Green Marketing

What is it?

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

Examples of green advertising claims?

biodegradablecompostablerecyclable/recycledenvironmentally safeozone friendly

Why do companies use it?

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

wordssymbolsemblemslogosdepictionsproduct 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 misleadingsubstantiated 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 deceptionA claim of recyclability is not deceptive if only minor, incidental components are non-recyclable

Claims of recyclability have unique potential for deception becausenot all communities have recycling facilitiesnot 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 communitieseven if collection sites are established in a significant percentage of communities or available to a significant percentage of the populationunless 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 earthozone 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/marketingWhat 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 BioenergyGeothermal energySolar 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?

CoalOilNuclear powerNatural Gas

What are the green power options?

1. Green Pricing

Consumers do not have to change their electricity providerCustomers 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 soGreen 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 productprovide 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 facilitiesif a portion of the electricity is non-renewable, the air emissions are equal to or lower than those produced by conventional electricitythere are no specific purchases of nuclear power, andthe 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 biopowerthe 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 substantiatedterm "clean energy" means energy whose generation does not cause significant emissionsa "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 projectCustomers make a $6 monthly tax-deductible contribution to the non-profit group Clean Air-Cool Planetthrough the Vermont-based group NativeEnergy, new renewable energy projects are developed

wind farms

farm methane systems