Green Marketing

What is it? Using claims about a product's environmental "friendliness" in order to promote the product Using claims about a product's environmental "friendliness" in order to promote the product

Examples of “green” advertising claims? biodegradable biodegradable compostable compostable recyclable/recycled recyclable/recycled environmentally safe environmentally safe ozone friendly 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 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 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 Keyes Fibre Company's claims for Chinet disposable tableware Keyes Fibre Company's Keyes Fibre Company's biodegradablebiodegradable compostable in municipal solid waste composting facilitiescompostable in municipal solid waste composting facilities RecyclableRecyclable In fact, according to the FTC In fact, according to the FTC Won’t degrade in landfillWon’t degrade in landfill Few municipal composting facilitiesFew municipal composting facilities No facilities accept it for recyclingNo 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 consumers generally can't tell whether a product will do what the advertiser claims degrade in a landfilldegrade in a landfill not deplete the ozone layernot deplete the ozone layer even if the claims are true, it may not be evident for five, ten, fifty or more years 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 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 labeling advertising advertising promotional materials promotional materials

Any form a message can take words words symbols symbols emblems emblems logos logos depictions depictions product brand names 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 not misleading substantiated in advance of the claim substantiated in advance of the claim burden of proof on advertiserburden 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 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 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; orin an appropriate composting facility; or a home compost pilea home compost pile

are deceptive if are deceptive if the item is not compostable in a home compost pile; andthe 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 soldthere 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 are deceptive unless the product or package can be collected, separated or otherwise recovered from the solid waste stream for reuse; orfor reuse; or in the manufacture or assembly of another package or productin the manufacture or assembly of another package or product through an established recycling programthrough 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 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 A claim of recyclability is not deceptive if only minor, incidental components are non-recyclable

Claims of recyclability have unique potential for deception because Claims of recyclability have unique potential for deception because not all communities have recycling facilities not all communities have recycling facilities not all facilities recycle the same products and packages 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 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 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 unless the claim is qualified to indicate the limited availability of recycling programs

Symbols that imply recyclability include three chasing arrows three chasing arrows FTC Guide says that, unless qualified, it means product or package is made of recycled materials as well as being recyclableFTC Guide says that, unless qualified, it means product or package is made of recycled materials as well as being recyclable SPI symbol SPI symbol code developed by the Society of the Plastics Industry to indicate the type of plastic from which product is madecode developed by the Society of the Plastics Industry to indicate the type of plastic from which product is made numbers run from 1 to 7numbers 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" "This bottle may not be recyclable in your area" "Recyclable in the few communities with facilities for foam polystyrene cups" "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 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: For example: ozone safeozone safe ozone friendlyozone friendly contains no CFCscontains no CFCs are deceptive if the product contains any ozone-depleting substance are deceptive if the product contains any ozone-depleting substance

Problem: all ozone is not alike: Problem: all ozone is not alike: ozone layer in upper atmosphere is necessary to prevent sun's harmful radiation from reaching earth ozone layer in upper atmosphere is necessary to prevent sun's harmful radiation from reaching earth ozone at ground level forms smog ozone at ground level forms smog can cause serious breathing problems can cause serious breathing problems "ozone safe" products should not harm the atmosphere at either level "ozone safe" products should not harm the atmosphere at either level

Green Power Green marketing heavily used in electricity generation/marketing Green marketing heavily used in electricity generation/marketing What is green power? What is green power? electric power that is electric power that is generated by renewable resourcesgenerated by renewable resources less polluting than fossil fuels and nuclear powerless polluting than fossil fuels and nuclear power

What types of power are “green”? Wind Wind Bioenergy Bioenergy Geothermal energy Geothermal energy Solar power Solar power Hydroelectric power Hydroelectric power

Why is green power attractive to consumers? Electricity generation is largest industrial polluter in US; currently produces: 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) 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) 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 40 percent of carbon dioxide emissions toxic-metal emissions (mercury and lead) toxic-metal emissions (mercury and lead) nuclear waste. nuclear waste.

What are the “dirtiest” energy sources? Coal Coal Oil Oil Nuclear power Nuclear power Natural Gas Natural Gas

What are the green power options? 1. Green Pricing Consumers do not have to change their electricity provider 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 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 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 Power’s Coolhome, Coolbusiness Green Mountain Power’s Coolhome, CoolbusinessCoolhome, CoolbusinessCoolhome, Coolbusiness

2. Green Marketing Sale of green power in competitive markets; consumers have option to choose among suppliers and service offerings Sale of green power in competitive markets; consumers have option to choose among suppliers and service offerings like choosing long-distance telephone carrierslike choosing long-distance telephone carriers As of October, 2003 green marketing was available in nine states As of October, 2003 green marketing was available in nine states all in the northeast except Texasall in the northeast except Texas not in Vermontnot in Vermont

3. Green Tags Tradable Renewable Certificates (TRCs) represent the environmental (non-power) attributes or benefits of renewable electricity generation 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 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 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 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 When power flows from the generator to your house, electrons get mixed together on the wires You can't specify which electrons you getYou can't specify which electrons you get you can't know for sure if they are being generated by "green" power sourcesyou 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 A number of mechanisms have been established to avoid consumer deception

1. Voluntary certification Green-e Green-e Green-e Establishes consumer protection and environmental standards for electricity products, and verifies that these products meet the standards. Establishes consumer protection and environmental standards for electricity products, and verifies that these products meet the standards. Standards include: 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 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 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 there are no specific purchases of nuclear power, and the product meets the Green-e new renewable requirement 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: 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) 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 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 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: 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 "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 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 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 Apparently the only green power option available in Vermont is Green Mountain Power's Cool Home projectCool Home Cool Home Customers make a $6 monthly tax- deductible contribution to the non-profit group Clean Air-Cool Planet Customers make a $6 monthly tax- deductible contribution to the non-profit group Clean Air-Cool Planet through the Vermont-based group NativeEnergy, new renewable energy projects are developed through the Vermont-based group NativeEnergy, new renewable energy projects are developed NativeEnergy wind farmswind farms farm methane systemsfarm methane systems