The European Union is taking action against misleading eco-labels and green claims. This is a great opportunity for companies with a strong sustainability strategy to market their story. But how do you communicate your ESG initiatives effectively, and how do you substantiate them?
Greenwashing could originally be taken literally. US researcher Jay Westerveld coined the term to denounce the fact that hotel chains were asking their customers to have fewer towels washed, ostensibly to save the environment, but mainly to save costs. The hotels themselves made little or no effort to reduce their impact. Today, we use the term for misleading business and marketing practices where companies pretend to be greener or more socially responsible than they really are.
Greenwashing is not always done consciously or with bad intentions. But what is sustainable and what is not? That is a complex question. Popular terms like ‘carbon neutral’, ‘biodegradable’ and ‘natural’ can be interpreted in many ways. When you improve a product’s impact on one aspect, you might worsen it on another. Think, for example, of cotton bags replacing plastic shopping bags: better in terms of plastic pollution, but worse in terms of energy and water consumption. So which option can you call sustainable? How sustainable is a product if you consider its whole life cycle? And which labels and certificates are reliable?
With the Green Claims Directive and the Greenwashing Directive, together the Green Directives, the European Union wants to put an end to vague and opaque sustainability claims. Claims and labels concerning sustainability will have to comply with concrete rules in the future.
First, we need to describe the current state of affairs. The Greenwashing Directive has already been adopted by the EU, but member states still have until 27 March 2026 to transpose it into national legislation. The Green Claims Directive is expected to be adopted in spring 2025, with a two-year transition period.
Meanwhile, national laws are already in place on certain forms of greenwashing in European member states. In Belgium, the FPS Economy enforces legislation on unfair commercial practices and misleading advertising. If greenwashing takes the form of false or misleading claims, the FPS can impose a fine of up to €80,000. There is also the Jury on Ethical Practices (JEP), the self-regulatory body of the advertising sector in Belgium. If an advertisement goes against the rules of advertising ethics, the JEP will admonish the advertiser to modify or discontinue the ad. If this does not happen, the JEP may recommend a suspension to all media outlets that support the Jury.
The Green Directives go beyond national legislation. The Greenwashing Directive officially recognizes greenwashing as a misleading practice, which strengthens and updates existing laws on consumer protection. The Green Claims Directive introduces a total ban on generic, unsubstantiated sustainability claims such as ‘environmentally friendly’. In practice, the directives complement each other and there is a lot of overlap between the two.
The Green Directives use a broad definition for sustainability claims: it covers all non-mandatory statements, information, symbols, logos, images, labels and brand names on packaging, on labels, in advertising, in all media and made by any organization. You can therefore assume that the directive covers any claim about the social or environmental impact of a product, service or company throughout the value chain.
A company should be able to back up sustainability claims with precise definitions and scientific data. That information must be publicly accessible – for instance via a QR code on the packaging – and updated every five years. Special attention is paid to explicit environmental claims, on C emisionsand offsetting, for example: they must be verified in advance by an independentbody appointed by the member state itself. Labels and certificates will only beallowed after an official body has verified them.
Those caught making misleading sustainability claims face severe consequences: fines can amount to 4 percent of annual turnover. Seizures and temporary exclusion from public tenders are also among the penalties.
And then there is also the threat of reputation damage. A survey by Testaankoop of more than a thousand Belgians showed that 34 per cent of respondents would no longer buy from a company committing greenwashing, and 17 per cent would advise friends and family against purchasing the product.
Do you want to get started without greenwashing? We perform a greenwashing scan, help you set up a sustainable storyline, and create a range of communication assets, tailored to the needs of your organization. Contact us at mail@pantarein.be.
