Green Marketing

What is it?

Using claims about a product's

environmental "friendliness" in order
to promote the product

Examples of green advertising

claims?

biodegradable
compostable
recyclable/recycled
environmentally safe
ozone friendly

Why do companies use it?

Research shows that consumers

prefer--and are willing to spend more
money on--products they perceive as
environmentally safe
More than half of American
consumers have purchased a product
because of a label that said it was
environmentally safe or
biodegradable

Are there problems of deception

with green claims?

Keyes Fibre Company's claims for Chinet

disposable tableware
biodegradable
compostable in municipal solid waste
composting facilities
Recyclable

In fact, according to the FTC

Wont degrade in landfill
Few municipal composting facilities
No facilities accept it for recycling

Why are consumers fooled by such

claims?

consumers generally can't tell

whether a product will do what the
advertiser claims
degrade in a landfill
not deplete the ozone layer

even if the claims are true, it may

not be evident for five, ten, fifty or
more years

As a result of concerns about

growing use of such claims, the FTC
issued Guides for the Use of
Environmental Marketing Claims

What do the Guides cover?

Any way in which a message can be
received
labeling
advertising
promotional materials

Any form a message can take

words
symbols
emblems
logos
depictions
product brand names

260.6 General Principles

(a) Any qualifications or disclosures
should be sufficiently clear,
prominent and understandable to
prevent deception
(b) Claim should make clear whether it
applies to the product or the package
(c) Claims should not overstate the
environmental attribute or benefit

260.7 Environmental Marketing

Claims
(a) General claims (e.g., eco-safe)
must be
not misleading
substantiated in advance of the claim
burden of proof on advertiser

(b) Claims of degradability,

biodegradability, and photodegradability

are deceptive unless there is

scientific evidence that the entire
product or package will completely
break down and return to nature (i.e.
decompose) within a reasonably
short period of time

(c) Claims of compostability (of the

product or package)
are deceptive unless all the materials
in the product or package will break
down into usable compost in a safe
and timely manner
in an appropriate composting facility; or
a home compost pile

are deceptive if
the item is not compostable in a home
compost pile; and
there are no institutional or municipal
composting facilities in the community
where the item is sold

(d) Claims of recyclability

are deceptive unless the product or
package can be collected, separated or
otherwise recovered from the solid waste
stream
for reuse; or
in the manufacture or assembly of another
package or product
through an established recycling program

If only part of a package or item is

recyclable, any claim of recyclability
must be adequately qualified to
avoid consumer deception
A claim of recyclability is not
deceptive if only minor, incidental
components are non-recyclable

Claims of recyclability have unique

potential for deception because
not all communities have recycling
facilities
not all facilities recycle the same
products and packages

As a general rule, use of the term "recyclable"

and/or use of symbols that imply recyclability are
deceptive
unless collection sites for recycling the material
are available to a substantial majority of
consumers or communities
even if collection sites are established in a
significant percentage of communities or available
to a significant percentage of the population
unless the claim is qualified to indicate the limited
availability of recycling programs

Symbols that imply recyclability include

three chasing arrows
FTC Guide says that, unless qualified, it means
product or package is made of recycled
materials as well as being recyclable

SPI symbol
code developed by the Society of the Plastics
Industry to indicate the type of plastic from
which product is made
numbers run from 1 to 7

Qualifications that adequately notify

consumers of limited availability of
recycling programs include
"This bottle may not be recyclable in your
area"
"Recyclable in the few communities with
facilities for foam polystyrene cups"
providing the approximate number or
percentage of communities or population
to whom programs are available

(h) Claims relating to the preservation

of the ozone layer
For example:
ozone safe
ozone friendly
contains no CFCs

are deceptive if the product contains

any ozone-depleting substance

Problem: all ozone is not alike:

ozone layer in upper atmosphere is
necessary to prevent sun's harmful
radiation from reaching earth
ozone at ground level forms smog
can cause serious breathing problems

"ozone safe" products should not

harm the atmosphere at either level

Green Power

Green marketing heavily used in

electricity generation/marketing
What is green power?
electric power that is
generated by renewable resources
less polluting than fossil fuels and
nuclear power

What types of power are green?

Wind
Bioenergy
Geothermal energy
Solar power
Hydroelectric power

Why is green power attractive to

consumers?

Electricity generation is largest industrial

polluter in US; currently produces:
two-thirds of the annual U.S. emissions of
sulfur dioxide (main cause of acid rain)
30 percent of the nitrogen oxide emissions
(stress forest ecosystems; combine with
organic compounds in sunlight to form
smog)
40 percent of carbon dioxide emissions
toxic-metal emissions (mercury and lead)
nuclear waste.

What are the dirtiest energy

sources?

Coal
Oil
Nuclear power
Natural Gas

What are the green power options?

1. Green Pricing
Consumers do not have to change their
electricity provider
Customers choose to pay a premium on
their electricity bill to cover the extra cost
of purchasing clean, sustainable energy
As of March 2003, more than 300
electricity providers in 32 states have
implemented green pricing options or
announced plans to do so
Green Mountain Powers Coolhome,
Coolbusiness

2. Green Marketing
Sale of green power in competitive
markets; consumers have option to
choose among suppliers and service
offerings
like choosing long-distance telephone carriers

As of October, 2003 green marketing was

available in nine states
all in the northeast except Texas
not in Vermont

3. Green Tags
Tradable Renewable Certificates (TRCs) represent
the environmental (non-power) attributes or
benefits of renewable electricity generation
consumer pays for the benefit of adding clean,
renewable energy generation to the regional or
national electricity grid
provides same environmental benefit as
purchasing green pricing or green marketing
product
provide green option for people in states where
green pricing/marketing not available

Consumer Protection Issues in

Green Power

When power flows from the

generator to your house, electrons
get mixed together on the wires
You can't specify which electrons you get
you can't know for sure if they are being
generated by "green" power sources

A number of mechanisms have been

established to avoid consumer
deception

1. Voluntary certification

Green-e
Establishes consumer protection and environmental
standards for electricity products, and verifies that these
products meet the standards.
Standards include:
50% or more of the electricity supply comes from one or
more of these eligible renewable resources: solar, wind,
geothermal, biomass, and small or certified low-impact
hydro facilities
if a portion of the electricity is non-renewable, the air
emissions are equal to or lower than those produced by
conventional electricity
there are no specific purchases of nuclear power, and
the product meets the Green-e new renewable requirement

2. State standards

In 2002 Illinois established a "green power

standard" for green power claims. The standard
establishes three tests:
100% of the power must come from new clean
power sources (i.e., coming online after January 1,
2002)
at least 2/3 of the power must be produced by wind
or solar energy, with the remainder from other
renewable energy sources such as landfill gas, small
hydro, and biopower
the power purchase must create clear air quality
benefits for the Illinois airshed

3. National Association of Attorneys

General (NAAG)--Environmental
Marketing Guidelines for Electricity

Provisions include:
term "green" and other similarly general
statements of environmental benefit should be
used with caution; every implied representation
of environmental benefit must be substantiated
term "clean energy" means energy whose
generation does not cause significant emissions
a "renewable" energy source is one which is
naturally replenishable and is replenished on
some reasonable time frame

Green Power in Vermont

Apparently the only green power option

available in Vermont is Green Mountain
Power's Cool Home project
Customers make a $6 monthly taxdeductible contribution to the non-profit
group Clean Air-Cool Planet
through the Vermont-based group
NativeEnergy, new renewable energy
projects are developed
wind farms
farm methane systems