The Feds Step in

NAHB and the USGBC have been effective at keeping federal whole-building green regulation at bay, whether it was their aim or not. I suspect this was NAHB’s intention all along. For USGBC it’s just a natural consequence of its strident environmentalism. But when you stop to think about it, what has happened recently seems nothing short of diabolical.

Imagine if I told you this story: A deep-green environmental group, along with one of America’s largest antiregulatory, builder-advocate trade associations both create green standards. Each group cleverly works to get its regulations, which benefit their members, to leverage the force of law. Then, as if guided by an invisible hand, municipalities start adopting these standards, sometimes whole-hog, because they don’t have the expertise (or cash) to develop their own.

Then, the International Code Council partners with NAHB to insert aspects of NAHB’s green regulations into the nation’s building codes. As a result, the onerous feds keep quiet, convinced that the private sector is doing a great job. Meanwhile, the growth of another government program (Energy Star) continues. And even though it’s billed as voluntary, conforming to its performance standards is required of any serious building product manufacturer. The program self-propagates to become the most successful government environmental program in world history, as the manufacturers self-impose green regulations and pay for testing of their competitors’ products.

Sounds crazy, right? But that’s pretty much what happened. If only things worked this well in green product labeling, where marketers’ claims have been so egregious — and industries have been so averse to meaningful self-regulation — that the feds finally stepped in with adult supervision in the form of the Federal Trade Commission.

NOW, marketers have to qualify their claims on the product packaging and limit the claim(s) to specific benefit(s).

You can’t blame the feds here, when you find companies like S.C. Johnson making a big marketing push around Windex and Shout being “Greenlist” products (implying that Greenlist is a third party), until you realize that the certification was created by none other than S.C. Johnson. This effort may have temporarily won the company a few concerned moms, but it certainly gave them a costly class-action lawsuit which is pending. You may detect the same manipulation of consumers with such labeling claims as “powered by nature,” “inspired by nature” or “eco-friendly.” The labels are everywhere; Ecolabel Index claims there are almost 90 in North America alone.

But now, because of new FTC action, any manufacturer that makes an environmental claim faces tighter rules because the FTC revised its “Green Guides,” which were created 12 years ago. Now, marketers have to qualify their claims on the product packaging and limit the claim(s) to specific benefit(s).

The new FTC rules also demand that companies disclose if their green certifications are from true third parties, or created in-house. If a trade association certifies a product, and the company is a member of the trade association, that too must be disclosed to the consumer. Claims of “renewable” have to be specific about material sources. Also, now a new set of rules governs claims of “nontoxic” or “free of,” and a manufacturer cannot claim a process uses “renewable energy” if any part of the product was derived from fossil fuels. Wow, strict!

Are the new labeling laws welcomed? I’d rather they came from industry sources, if only because industry sources can react faster and better to the market, as we saw with SFI, FSC, CSA and American Tree Farm.

FTC’s reluctance to step in did not do the green building movement any favors. All it did was introduce doubt and cynicism among buyers. On the other hand, the inability of manufacturers to collaborate with an honest, long-term strategy has cost all of them more money and turned off some consumers who otherwise would have been their biggest advocates.

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