New rules to restrict deceptive green marketing, AKA “greenwashing,” would reveal the true nature of brands’ sustainable claims

For the average consumer, navigating the terms used by brands to describe their products’ climate and environmental impact (i.e. ”low carbon”, “sustainable”, “recyclable”, “recycled content” and more) is a daunting task. It is frustrating for consumers who increasingly want to choose sustainable products, but aren’t given clear and digestible information by brands to make informed purchasing decisions.

Without regulatory standards preventing companies from exaggerating their sustainability commitments, consumers are left with no way of knowing how environmentally friendly—or not—products are. Therefore resulting in the U.S. Federal Trade Commission (FTC) taking notice of the problem.

The FTC is considering new rules to restrict deceptive or unfair green marketing, or “greenwashing,” by reviewing and updating its Guide for the Use of Environmental Marketing Claims, known colloquially as its “Green Guides,” which were last revised in 2012. The FTC has asked the public to comment on the issue by April 24, 2023.

Philip Finnance, head of marketing at Oceanworks, answered several questions about the FTC’s proposed changes. Oceanworks partners with a global network of recycled plastic suppliers to provide sustainable plastic manufacturing solutions and ethical marketing guidance to brands. Finnance works closely with brands to help them take action against plastic pollution and clearly communicate their sustainability story to consumers.

Q&A WITH PHIL FINNANCE, HEAD OF MARKETING, OCEANWORKS

As a marketing leader working in the sustainability space, what are your thoughts on the FTC’s announcement?

PF:  Reform surrounding the FTC’s “Green Guides” is desperately needed. In the U.S., one of the largest issues in sustainable products is that companies leverage buzzwords that make it difficult for consumers to know which products are making a real impact, and which claims are marketing fluff.

We know that big box retailers (like Walmart and Target) are eager to have products on their shelves made from recycled materials since a growing number of consumers have interest in these types of items. Therefore, brands are following suit and have rushed to capitalizing on  current consumer interests. In recent years, some brands have been called out for “greenwashing” because their products aren’t as environmentally friendly as their marketing makes them out to be. Greenwashing muddies the waters for consumers who are forced to wade through ambiguous language to delineate which products are actually made sustainably. When consumers are misled to buy deceptively marketed products, it is at the detriment of brands that are legitimately investing in sustainable materials and processes. 

What’s an example of ambiguous language the FTC wants to crack down on?

PF: Putting a label on a product that vaguely states it contains “recycled material” isn’t transparent enough for consumers to make an informed purchasing decision. What percentage of the product is made from recycled materials? Where do those recycled materials come from?

We talk about this in depth with the brands Oceanworks has partnered with—there are key differences between recycled ocean plastic, reclaimed ocean plastic, and recycled ocean-bound plastic. Most consumers in the U.S. don’t know the difference between these terms. As a result we have established a rigorous review process  with our brand partners to make sure that products or packaging created with ocean-bound plastic are clearly labeled. For example, I encourage brands to move away from using umbrella terms like “recycled ocean plastic,” which in our opinion is not transparent enough and can often lead consumers to mistakenly believe the source of those recycled materials was pulled directly from the open ocean, not from a stream of discarded plastic heading toward the ocean.

In working with brand partners from around the world, we’ve learned consumers in Europe, Australia, and New Zealand are familiar with specific terms like ocean-bound plastic. Here in the U.S., there hasn’t been enough pressure on brands to be more explicit about the materials that products are made of, so U.S. consumers haven’t been as exposed to those terms and definitions. As the U.S. improves its sustainability policies and mandates better transparency in labeling, consumers will gain more knowledge and confidence in the products they’re buying.

Learn more about Oceanworks PCR Collection Areas

What impact could stricter Green Guides have on marketing teams? 

PF: Stricter guides will force marketing teams to become more educated in sustainability. The proposed FTC changes will help marketers glean a better understanding of what greenwashing is, and what it isn’t. Previously, brands were not held to any standards and only risked being called out by consumers or watchdogs for greenwashing if their marketing practices weren’t perceived as being honest. With these proposed changes, there could be real penalties and fines for the use of deceptive language around environmental impact or the use of recycled materials.

At the end of the day, this change is necessary. If your company is going to use recycled materials in your products, there are a few reasons you might be doing that. For one, your brand cares about the environment and its carbon footprint. Conversely, your customers are demanding it. Brands need to have a plan when it comes to sustainability, because it will ultimately influence whether a consumer buys your product or another. At Oceanworks, we work closely with brands to guide their marketing messaging, making sure their sustainability story is clear, compelling, and completely accurate.

Are there any downsides to the FTC’s proposed changes?

PF: There are a lot of companies that are nervous about being called out for greenwashing, and perhaps it prevents them from taking steps to becoming more sustainable, and some may argue that the FTC’s new Green Guides will scare companies that are close to adopting more sustainable materials for fear of being put under a microscope. My hope is that they do the opposite and highlight the need for transparency. If you say you’re using 5% recycled plastic, and you’re being honest about the amount of material that’s recycled, what’s the issue? I think consumers would rather see honest progress, even if it starts off incrementally. Small actions now lead to bigger action down the road. 

Stricter rules surrounding sustainability marketing are important and necessary. The Oceanworks team and I are fully aligned with and in support of the FTC’s proposed changes to their Green Guides. To reiterate,I hope it doesn’t hinder brands from getting involved sooner because they fear scrutiny. If they begin to feel lost, I hope they overcome that by finding the right sustainability partners (like Oceanworks) to help them navigate their product strategy and communications plans. Ultimately, policies that focus more directly on materials, (versus marketing), will put a cap on the production of virgin plastic and accelerate adoption of post-consumer recycled material in new products.

How do you think these changes could influence consumer decisions?

PF: When I look at two competing products on the shelf, and one item’s label says it’s made from recycled ocean plastic, and the other item’s label says the product is made from 75% ocean-bound plastic sourced from Southeast Asia, with a seal verifying the source of that recycled material, as a consumer, I appreciate that I can actually picture where the materials came from. If sustainability was a driver of my purchase, I would then be more inclined to purchase the item with the additional transparency.

At Oceanworks, we often hear our brand partners say that their product packaging is too small to include detailed information about material sourcing and environmental impact. New technology has created several workarounds to this challenge, such as using QR codes to expand a brand’s storytelling space and invite customers to learn more about a product's sustainability. 

It does require the brand to commit/invest in consumer education and storytelling, but when done correctly, consumers start to feel more confident in their choices and those investments inevitably pay off. Consumers feel good about buying their products knowing that they are making an informed, eco-friendly purchase.

The FTC has opened this topic for comment to the public with a deadline of April 24, 2023. If you're interested in entering a comment, follow the instructions published here.