U.S. Warns Companies Over Misleading Green Marketing

Korean companies looking to break into the American market must be cautious as U.S. competition authorities intensify crackdowns on false green marketing.

According to a report titled “Hidden Dangers in U.S. Green Marketing That Korean Companies Should Pay Attention To,” released by KOTRA on the 12th, green marketing refers to marketing strategies and activities emphasizing environmental protection, sustainability, and a sense of responsibility towards nature. This includes △developing environmentally friendly products, △sustainable packaging, △eco-friendly campaigns using social media, and △building an eco-friendly brand image.

However, companies often mislead consumers due to various factors, such as an inadequate understanding of the supply chain, a lack of thorough preparation, and a lack of awareness of green marketing regulations. “Greenwashing” involves falsely or without sufficient evidence claiming a product is eco-friendly to attract consumer attention despite not being environmentally friendly, and it is identified as a risk factor in green marketing.

The Federal Trade Commission (FTC) issues a Green Guide to provide guidelines to prevent environmentally deceptive marketing practices that mislead or confuse consumers. It was first published in 1992 and last updated in 2012. It is expected to be revised again this year, with content on environmental benefits, recycling, carbon offsetting, and certification.

Companies that intend to engage in eco-friendly marketing in the U.S. should review the FTC’s Green Guide. Unproven green marketing can lead to fines on charges of greenwashing.

In an actual case, major American retail giants Kohl’s and Walmart falsely marketed 24 products made from rayon derived from bamboo as eco-friendly and were indicted by the FTC.

Both companies marketed that rayon fabric made from bamboo was produced using environmentally friendly processes without harmful chemicals and clean, non-toxic materials, offering environmental benefits. However, environmental groups sued both companies, claiming that toxic chemicals are needed to convert bamboo into rayon, releasing dangerous pollutants.

The FTC asked the court to order Kohl’s and Walmart to stop using deceptive eco-friendly claims or other misleading advertisements and to impose the largest fines in the sector, $2.5 million and $3 million, respectively. The FTC filed the order for penalties with the complaints to the U.S. Department of Justice, and the case is currently pending in court.

In response, KOTRA said, “As interest in sustainability grows in the U.S., government efforts to discourage indiscriminate use are also expected to change frequently. Korean companies considering entering the U.S. market must also prepare for these changes.”