FTC Green Guides — And the California Law That Actually Binds

The United States has no federal green claims rule. What it has is a set of guides the Federal Trade Commission first issued in 1992 and last revised in 2012, which explain how the Commission reads the prohibition on deceptive practices in Section 5 of the FTC Act. They are guidance. They impose nothing, they carry no penalties, and their operative verb throughout is should.

A revision has been open since December 2022, when the Commission asked for public comment with carbon offsets and climate claims expressly among its questions. As of August 2026 it has not landed. The text governing environmental marketing in the largest consumer market on earth is fourteen years old.

Meanwhile the instrument that actually binds a carbon-neutral claim in America is a California statute. AB 1305 has required public disclosure since 1 January 2025 and carries penalties of $2,500 a day up to $500,000 per violation. And behind both sits a third layer with no regulator in it at all — private class actions, which need no agency to act first.

1. Are the Green Guides law?

No. The Green Guides are administrative guidance. They interpret Section 5 of the FTC Act, which prohibits unfair or deceptive acts or practices, and they tell you how the Commission is likely to apply that prohibition to an environmental claim. You cannot be fined for breaching the Guides, because there is nothing in them to breach.

What you can be liable for is deception under Section 5. The Guides matter because they are the most detailed published account of what the Commission considers deceptive — but the cause of action is the Act, and the Guides are evidence of how it will be read.

2. Where the revision got to

The Guides have been revised three times since 1992 — in 1998, 2008 and 2012. In December 2022 the Commission published a Request for Public Comment opening a fourth review, and expressly invited comment on carbon offsets, climate change claims and compostability, among other topics.

That review has not produced revised Guides. The 2012 text remains operative, and every rule on this page is quoted from it.

3. The three layers of US green-claims risk

Asking “is this claim legal in the US?” produces a misleading answer, because the question conflates three separate layers with different force. Only two of them bind.

On the EU and UK pages the operative question is always which regulator reaches me. In the United States the honest answer is often none — and you will still be sued.

4. What the Guides cover, section by section

Part 260 runs to fifteen sections. Two set general rules and thirteen address specific claim types. The list is worth reading in full, because the Guides are far more granular than their reputation suggests — and because a claim type that appears here has a published federal position, while one that does not is judged on deception principles alone.

5. General environmental benefit claims (§ 260.4)

This is the American counterpart to the EU’s ban on generic claims, and the difference in force is visible in the verbs. The Guides state:

The reasoning is identical to Europe’s — that “green” or “eco-friendly” conveys far-reaching benefits nobody can prove — and the consequence is entirely different. In the EU the practice is unfair in all circumstances. Here the Commission says you should not, and if you do, the question becomes whether the particular claim deceived consumers under Section 5.

The Guides then set out how to rescue such a claim, and the mechanism will be familiar from the UK and EU pages: qualify it. Marketers “should use clear and prominent qualifying language that limits the claim to a specific benefit or benefits”, should not imply a negligible benefit is significant, and — the part most often missed — where a qualified claim still implies the product is better overall, must analyse the trade-offs to substantiate that.

6. Carbon offsets (§ 260.5), in full

The section is short enough to read whole, and it is more specific than most readers expect from a document usually described as vague.

Three things stand out. The double-selling prohibition in (a) is an accounting requirement written into consumer-protection guidance. The two-year disclosure rule in (b) is a bright line that has no equivalent in either European regime. And (c) is additionality stated in plain language: a reduction the law already required is not something you can sell.

7. The same flight, three jurisdictions

Both the EU and the US chose a flight to illustrate their offset rules, which makes the comparison unusually clean. Take one fact pattern — an airline or travel agency telling a customer that a specific flight is carbon neutral because the fare funds a climate project — and the three regimes on these pages give three different answers.

The American answer is the most interesting of the three, because it turns on a detail neither European regime addresses at all. The Guides do not object to the claim; they object to the timing. Say the same thing while disclosing that the reductions begin in two years, and the Commission’s own example says it is no longer deceptive.

8. Certifications and seals (§ 260.6)

The Guides take a harder line on third-party certification than most marketers assume, and it is the closest the US comes to the EU’s prohibition on unaccredited sustainability labels.

Two consequences follow. First, a seal is not a shield: if the badge on your pack communicates something to a consumer, you must be able to substantiate that something, whoever issued the badge. Second, § 260.6(d) treats a certification that does not convey the basis for the award as likely conveying a general environmental benefit — which lands it straight back in § 260.4, where unqualified claims should not be made at all.

The practical instruction the Guides draw from that is blunt: marketers “should not use environmental certifications or seals that do not convey the basis for the certification”. A logo that says only that a product is good for the planet is worse than useless, because it inherits a standard nobody can meet.

