Green MarketingGreen Marketing

What is it?What is it?

Using claims about a product's Using claims about a product's environmental "friendliness" in order environmental "friendliness" in order to promote the productto promote the product

Examples of “green” advertising Examples of “green” advertising claims?claims?

biodegradablebiodegradable compostablecompostable recyclable/recycledrecyclable/recycled environmentally safeenvironmentally safe ozone friendlyozone friendly

Why do companies use it?Why do companies use it?

Research shows that consumers Research shows that consumers prefer--and are willing to spend more prefer--and are willing to spend more money on--products they perceive as money on--products they perceive as environmentally safeenvironmentally safe

More than half of American More than half of American consumers have purchased a product consumers have purchased a product because of a label that said it was because of a label that said it was environmentally safe or environmentally safe or biodegradablebiodegradable

Are there problems of deception Are there problems of deception with “green” claims?with “green” claims?

Keyes Keyes FibreFibre Company's Company's claims for Chinet claims for Chinet disposable tablewaredisposable tableware• biodegradablebiodegradable• compostable in municipal solid waste compostable in municipal solid waste

composting facilitiescomposting facilities• RecyclableRecyclable

In fact, according to the FTCIn 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 Why are consumers fooled by such claims?claims?

consumers generally can't tell consumers generally can't tell whether a product will do what the whether a product will do what the advertiser claimsadvertiser 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 even if the claims are true, it may not be evident for five, ten, fifty or not be evident for five, ten, fifty or more yearsmore years

As a result of concerns about As a result of concerns about growing use of such claims, the FTC growing use of such claims, the FTC issued Guides for the Use of issued Guides for the Use of Environmental Marketing ClaimsEnvironmental Marketing Claims

What do the Guides cover?What do the Guides cover?

Any way in which a message can be Any way in which a message can be receivedreceived

labelinglabeling advertisingadvertising promotional materialspromotional materials

Any form a message can takeAny form a message can take wordswords symbolssymbols emblemsemblems logoslogos depictionsdepictions product brand namesproduct brand names

260.6 General Principles260.6 General Principles

(a) Any qualifications or disclosures (a) Any qualifications or disclosures should be sufficiently clear, should be sufficiently clear, prominent and understandable to prominent and understandable to prevent deceptionprevent deception

(b) Claim should make clear whether it (b) Claim should make clear whether it applies to the product or the packageapplies to the product or the package

(c) Claims should not overstate the (c) Claims should not overstate the environmental attribute or benefitenvironmental attribute or benefit

260.7 Environmental Marketing 260.7 Environmental Marketing ClaimsClaims

(a) General claims (e.g., “eco-safe”) (a) General claims (e.g., “eco-safe”) must bemust be

not misleadingnot misleading substantiated in advance of the claimsubstantiated in advance of the claim

• burden of proof on advertiserburden of proof on advertiser

(b) Claims of degradability, (b) Claims of degradability, biodegradability, and photodegradabilitybiodegradability, and photodegradability

are deceptive unless there is are deceptive unless there is scientific evidence that the entire scientific evidence that the entire product or package will product or package will completelycompletely break down and return to nature (i.e. break down and return to nature (i.e. decompose) within a reasonably decompose) within a reasonably short period of timeshort period of time

(c) Claims of compostability (of the (c) Claims of compostability (of the product or package)product or package)

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

are deceptive ifare deceptive if• the item is not compostable in a home the item is not compostable in a home

compost pile; andcompost pile; and• there are no institutional or municipal there are no institutional or municipal

composting facilities in the community composting facilities in the community where the item is soldwhere the item is sold

(d) Claims of recyclability(d) Claims of recyclability are deceptive unless the product or are deceptive unless the product or

package can be collected, separated or package can be collected, separated or otherwise recovered from the solid waste otherwise recovered from the solid waste streamstream• for reuse; orfor reuse; or• in the manufacture or assembly of another in the manufacture or assembly of another

package or productpackage or product• through an established recycling programthrough an established recycling program

If only part of a package or item is If only part of a package or item is recyclable, any claim of recyclability recyclable, any claim of recyclability must be adequately qualified to must be adequately qualified to avoid consumer deceptionavoid consumer deception

A claim of recyclability is not A claim of recyclability is not deceptive if only minor, incidental deceptive if only minor, incidental components are non-recyclablecomponents are non-recyclable

Claims of recyclability have unique Claims of recyclability have unique potential for deception becausepotential for deception because

not all communities have recycling not all communities have recycling facilitiesfacilities

not all facilities recycle the same not all facilities recycle the same products and packagesproducts and packages

