What you need to know about The Green Claims Directive

A study conducted by the European Commission in 2020 concluded that “consumers are faced with the practice of making unclear or not well-substantiated environmental claims”, also known as ‘greenwashing’. The study found 53.3% of the examined environmental claims in the EU to be vague, misleading or unfounded, and 40% were unsubstantiated. It also concluded that the absence of common rules for companies making voluntary green claims leads to ‘greenwashing’. It creates an uneven playing field in the EU’s market, therefore putting genuinely sustainable companies at a disadvantage.

An environmental claim is defined as ‘any message or representation, which is not mandatory under Union law or national law, including text, pictorial, graphic or symbolic representation, in any form, including labels, brand names, company names or product names, in the context of a commercial communication, which states or implies that a product or trader has a positive or no impact on the environment or is less damaging to the environment than other products or traders, respectively, or has improved their impact over time’. [Article 1 of the Proposal for a Directive on Empowering Consumers for the Green Transition]

The European Green Deal set out a commitment to tackle ‘greenwashing’ by ensuring that buyers receive reliable, comparable and verifiable information to enable them to make more sustainable decisions. The New Consumer Agenda and the Circular Economy Action Plan have also set the need to address ‘greenwashing’ as a priority.

The Proposal for a Directive on Empowering Consumers for the Green Transition, which proposed amendments to the Unfair Commercial Practices Directive and the Consumer Rights Directive, was adopted by the European Parliament in March 2022. The proposal introduced generic rules for the prohibition of misleading advertising.

Green Claims Directive

The Proposal on substantiating and communicating environmental claims (Green Claims Directive) complements the existing set of EU rules on consumer protection by addressing the identified problem of greenwashing and unreliable environmental labels. Together with the Proposal on common rules promoting the repair of goods, it forms the third package of proposals on circular economy.

Objectives

The proposal aims to:

• make green claims reliable, comparable and verifiable across the EU;
• protect consumers from greenwashing;
• contribute to creating a circular and green EU economy by enabling consumers to make informed purchasing decisions; and
• help establish a level playing field when it comes to environmental performance of products.

Key provisions

The proposal aims to ensure consumers receive reliable, comparable and verifiable environmental information on products.

It includes:

• clear criteria on how companies should prove their environmental claims and labels;
• requirements for these claims and labels to be checked by an independent and accredited verifier; and
• new rules on governance of environmental labelling schemes to ensure they are solid, transparent and reliable.

The proposal targets explicit claims that:

• are made voluntary by businesses towards consumers;
• cover the environmental impacts, aspects or performance of a product or the trader; and
• are not covered by other EU consumer rules.

In conclusion, it seems fair to assume that once brought into force, the Green Claims Directive will provide more clarity and stronger reassurance for consumers that products sold as ‘green’ are actually ‘green’. At the same time, it will benefit organisations that make a genuine effort to improve the environmental sustainability of their products.