Green Claims Directive as a step towards proven green choices and fight against greenwashing

Green Claims Directive

In March of this year, the European Commission took steps to make green product advertising more transparent, proposing the Green Claims Directive. The initiative aims to combat greenwashing , or “greenwashing,” and ensure that products marketed as organic actually are so. Last week, the European Commission and the European Parliament reached a preliminary agreement on the directive.

What are “environmental statements”?

In the project Green Claims Directive The term “environmental claims” refers to text, graphics and symbols that state or make it clear that a product or trader has a positive environmental impact, has no environmental impact, is less harmful to the environment than other products or traders, respectively, or has improved over time.

The directive is to apply only to voluntary declarations and is aimed at companies operating in the EU with more than 10 employees and an annual turnover of more than €2 million. Moreover, the provisions provide for extraterritorial effects, as they will also apply to non-EU companies that target EU consumers.

The need for a Green Claims Directive

Being an informed consumer is not easy. 2020 Commission Study. revealed that more than half of the EU’s environmental claims were misleading or unsubstantiated, and 40% of them were unproven. The lack of harmonized rules leads to a growing problem of “green lying,” creating inequality in the single market. That’s why the Green Claims Directive is essential to protect consumers and support truly sustainable businesses.

As the EC points out: “You can find green slogans everywhere – ocean-friendly T-shirts, carbon-neutral bananas, bee-friendly juices, supplies with 100%CO2 compensation, and so on. Unfortunately, too often these claims are made without any evidence or justification.”

The main objectives and scope of the Green Claims Directive

The Green Claims Directive aims to establish minimum standards for companies promoting their products as green. This includes overt claims and labels, with the exception of those already regulated by EU law (e.g., the energy efficiency label or the organic farming label).

The goals of the Green Claims Directive include:

  • make green claims credible, comparable and verifiable across the EU;
  • Protect consumers from greenwashing;
  • Contribute to the EU’s green, closed-loop economy by enabling consumers to make informed purchasing decisions;
  • Help establish a level playing field when it comes to the environmental performance of products.

On the trail of unfair practices

The directive is intended to combat various forms of “green lies,” from vague claims to false certifications to a lack of evidence of a product’s actual environmental performance. The introduction of the directive is intended to provide a concrete and uniform definition and scope of greenwashing.

The directive outlines specific examples of unfair practices to be addressed. These include:

  • Making vague or poorly substantiated environmental claims;
  • displaying a sustainability label that is not based on a certification system or established by public authorities;
  • making a general environmental claim for which the entrepreneur is unable to demonstrate recognized excellent environmental performance corresponding to the claim;
  • making environmental claims related to future environmental performance, without, among other things. clear, objective and verifiable commitments and targets, as well as an independent monitoring system.

Uniform rules and etiquette

Before a company uses a “green” claim, it will be mandatory to independently verify it and provide supporting scientific evidence. As part of this analysis, companies will need to determine the environmental impact that is actually relevant to the product and any possible dependencies in order to present a complete and accurate picture.

The Green Claims Directive also provides for tighter regulation of green labeling. Of the more than 230 existing labels, uniform and reliable standards are needed. This will enable consumers to make informed choices. The EC stresses that we should continue to use common, trusted labels, such as the “EU Ecolabel,” which certifies environmental excellence in the European market.

In order to control the proliferation of different types of labeling, it will not be possible to introduce new public labeling systems unless they are developed at the Union level. In turn, before introducing a new private system, it will be necessary to prove that it is more environmentally advanced than existing systems and obtain the appropriate authorization.

Background and work schedule

The Green Claims Directive is part of a broader European approach to sustainability, stemming from the European Green Deal. It is part of the third package of measures, where the first two, on the circular economy, were adopted in March and November 2022. The document is a response to growing consumer demand for transparency and environmental responsibility on the part of companies.

The directive is currently going through the legislative process and is expected to enter into force in 2024, with a start-up period of 2024-2027, followed by a full-scale launch.

Enforcement, penalties and exceptions

Once the Green Claims Directive is in place, member states will be responsible for enforcing the new regulations and imposing penalties for non-compliance. This is a key element in making the new regulations effective across the EU. Penalties will include fines, confiscation of income earned by the company, and even temporary exclusion for up to 12 months from public procurement procedures and access to public financing.

In addition, the draft provides for the possibility of lawsuits by organizations representing consumers against companies that violate the directive’s provisions, thus protecting the collective interests of consumers.

Although the Green Claims Directive will be broad in scope, there are some exceptions, especially in the financial services sector and for companies that comply with European sustainability reporting standards. The rules will not apply to programs already regulated, such as the EU eco-label, the energy efficiency label and the organic farming label.

Prevent misleading claims and promote sustainable development

The Green Claims Directive is an important step toward increasing the transparency and credibility of environmental claims in the EU. By setting clear rules and standards, the directive will ensure the protection of consumers and the promotion of truly green businesses. The introduction of the directive is an important part of the European drive toward sustainability and is expected to bring positive changes to the European market.

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