idea of being hounded by government regulators, it’s time to sit up and pay attention, and make sure you stay in the FTC’s good graces.

Green CSR strategist and Green marketing consultant Perry Goldschein recently posted an excellent article on this topic which I highly recommend reading.  Here’s an excerpt:

Up until recently, green marketing has been somewhat of a “wild west” as a result of increasing consumer interest, a lack of “truth in advertising” claims enforcement, a dearth of definitions or standards around green marketing claims, and an accompanying explosion of “eco-labels” (over 300 and counting).

That’s changing rapidly, as the FTC cracks down on “greenwashing” and soon issues new environmental guidelines. Following the end of a long, eight-year enforcement hiatus, the FTC has filed several greenwashing complaints and sent several dozen warnings to others since 2008. In fact, the FTC now considers prosecuting misleading green marketing claims as one of its seven priority areas for its consumer protection division.

Read the rest of Perry’s article here: “FTC Ending Green Marketing’s “Wild West?” Top 4 Things to Know.

Are Your Green Claims FTC Compliant?

FTC seal
It's a good idea to be aware of FTC guidelines when making green claims in your marketing.

In 1992, in response to a flurry of green marketing claims (the first wave of the green deluge we’re now experiencing), the Federal Trade Commission (FTC) released a series of guidelines for environmental advertising and marketing messages.  Known as the “Green Guides,” these rules are strictly voluntary and are not enforceable by law. (Yet.)  However, they are based on Section 5 of the Federal Trade Commission Act, which declares false or deceptive advertising illegal.  So don’t take them lightly.

If you’d like to read the Green Guides for yourself, you can do so here.

Otherwise, read on for the quick ‘n’ easy Green-Guides-in-a-Nutshell.

For today, let’s take a look at the four main points set forth in the “General Principles” section of the Guides.

1. Qualifications and disclosures: Language addressing green claims should be clear, prominent and understandable.  You should be able to back up any claims with proof.

2. Distinction between benefits of product, package and service: Make sure that if you make a claim for your product, it’s clear whether you’re referring to the product itself or its packaging.  (For instance, when using words like “recycled,” “recyclable” or “compostable”.)

3. Overstatement of environmental attribute: What if your manufacturing facility cut its use of chlorine bleach by 50% last year?  Sounds great, right?  You could get all sorts of great press!  But hang on.  What if your reduction consisted of your janitor using ¼ cup instead of ½ cup a week of the stuff when he cleans the urinals?  Pretty negligible – so button your lips.

4. Comparative claims: When you’re making comparisons you should:

  • Make clear what’s being compared.  Avoid vague statements like “10% less packaging.” It’s meaningless unless you qualify it like this: “10% less packaging than the leading brand,” or this: “New package – 10% less plastic!” (The word “new” makes it clear that you’re comparing it to your own old packaging.)
  • Be able to back up your claims with proof.

Of course, there’s more to it.  For example, the Guides go into far more detail on use of specific words like “refillable” and “ozone-friendly.”   I’d encourage anyone making claims of sustainability or eco-friendliness in their advertising to familiarize themselves with the Green Guides.  But there’s no need to sweat.  The suggestions just make good sense, and echo two of the major principles of green marketing: clarity and transparency.

What do you think?

Anne Michelsen is a freelance writer specializing in helping Green and renewable energy companies enjoy increased attention and greater sales through dynamic sales copy and insightful content.

Subscribe to Anne’s bi-weekly tips and insights into marketing, sales writing and sustainability, and get a complimentary copy of her Green marketing report, Making Sense of the Green Sector: What Every Marketer Should Know About Selling Sustainable Products and Services.