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What Do the New Green Guides Mean for Lab-Grown Diamonds?
Periodically, the Federal Trade Commission updates their guidelines on environmental claims. These guidelines, known as “Green Guides,” help steer companies toward making qualified, verifiable claims about the environmental benefits of their products. In a time of increased consumer awareness of sustainability and environmental issues, companies have a responsibility to be honest and transparent in their environmental claims. Following these guides can help businesses stay on the right side of the law and avoid overselling the environmental benefits of their products.
These guides are especially important for the lab-grown diamond industry. One of the greatest benefits of lab-grown diamonds, in the eyes of consumers, is that they are a sustainable, environmentally friendly alternative to mined diamonds. But this belief doesn’t necessarily hold true for every single lab-grown diamond as compared to every single mined diamond. There are growers with massive carbon footprints, and there are mines that do everything in their power to leave the land in the same state they found it. And even when your lab-grown diamonds are manufactured with sustainability in mind, it is important to avoid general “sustainable” claims and get into the specifics of what makes these particular LGD more sustainable or environmentally friendly than mined diamonds.
As the 2012 revision of the Green Guides does not contain specific language concerning sustainability claims, the FTC is currently in the process of updating them. Though not much will be changing from earlier versions, now is a good time to review the FTC’s suggestions and what they mean for LGD. We want to be able to tout the environmental benefits of our products, but we have to be sure we are doing so as ethically as possible, with full knowledge of the FTC’s guidelines.
Renewable Energy Claims
The 2012 version of the guides says that if a product was made using fossil fuels, marketers may still claim that the product was made with renewable energy if the manufacturer purchases renewable energy certificates (RECs) to match the energy used in production. Furthermore, according to Section 260.15 (d), if a company “buys wind energy for 50% of the energy it uses to make the clothing in its line,” that company’s marketing materials cannot make the unqualified claim “made with wind power.” That company would have to specify that “We purchase wind energy for half of our manufacturing facilities.”
Though the FTC is still reacting to public comment on the need to include “sustainability” language in the Green Guides, the way these guides have been interpreted includes “sustainable” in a class of terms alongside “eco-friendly” and “green.” Here’s what the FTC says about “eco-friendly” claims:
The brand name “Eco-friendly” likely conveys that the product has far-reaching environmental benefits and may convey that the product has no negative environmental impact. Because it is highly unlikely that the marketer can substantiate these claims, the use of such a brand name is deceptive. A claim, such as “Eco-friendly: made with recycled materials,” would not be deceptive if: (1) the statement “made with recycled materials” is clear and prominent; (2) the marketer can substantiate that the entire product or package, excluding minor, incidental components, is made from recycled material; (3) making the product with recycled materials makes the product more environmentally beneficial overall; and (4) the advertisement’s context does not imply other deceptive claims.
As it stands, you can replace “eco-friendly” with “sustainable” in the above quote. When making sustainability claims, your best bet is to say exactly what makes a particular product sustainable.
The Green Guides caution against making unsubstantiated, unverified, and vague claims about the environmental impacts of your products. One interesting comment from the guide suggests that marketers are responsible not only for their own use of language, but for the consumer’s interpretation of that language. Section 260.15 says, “Research suggests that reasonable consumers may interpret renewable energy claims differently than marketers may intend.” But if you follow the FTC’s guidance for substantiating your claims, you are better protected against unreasonable interpretations of your claims.
Whatever changes the FTC ultimately makes, it is important to remember that the Green Guides are just that—a guide to best practices. Their suggestions do not carry the force of law; however, following the guides’ recommendations is more likely to result in your business making marketing claims that are both legal and ethical. And while these guides are not legally binding regulations, they are used by courts litigating greenwashing lawsuits, as in a recently dismissed lawsuit against H&M. As sustainability becomes a major selling point for consumers, the lab-grown diamond sector should keep close tabs on the FTC’s revisions to the Green Guides and the courts’ interpretation of them.