As a general rule, use of the term "recyclable" As a general rule, use of the term "recyclable" and/or use of symbols that imply recyclability are and/or use of symbols that imply recyclability are deceptivedeceptive

unless collection sites for recycling the material unless collection sites for recycling the material are available to a are available to a substantial majority of substantial majority of consumers or communitiesconsumers or communities

even if collection sites are established in a even if collection sites are established in a significant percentage of communities or significant percentage of communities or available to a significant percentage of the available to a significant percentage of the populationpopulation

unless the claim is qualified to indicate the unless the claim is qualified to indicate the limited availability of recycling programslimited availability of recycling programs

Symbols that imply recyclability includeSymbols that imply recyclability include three chasing arrowsthree chasing arrows

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

SPI symbolSPI symbol• code developed by the Society of the Plastics code developed by the Society of the Plastics

Industry to indicate the type of plastic from Industry to indicate the type of plastic from which product is madewhich product is made

• numbers run from 1 to 7numbers run from 1 to 7

Qualifications that adequately notify Qualifications that adequately notify consumers of limited availability of consumers of limited availability of recycling programs includerecycling programs include

"This bottle may not be recyclable in your "This bottle may not be recyclable in your area"area"

"Recyclable in the few communities with "Recyclable in the few communities with facilities for foam polystyrene cups"facilities for foam polystyrene cups"

providing the approximate number or providing the approximate number or percentage of communities or population percentage of communities or population to whom programs are availableto whom programs are available

(h) Claims relating to the preservation (h) Claims relating to the preservation of the ozone layerof the ozone layer

For example:For example:• ozone safeozone safe• ozone friendlyozone friendly• contains no CFCscontains no CFCs

are deceptive if the product contains are deceptive if the product contains any ozone-depleting substanceany ozone-depleting substance

Problem: all ozone is not alike:Problem: all ozone is not alike: ozone layer in upper atmosphere is ozone layer in upper atmosphere is

necessary to prevent sun's harmful necessary to prevent sun's harmful radiation from reaching earthradiation from reaching earth

ozone at ground level forms smogozone at ground level forms smog• can cause serious breathing problemscan cause serious breathing problems

"ozone safe" products should not "ozone safe" products should not harm the atmosphere at either levelharm the atmosphere at either level

Green PowerGreen Power

Green marketing heavily used in Green marketing heavily used in electricity generation/marketingelectricity generation/marketing

What is green power?What is green power? electric power that iselectric power that is

• generated by renewable resourcesgenerated by renewable resources• less polluting than fossil fuels and less polluting than fossil fuels and

nuclear powernuclear power

What types of power are “green”?What types of power are “green”?

Wind Wind BioenergyBioenergy Geothermal energyGeothermal energy Solar power Solar power Hydroelectric powerHydroelectric power

Why is green power attractive to Why is green power attractive to consumers?consumers?

Electricity generation is largest industrial Electricity generation is largest industrial polluter in US; currently produces:polluter in US; currently produces:

two-thirds of the annual U.S. emissions of two-thirds of the annual U.S. emissions of sulfur dioxide (main cause of acid rain)sulfur dioxide (main cause of acid rain)

30 percent of the nitrogen oxide emissions 30 percent of the nitrogen oxide emissions (stress forest ecosystems; combine with (stress forest ecosystems; combine with organic compounds in sunlight to form organic compounds in sunlight to form smog)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 What are the “dirtiest” energy sources?sources?

CoalCoal OilOil Nuclear powerNuclear power Natural GasNatural Gas

What are the green power options?What are the green power options?

1. Green Pricing1. Green Pricing Consumers do not have to change their Consumers do not have to change their

electricity providerelectricity provider Customers choose to pay a premium on Customers choose to pay a premium on

their electricity bill to cover the extra cost their electricity bill to cover the extra cost of purchasing clean, sustainable energy of purchasing clean, sustainable energy

As of March 2003, more than 300 As of March 2003, more than 300 electricity providers in 32 states have electricity providers in 32 states have implemented green pricing options or implemented green pricing options or announced plans to do soannounced plans to do so

Green Mountain Power’s Green Mountain Power’s CoolhomeCoolhome, , CoolbusinessCoolbusiness

2. Green Marketing2. Green Marketing Sale of green power in competitive Sale of green power in competitive

markets; consumers have option to choose markets; consumers have option to choose among suppliers and service offeringsamong suppliers and service offerings• like choosing long-distance telephone carrierslike choosing long-distance telephone carriers