9. California AB 1305 — the part that binds

The Voluntary Carbon Market Disclosures Act was signed in October 2023, took effect on 1 January 2024, and has required compliance since 1 January 2025. Unlike everything above it, AB 1305 is a statute with penalties attached, and it reaches the exact claims this section of our corpus is about.

10. What AB 1305 requires you to publish

The disclosures fall into two groups, depending on whether you are on the selling side or the claiming side. A business that both buys offsets and makes a neutrality claim is in both.

• If you market or sell offsets in California — details of the project: its location, type, protocol, timeline, the accountability mechanism if the reductions do not materialise, and whether emissions reductions or removals are durable.
• If you buy or use offsets in California — the name of the seller and the offset registry or programme, the project identification, the offset project type and its site location, and the protocol used to estimate emissions reductions.
• If you make a net-zero, carbon-neutral or significant-reduction claim — how the claim was determined and whether it was independently verified, plus the interim progress toward it.
• On your own public website — not in a report, not on request. The statute specifies the medium.
• Updated at least annually. A disclosure that was accurate when posted and has not been refreshed is a live exposure, because the penalty runs per day.

Read alongside the Green Guides, the effect is that the US requires more published detail about the offsets behind a neutrality claim than either Europe or Britain — while being the only one of the three that does not restrict the claim itself.

11. California SB 253 and SB 261 alongside it

AB 1305 is not California’s only climate disclosure statute, and the three are frequently confused. They do different jobs: AB 1305 governs what you say about offsets and neutrality; SB 253 and SB 261 govern what you report about emissions and climate risk.

A company can be inside AB 1305 and outside the other two: the neutrality statute has no revenue threshold. Making the claim is the trigger.

12. Private litigation: the layer with no regulator

The distinctive feature of US green-claims risk is that the most likely challenger is not an agency. Environmental marketing claims are litigated as consumer class actions under state consumer protection statutes, and that channel operates whatever the FTC does or does not do.

This changes what compliance is for. In the EU the question is whether a wording is on a blacklist. In the UK it is whether a regulator would find your evidence adequate. In the US it is whether a claim can be shown to have misled a reasonable consumer, in front of a court, at the instance of a plaintiff who needs nobody’s permission to start.

13. State attorneys general and the little FTC acts

Every state has its own consumer protection statute prohibiting deceptive practices — the “little FTC acts” — and state attorneys general enforce them independently of the Commission. For green claims this matters in two ways.

• Many states read the Green Guides into their own law, formally or in practice, which means a federal document with no penalties acquires state-level teeth by reference.
• A state AG does not need the FTC to act first, and several have pursued environmental marketing cases on their own initiative. The absence of federal enforcement in a given year says nothing about state exposure.

Combined with AB 1305 and the private class-action channel, the picture is that the United States has no single green-claims regulator and a great many enforcers.

14. Penalties and exposure

The headline federal number is the least useful figure on this page. The exposures that reliably materialise are the per-day California penalty and the cost of defending a class action.

15. EU, UK and US compared

The same comparison appears on our EU and UK green-claims pages with their own column highlighted, so all three stay row-for-row consistent rather than drifting into three different tables.

The highlighted column is the jurisdiction this page documents. This table completes the set.

16. How this interacts with the standards you follow

Because the US test is deception rather than definition, a standard is worth here what it is worth as evidence — and, under AB 1305, as something you can publish.

17. How GreenCalculus implements this

• Carbon Neutral Claim Checker — tests the offset questions § 260.5 and AB 1305 both turn on: what is being offset, by what, retired where, and disclosed how.
• Renewable Electricity Claim Checker — the § 260.15 failure, where the certificates conveying the attribute have been sold to someone else.
• Greenwashing Risk Register — surveys the claims in use and routes each to the instrument that governs it.

The factors behind any figure you publish carry their edition, publication and retrieval provenance in the MasterBrain. Under AB 1305 the disclosure must state how a claim was determined and be refreshed annually, and in a deception case the question is what you held when you spoke — both of which are provenance questions before they are calculation questions.

18. Frequently Asked Questions

Related References

• EU Green Claims Directive — where the same wordings are unfair in all circumstances
• CMA Green Claims Code — the UK’s evidence-based test
• California SB 253 & SB 261 — the reporting statutes alongside AB 1305
• ISO 14068-1 — how a neutrality claim is computed
• Green-e and the US residual mix — relevant to § 260.15
• Greenwashing and carbon offset — definitions
• Carbon Neutral Claim Checker — test a claim against these rules