A few weeks ago, the European Commission published its long-awaited proposal for the Green Claims Directive. That directive should put an end to misleading environmental claims and labels used by companies marketing products to consumers in the EU. We summarize for you what this new directive means for your business and how you can prepare for it.
75 per cent of European consumer product companies use sustainability claims. They do this to convince consumers of a product's environmental performance. Such claims are contained in advertising, websites and brochures, as labels on packaging or, more subtly, in product names and green logos. Increasingly, however, companies are guilty of greenwashing. For instance, studies show that more than 50 per cent of environmental claims are vague and misleading; 40 per cent 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 them are either not checked or only checked to a very limited extent.
It is therefore not surprising 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 recognises the need for transparent use of environmental claims that are reliable, comparable and verifiable. In this way, Europe creates 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 performance and that communicate them in a substantiated way have a competitive advantage.
With the Green Claims Directive, environmental claims made by companies must from now on ...
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 kept 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 substantiate 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. That aims to ensure 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 Ecodesign 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 include a clear ban on claims regarding carbon neutrality and also lacks specificity when it comes to harmful chemicals, as the European Environmental Bureau (EEB), among others, underlined. Furthermore, Europe does not introduce a general 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 will also be up to the member states themselves 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.
More and more, greenwashing is 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 and also your sustainability communication (e.g. information on the website) and to call in a professional to help you.
Pantarein has years of experience in developing sound and substantiated sustainability communications. We screen your current communication and help you with 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 words and images.
Contact us at email@example.com for more information.