As of October, 2003 green marketing was As of October, 2003 green marketing was available in nine statesavailable in nine states• all in the northeast except Texasall in the northeast except Texas• not in Vermontnot in Vermont

3. Green Tags3. Green Tags Tradable Renewable Certificates (TRCs) represent Tradable Renewable Certificates (TRCs) represent

the environmental (non-power) attributes or the environmental (non-power) attributes or benefits of renewable electricity generation benefits of renewable electricity generation

consumer pays for the benefit of adding clean, consumer pays for the benefit of adding clean, renewable energy generation to the regional or renewable energy generation to the regional or national electricity grid national electricity grid

provides same environmental benefit as provides same environmental benefit as purchasing green pricing or green marketing purchasing green pricing or green marketing productproduct

provide “green” option for people in states where provide “green” option for people in states where green pricing/marketing not availablegreen pricing/marketing not available

Consumer Protection Issues in Consumer Protection Issues in Green PowerGreen Power

When power flows from the When power flows from the generator to your house, electrons generator to your house, electrons get mixed together on the wiresget mixed together on the wires• You can't specify which electrons you You can't specify which electrons you

get get • you can't know for sure if they are being you can't know for sure if they are being

generated by "green" power sources generated by "green" power sources A number of mechanisms have been A number of mechanisms have been

established to avoid consumer established to avoid consumer deceptiondeception

1. Voluntary certification1. Voluntary certification

Green-eGreen-e Establishes consumer protection and environmental Establishes consumer protection and environmental

standards for electricity products, and verifies that these standards for electricity products, and verifies that these products meet the standards. products meet the standards.

Standards include:Standards include: 50% or more of the electricity supply comes from one or 50% or more of the electricity supply comes from one or

more of these eligible renewable resources: solar, wind, more of these eligible renewable resources: solar, wind, geothermal, biomass, and small or certified low-impact geothermal, biomass, and small or certified low-impact hydro facilitieshydro facilities

if a portion of the electricity is non-renewable, the air if a portion of the electricity is non-renewable, the air emissions are equal to or lower than those produced by emissions are equal to or lower than those produced by conventional electricityconventional electricity

there are no specific purchases of nuclear power, andthere are no specific purchases of nuclear power, and the product meets the Green-e the product meets the Green-e new renewablenew renewable requirement requirement

2. State standards2. State standards

In 2002 Illinois established a "green power In 2002 Illinois established a "green power standard" for green power claims. The standard standard" for green power claims. The standard establishes three tests:establishes three tests:

100% of the power must come from new clean 100% of the power must come from new clean power sources (i.e., coming online after January power sources (i.e., coming online after January 1, 2002)1, 2002)

at least 2/3 of the power must be produced by at least 2/3 of the power must be produced by wind or solar energy, with the remainder from wind or solar energy, with the remainder from other renewable energy sources such as landfill other renewable energy sources such as landfill gas, small hydro, and biopowergas, small hydro, and biopower

the power purchase must create clear air quality the power purchase must create clear air quality benefits for the Illinois airshedbenefits for the Illinois airshed

3. National Association of Attorneys 3. National Association of Attorneys General (NAAG)--Environmental General (NAAG)--Environmental

Marketing Guidelines for ElectricityMarketing Guidelines for Electricity Provisions include:Provisions include: term "green" and other similarly general term "green" and other similarly general

statements of environmental benefit should be statements of environmental benefit should be used with caution; every implied representation used with caution; every implied representation of environmental benefit must be substantiatedof environmental benefit must be substantiated

term "clean energy" means energy whose term "clean energy" means energy whose generation does not cause significant emissionsgeneration does not cause significant emissions

a "renewable" energy source is one which is a "renewable" energy source is one which is naturally replenishable and is replenished on naturally replenishable and is replenished on some reasonable time framesome reasonable time frame

Green Power in VermontGreen Power in Vermont

Apparently the only green power option Apparently the only green power option available in Vermont is Green Mountain available in Vermont is Green Mountain Power's Power's Cool Home Cool Home projectproject

Customers make a $6 monthly tax-Customers make a $6 monthly tax-deductible contribution to the non-profit deductible contribution to the non-profit group Clean Air-Cool Planetgroup Clean Air-Cool Planet

through the Vermont-based group through the Vermont-based group NativeEnergyNativeEnergy, new renewable energy , new renewable energy projects are developedprojects are developed• wind farmswind farms• farm methane systemsfarm methane systems