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