FTC Plans to Gets Tough on Greenwashing - Public Comment Sought
The Federal Trade Commission ("FTC") announced proposed revisions to its "Green Guides". It is accepting public comment on these proposed changes until December 10, 2010. The FTC is charged with responsibility for prevention of fraudulent, deceptive and unfair business practices.
Apparently the FTC found consumers were misled by greenwashing techniques on the part of marketers. Greenwashing (as stated in Wikipedia) is:
(a portmanteau of "green" and "whitewash") is a term describing the deceptive use of green PR or green marketing in order to promote a misleading perception that a company's policies or products (such as goods or services) are environmentally friendly. Greenwashing may be described as "spin".
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There are many reasons why this issue should concern community associations. Community associations have traditionally been a prime target for certain practices. Think about all the communities that paid large up front payments to what they later learned were unlicensed contractors. We hear about far too many cases of fraud, theft and embezzlement of community association funds these days. The Florida Attorney General investigated recovery firms claiming to correct problems associated with timeshare unit re-sales and found that certain companies charged 'exorbitant fees' even though they provided very little service.
Losses may result from working with well intentioned service providers as well.
Budget shortfalls drive association boards to consider alternatives for their communities. Some of these communities have saved tremendously, just by changing certain practices or updating and improving certain systems. I discuss some of these techniques in "Green" Practices to Ease Future Financial and Budgeting Concerns and HOAs Can Save With Florida-Friendly Landscaping. Now is the time to consider retrofits and 'retro-commissioning' building systems to increase energy efficiency and reducing water use and expense, but community leaders have to scrutinize representations very carefully.
Paying attention to energy efficiency is important for another reason - government regulation. New York City's new Energy Conservation Code requires existing residential buildings i.e. condominiums and cooperative buildings (larger than 50,000 square feet) to:
- Conduct a 'benchmark' analysis of energy and water usage by May, 2011;
- Renew the energy performance rating each year thereafter;
- Conduct energy audits every ten (10) years;
- Retro-commission which is loosely defined as improving operation and function of base building systems, adjusting building systems for increased efficiency and changing operational practices; and
- Upgrade lighting by 2025 and install electrical submeters in certain areas.
I saw an announcement indicating these efforts will save New York City residents approximately 750 million dollars a year. Efficiency regulations for new construction in certain areas in Miami-Dade County are already on the books - they govern construction of residential buildings as well as commercial buildings. Its just a matter of time before statewide regulations, codes and local ordinances require community associations to increase efficiency in connection with repair projects or possibly require improvements and retrofits for this purpose.
If your community is interested in pursuing options that will save the association money while reducing waste and water usage at the same time, I encourage you to work with lawyers and consultants familiar with the U.S. Green Building Counsel's Leadership in Energy and Environmental Design rating system, even if you're not interested in certification. Those professionals should be proficient in community association operations, laws, regulations and governing documents, financing as well as construction law to ensure the project goes smoothly.
I'll include more information about some of the legal issues community associations need to consider in connection with these types of projects in a later post. To review a copy of the proposed revisions to the Green Guides click HERE.
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Condominium Associations can reduce their energy consumption costs by installing renewable energy devices and are in a position to possibly create a new revenue stream. Condominium Associations are uniquely positioned to take advantage of these rebates, cost saving techniques and possible new revenue streams as a result of Section 718.113(8), Florida Statues, which provides:
Total improvements and modifications lowered operating costs by more than $400,000.00 annually. How many of us would reject a 400% return on an investment?