Eco-friendly products are gaining in market popularity as consumers become more aware of realistic environmental protection options and the impact they can have on personal choice. Environmental communication guidelines need to be considered as the demand for green products grows. Purveying in a retail capacity, you must be sure you don’t fall into the trap of letting your products “shine” too much. Consumers care, so don’t disappoint them or confuse them by making misleading environmental marketing claims. If the item is eco-friendly, say as much, but don’t use some logical loophole to label environmentally friendly just to sell a product.
Environmental communication guidelines can prove very expensive should a retailer ignore them when making environmental marketing claims. Recently, through either ignorance of existing environmental communication guidelines, or complete disregard for them, poor labeling led to misleading environmental claims that cost major retailers like Bad Bath & Beyond, Nordstrom, and JC Penney a fortune. The US Federal Trade Commission leveled fines totaling $1.3 million against them (FTC, 2015, Ref. 1). The reason was marketing textiles composed of chemically-processed bamboo into rayon as “green,” when in fact they were not green in accordance with existing standards. The FTC Textile Fiber Products Identification Act says “textiles can only be called bamboo if they are made directly from actual bamboo fiber” (FTC, 2015, Ref. 2). However, the products sold by the retailers were labeled 100% bamboo, when the final fiber used for their production was actually 100% rayon; rayon that was processed from bamboo.
The charges weren’t made until after the brands continued marketing and selling such misleadingly labeled products as “green” products despite specific and clear warnings from the FTC as far back as 2010 (FTC, 2010, Ref. 3).
In 2013, the FTC fined another group of companies for exactly the same reason. It is paramount that environmental communication guidelines be followed (FTC, 2013, Ref. 4).
Is your company affected?
Examples like these not-so-eco-friendly products can be catalysts for legal action, and the questions that need to be asked are: how do such misleading environmental claims affect your company and what should you do to avoid making them?
The term the FTC uses for marketing non eco-friendly products as eco-friendly, or any misleadingly-labeled merchandise, is “bamboozling.” The practice is not uncommon, and sometimes not even intentional; you’re not intentionally breaking any environmental communication guidelines if you don’t know they exist. But in the end, either mistake proves not only expensive in fines, but also in terms of revised marketing campaigns and labelling. These expenses easily total millions of Euros when the smoke settles. In addition, bamboozling may damage your reputation on the market. Even worse, the reputation of your entire industry as well as the sustainability experts can be collaterally affected.
Making misleading claims may be a risk to other textile products, too. One example is garments made from recycled polyester. Recycling post-consumer polyester has been increasingly used as an “eco-friendly” alternative and an environmentally friendly fiber production method. The advantages of its production have facilitated savings between 40 and 85 percent on non-renewable energy resources when compared to virgin polyester (Li Schen et al., 2010, Ref. 5). Dependent upon the level of technology involved in the production, recycled PET fibers can be compared to cotton, modern viscose, Tencel, and PLA in terms of supposed impact on global warming (ibid.).
That being said, potential issues have arisen regarding the increased market demand for recycled polyester. This clearly imposes difficulties on supply of post-consumer PET, pushing the use of virgin bottles to meet demand. In relation to the environmental claims, this could cause controversial reactions surrounding the environmental benefits of the product.
The traceability of recycled polyester is potentially another considerable issue. Recycled polyester products are entirely composed of post-consumer PET or mixed with virgin polyester. But at the end of the day, according to existing environmental communication guidelines it’s the amount of recycled fibers that determines whether or not the output can be marketed as a green product. This means providing reliable and detailed labeling is a solid measure of protection against consumers making the wrong choice. Even if they do, you can indicate the clearly marked label, and the issue is resolved. In this way you can have your cake and eat it, too. Just sell the recycled polyester products which have a less eco-friendly fiber count at a mark-down and meet the demand. If you clearly indicate which items are green products, and which are not green products, there’s no issue. Environmental communication guidelines aren’t to restrict retailers; they’re to protect both retailer and consumer.
Bottom line, studies show that recycled polyester is more environmentally friendly, but improving traceability systems is necessary to increase the credibility of products composed of recycled polyester.
Environmental Marketing Claims: Playing by the Rules
Avoiding the risks will mean playing by the rules. Following environmental communication guidelines developed by policy makers and recognized standardization organizations for labeling green products is a good framework to build on.
Label standardizations bring global recognition to your brand and products. They provide legitimacy to the environmental claims disclosed on those products, and simultaneously meet objective benchmarks when considered against eco-friendly global options (ISO 14020:2000, 2012, Ref. 6).
