ADVANCEMENT OF GREEN CLAIMS DIRECTIVE IN EUROPE

Via the Green Claims Directive, new criteria is being developed to prevent companies from making misleading claims about the environmental merits of their products and services within the European Union (EU). The Directive is considered necessary to address difficulties that consumers face in trying to ‘make sense’ of label statements. These cover environmental performance of products and the credentials of the companies promoting them. According to the Commission, claiming to be ‘green and sustainable’ has become a competitive factor in the bid for customers.

An environmental claim usually portrays a product or service as environmentally superior or beneficial to the environment. Claims may be supported by the colours and imagery used, as well as the words themselves. Companies may develop their own symbols to portray their messages, rather than obtaining third-party verification.

Consumer trust in environmental claims is now extremely low

The practice of presenting a false image of the environmental impacts or benefits of products and services is known as ‘greenwashing’. This term also applies to the credentials of the companies that make them.

The European Commission has produced some interesting statistics to demonstrate uncertainty and unreliability in some of the claims made. These claims go alongside the number of ‘sustainability’ labels that can be obtained:

•     53% of green claims are vague, misleading or provide unfounded information

•     40% of claims have no supporting evidence

•     50% of all green labels offer weak or non-existent verification

•     There are 230 sustainability labels and 100 green energy labels in the EU

There are extensive labels associated with endorsement of products and services for environmental criteria. This makes it difficult for consumers, businesses, investors and stakeholders to establish if the claims are dependable and trustworthy. According to the Commission, consumer trust in environmental claims is now extremely low.

The Commission and consumer organisations have undertaken a number of studies to examine the use and validity of ‘green claims.’ A ‘sweep’ was undertaken by the Consumer Protection Cooperation Authorities in 2020, assessing 344 claims. The authorities had difficulty identifying whether the green claim covered the whole product or just one of its components (50%). In many cases, the authorities could not find out whether the green claim referred to the company or only certain products (36%). Furthermore, it was confusing as to which stage of the life cycle the claim covered (75%).

Claiming to be ‘green and sustainable’ has become a competitive factor

The aim of the new Green Claims Directive is to ensure that environmental labels and claims are credible and trustworthy. The regulators are discussing the possibility of third-party verification of environmental claims, before a product or service can be promoted with a particular ‘green’ claim.

The aim of the new Green Claims Directive is to ensure that environmental labels and claims are credible and trustworthy

The Green Claims Directive is closely linked to the Ecodesign for Sustainable Products Regulation (ESPR), which came into force on 18 July, 2024. The ESPR establishes a framework for setting ecodesign requirements on specific product groups. The aim is to improve circularity, energy performance and other environmental sustainability aspects of products within the groups.

Almost all categories of physical goods placed on the EU market will be subject to performance and information requirements, which includes the following:

•     Product durability, reusability, upgradability and repairability

•     Presence of substances that impact circularity

•     Energy and resource efficiency

•     Recycled content

•     Re-manufacturing and recycling

•     Carbon and environmental footprints

•     Digital product passports

The Commission will prioritise products subject to the regulation, as well as requirements specific to the product types via the adoption of Working Plans. These are expected to cover a three-year period. 

Rules will also be put in place to address the destruction of unsold consumer products, such as textiles and footwear. Some companies will be required to disclose information on the number and weight of unsold consumer products discarded each year. 

Companies who do not comply with these directives may be excluded from procurements, and lose revenue. They could also face a fine of at least 4% of their annual turnover, according to the report from the European Parliament. 

• www.environment.ec.europa.eu/publications/proposal-directive-green-claims
• Greenwashing: How EU firms can validate their green claims (News, European Parliament, www.europa.eu)
• Text adopted from Substantiation and communication of explicit environmental claims (Green Claim Directive), 12 March, 2024 (www.europa.com)
• Ecodesign for Sustainable Products Regulation – European Commission (www.europa.eu)