In March, the European Commission published its long-awaited proposal for the Green Claims Directive. This directive should put an end to misleading environmental claims and labels used by companies to market products to consumers in the EU. Here, we summarize what this new directive means for your business and how you can prepare for it.
75 percent of European consumer product companies use sustainability claims. They do this to convince consumers of a product’s environmental performance. Such claims are found in advertising, websites and brochures, as labels on packaging or, more subtly, in product names and green logos. Increasingly, however, companies are becoming complicit in greenwashing. For example, studies show that more than 50 percent of environmental claims are vague and misleading, while 40 percent of claims are not supported by evidence. Moreover, there is a proliferation of eco-labels: a total of 230 such labels are currently in use in Europe. Half of these are either not regulated, or only regulated to a very limited extent.
It is therefore of little surprise that almost two-thirds of European consumers say they find it difficult to assess whether a product is sustainable or environmentally friendly. To protect consumers and accelerate the green transition, it is therefore imperative that green claims meet strict conditions.
With the Green Claims Directive, the European Commission recognizes the need for transparent use of environmental claims that are reliable, comparable and verifiable. Through this, Europe will create a level playing field for all companies using green claims. Not only will it put a stop to companies that – knowingly or unknowingly – engage in greenwashing, it will also ensure that companies that market products with good environmental properties and communicate about them in a substantiated way have a competitive advantage.
In accordance with the Green Claims Directive, companies’ environmental claims will from now on have to be…
The new directive also aims to curb the proliferation of eco-labels. Companies will only be allowed to use labels approved by the European Commission. These will be tracked in a separate register. Eco-labels based on ‘self-certification’ or created by a company or sector will be completely banned.
The Green Claims Directive fulfils one of the action points of the Circular Economy Action Plan (part of the Green Deal), namely: requiring companies to back up their environmental claims with robust, scientifically proven and verifiable methods. The new directive is also complementary to the draft directive Empowering Consumers for the Green Transition, which aims to ensure that consumers get the right information about a product’s lifespan and repairability before buying it.
The directive is also linked to other European regulations, such as the Consumer Rights Directive, legislation that protects consumer rights, and the Eco-design Directive, which aims to reduce the footprint of European products and services. Finally, Europe is also updating the 2005 Unfair Commercial Practices Directive.
Yes and no. The Green Claims Directive represents a major step in the fight against greenwashing, and is needed to restore consumer confidence in green products. It enables consumers to make purchasing decisions based on reliable claims and labels, thus contributing to the climate transition. It also protects companies that market genuinely sustainable products from unfair competition.
Shortcomings are that the directive does not clearly prohibit claims about carbon neutrality and is also not very specific when it comes to harmful chemicals, as the European Environmental Bureau (EEB), among others, have highlighted. Furthermore, Europe is yet to introduce a uniform method for calculating the environmental impact of a green claim; companies are thus free to choose which method they apply. Critics also suggest that companies will invest more time and money in studies supporting their claims than in actual sustainable actions. Finally, member states will have to monitor the correct use of environmental claims themselves. So there will be no overarching European body responsible for enforcement and sanctions. It is also up to the member states to introduce fines for non-compliance.
Public consultation on the draft directive continues until 7 June. The European Parliament and the European Council must then approve the proposal. After the directive is adopted – expected to happen as late as 2023 – it will be up to the Member States. They must transpose the directive into national legislation, and appoint the appropriate authorities for enforcement and sanctions.
Greenwashing is increasingly a real risk, especially for companies marketing consumer products. As part of good governance, and driven by the Corporate Sustainability Reporting Directive (CSRD), companies must act ethically and be transparent. Being accountable for your communications is part of that. You would do well to thoroughly review the labels you use, as well as your sustainability communication (e.g. information on your website) and engage professional help in doing so.
Pantarein has years of experience in developing sound and substantiated sustainability communications. We screen your current communication, and help you formulate a strategic plan to protect yourself against greenwashing. Our copywriters and art directors translate your technical roadmap and facts & figures into a substantiated and catchy sustainability narrative in all its forms.
Contact us at mail@pantarein.be for more information.
_klein.jpg)