Under the FTC Textile Fiber Identification Act, retailers are obliged to disclose in labeling, invoicing and advertising the fiber-count of their products (FTC, 1984, Ref. 7; FTC, 2012, Ref. 8). In addition, the Textile Fiber Rule sets a mandatory requirement stating the generic names and percentages (by weight) of all fibers that are contained in the product (FTC, 2014, Ref. 9).
On the global market, the ISO 14020:2000 standard is offering different categories for making environmental product claims. Depending on how in-depth you look to ensure a given product’s environmental marketing claims are legitimate, your company may benefit via basic rules like ISO 14021:1999, which applies for a third-party labeling organization under ISO 14024:1999, or conducting an LCA under the ISO 14025:2006 standard with an external review, and offering a basis for product comparison that is noticeably transparent (ISO 14020:2000, 2012, Ref. 6).
Basically, there are quantifiable advantages to following established environmental communication guidelines.
These regulations are ensuring truthful information is given to the customer, while simultaneously providing effective ways of ensuring products represented as green products actually are eco-friendly.
According to the EU Directive on Unfair Commercial Practices (2013, Ref. 10), misleading environmental claims are on the same level as any unfair business-to-consumer commercial practice, and are clearly against the law.
Sometimes violation is in exaggeration, too. Claims must not over-emphasize some singular positive aspect while hiding trade-offs or negative impacts to the environment (ibid.). You can’t call a line of chemically derived paints a green product just because that happens to be their color.
The consumer demand for eco-friendly products is pressuring policy-makers to develop clear policy regulations necessary for ensuring a greener and fairer global market. Like it or not, these are the new rules of the game.
How to take the next step
Don’t avoid the challenge of engineering correct environmental marketing claims in accordance with environmental communication guidelines – even if they should be substantial. The above-mentioned global retailers were confronted with the financial consequences, and this can happen with any company on the market that does not provide careful, transparent communication regarding its environmental claims. If you’ve got to move the inventory, do it honestly.
The questions are: is your method of sale conveying the truth to your customers? And what can you do to turn your customer value into business value? If you’ve got inventory which isn’t environmentally friendly, you’ve still got to move it.
Defining your goals and objectives, having a clear idea about your customer’s expectations, and improving your sustainability communication strategy are good ways to begin.
The better your green products are, the more successful your brand will be. Providing sustainable operations means having a good overview of your manufacturing process and supply chain, while ensuring a solid product portfolio.
Learn more on how to use Sustainability Strategy to create Business Value.
Contact us for further informed discussion.
- Federal Trade Commission (2015). Retrieved March 2016, from: https://www.ftc.gov/news-events/press-releases/2015/12/nordstrom-bed-bath-beyond-backcountrycom-jc-penney-pay-penalties
- Federal Trade Commission (2015). Retrieved March 2016, from: https://www.ftc.gov/bamboo-textiles
- Federal Trade Commission (2010). Retrieved March 2016, from: https://www.ftc.gov/news-events/press-releases/2010/02/ftc-warns-78-retailers-including-wal-mart-target-kmart-stop
- Federal Trade Commission (2013). Retrieved March 2016, from: https://www.ftc.gov/news-events/press-releases/2013/01/four-national-retailers-agree-pay-penalties-totaling-126-million
- Li Schen, Ernst Worrell & Martin K. Patel (2010). Open-loop recycling: A LCA case study of PET bottle-to-fibre recycling. Resources Conservation Recycling (2010), doi:10.1016/j.resconrec.2010.06.014. Retrieved March 2016, from: http://www.eco-core.eu/LCA%20Article%20in%20Press%2007.09.10.pdf
- ISO 14020:2000 (2012). Environmental Labels and Declarations. How ISO Standards help. Retrieved March 2016, from: http://www.iso.org/iso/environmental-labelling.pdf
- Federal Trade Commission (1984). Textile Fiber Products Identification Act. Pub L. No. 98-417. Retrieved March 2016, from: https://www.ftc.gov/enforcement/statutes/textile-fiber-products-identification-act
- Federal Trade Commission (2012). Federal Register. Guides for the Use of Environmental Marketing Claims; Final Rule. 16CFR. Part 260. Retrieved March 2016, from: https://www.ftc.gov/sites/default/files/documents/federal_register_notices/guides-use-environmental-marketing-claims-green-guides/greenguidesfrn.pdf
- Federal Trade Commission (2014). Textile Fiber Rule. 16 CFR Part 303. Retrieved March 2016, from: https://www.ftc.gov/system/files/documents/federal_register_notices/2014/04/140404textilefrn.pdf
- European Commission (2013). Communication from the commission to the European Parliament, the Council and the European Economic and Social Committee. On the application of the Unfair Commercial Practices Directive – Achieving a high level of consumer protection building trust in the Internal Market.
Retrieved March 2016, from: http://ec.europa.eu/justice/consumer-marketing/files/ucpd_communication_en.pdf