The Color of Money

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After the formation of the task force, the FTC created the Green Guidelines for environmental marketing. The guidelines are to date the only federal regulation of environmental marketing claims. The guidelines generally address the use of the terms recyclable, degradable, compostable, recycled content, source reduction, refillable and o zone-safe. But the Green Guidelines are not rules-they are, well, guides. They do not codify definitions or set standards for the use of environmental terms; they offer broad parameters and examples of what the FTC might consider a deceptive claim. Fundamentally, they are recommendations, and are enforceable on a case-by-case basis when complaints are raised against individual companies. The FTC is in the process of reviewing these guidelines and any revisions will be made early this year.

Shortly after the creation of the FTC guidelines, the state of California passed a truth-in-advertising law that became the country's only real environmental marketing law. The law, which was repealed in October 1995, set very specific minimum standards for claims. For example, under the California law the term recycled could only be used if the product consisted of at least 10 percent post-consumer material. The term recyclable could only be used if one recycling facility capable of recycling those products existed per 300,000 people. Ten industry and trade associations-the likes of the Association of National Advertisers (ANA) and the Society of the Plastics Industry-filed suit to overturn the California law. The California Supreme Court upheld the law, except that the suit succeeded in striking the definition of recyclable from the law. Removing it was a significant blow to the character of the law. Richard Denison, senior scientist from the Environmental Defense Fund says: "Frankly, I think that entire recyclable claim is deceptive. Any product is recyclable if you put enough money into it, but can it be recycled in that community? You can't tell by the label." Industry continued to challenge the law on the basis that it infringed on the constitutional right to free speech.

"California is trying to take control of the dictionary," ANA Executive Vice President Daniel Jaffe explained to the press. The ANA brought the suit against the California law all the way to the United States Supreme Court in October 1995, where once again it was upheld.

"Commercial speech has a very different standard of protection than noncommercial speech," says the EDF's Denison. "The First Amendment does not allow you to lie for profit."

Lance King says: "It was a significant victory that the U.S. Supreme Court turned down the petition [to overturn the law]. It makes new law, in that it establishes a state's constitutional right to restrict these types of claims."

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