FTC Review of Green Guides and Recyclable/Compostable Claims Presents Industry Opportunity

Greenwashing is on the table in 2023, and the waste and recycling industry has a unique opportunity to influence policy relating to claims relating to recyclability and compostability.  In the new year, the United States Federal Trade Commission (“FTC”) will be reviewing its “Green Guides,” which provide guidance to companies on what constitutes misleading and deceptive environmental claims about their products and service, according to an agency press release. 

In light of ever-heightening consumer demand, companies often market products and services as having an environmental benefit, such as being compostable, recyclable, or made with renewable energy or materials.  However, consumers and other watchdogs are also increasing scrutiny of environmental benefits.  Environmental marketing claims are tested against both state and federal law, but the touchstone in this area is the Federal Trade Commission Act and the “Green Guides.”  The Green Guides contain standards and examples to help companies understand what constitutes deceptive or misleading environmental advertising, which can lead to substantial liability and reputational damage.  As a result, it is essential for companies making environmental claims to consult with experience professionals and review applicable laws and guidance, including the Green Guides.

The FTC last updated the Green Guides in 2012, but recently issued a notice initiating its review of the guides and requesting comment from the public and businesses. 

The waste and recycling industry will be particularly interested in some of the questions posed by the FTC in initiating its review, which implicate claims involving “compostable,” “degradable,” “recyclable,” “recycled content,” and more.  At this moment, the industry has a unique opportunity to shape policy by providing input on these questions. 

For instance, there has been substantial litigation involving whether certain items marketed as recyclable are in fact recovered and recycled, leading to some uncertainty regarding the justification that is required when claiming that a product is recyclable.  The FTC notice presents an opportunity for packaging companies and the waste and recycling industry to address this issue directly, for the benefit of the entire waste management system.  There also has been some discussion within legal circles of what it means for a product to be compostable, and, again, what proof is required to demonstrate compostability.  

As the industry is well aware, there have been substantial advancements in the waste and recycling industry over the last decade, especially with respect to the benefits and risks of sustainable packaging alternatives.  However, the industry must come forward to provide input on the Green Guides to ensure that the revisions support and incorporate the current concerns and issues.  Among other things, the industry should consider how developing legal requirements, including Extended Producer Responsibility and recycled content requirements intersect with the Green Guides, and how the Guides can be used to further industry goals.

Anyone seeking to provide comment will have 60 days from the publication of the FTC notice in the federal register. 

Matthew Karmel is the Chair of the Environmental and Sustainability Law Group at Offit Kurman, a full-service AMLaw 200 law firm.  Matthew’s practice focuses, among other things on the waste and recycling industry, and he was recognized on the 2022 Waste360 40 under 40 list for his work with the industry.  Matthew also is the founder of the planetary lawyer project, which provides guidance to lawyers seeking to work on climate issues.