EU to crack down on greenwashing with ‘proportionate’ penalties #685


Draft plan addresses inflated claims about products’ environmental credentials

Companies will have 10 days to justify green claims about their products or face “effective, proportionate and dissuasive” penalties, under a draft EU crackdown on greenwashing seen by the Guardian.

Inflated claims by firms about their products’ environmental bona fides have grown along with public awareness of global heating in recent years.

One EU survey in 2020 found that 53% of environmental product claims were “vague, misleading or unfounded”. Authorities suspected 42% of green product gambits of being “false or deceptive” in another survey the same year.

Greenwashing claims can circulate in a wild west market environment for now but the substantiating green claims directive, due in March, will force firms to comply with a new legal framework.

The European Consumer Organisation (BEUC) said it strongly supported the plan for beefing up market surveillance authorities to fight greenwash. But “a future EU green claims law will only be as good as its enforcement, said BEUC’s director, Monique Goyens. “Authorities should regularly control green claims, publicly disclose their findings, and be able to fine companies who mislead consumers.”

The leaked directive takes no position on which penalties the EU’s 27 countries should use.

Goyens said phrases such as “climate positive” and “carbon neutral” should be “banned from the market altogether”.

The commission declined to comment on the leaked draft, which says it expects the law to save the equivalent of up to 7m tonnes of CO2 emissions over a 15-year period.

One EU official speaking on condition of anonymity said that, taken with a proposed empowering consumers directive, the green claims law “should clean up the environmental claims marketplace, where it is a bit footloose and fancy free vis-a-vis what manufacturers say about their products [and the reality]. These proposals could improve that dramatically.”

More than 200 eco-labels are currently used in the EU, relying on different methodologies. A commission survey found that half of the labels’ verification procedures were either weak or absent.

British businesses exporting to the EU would have to follow the new green claims rules, which the commission expects to cost EU businesses €9bn-€10bn (£7.9bn-£8.8bn), the official said.

While the UK and France already have rules for misleading green ads, the UK code does not fully define what constitutes an “unsubstantiated claim” and the French rules focus on climate concerns – such as “carbon neutrality” – rather than general sustainability issues, according to Antoine Oger, the head of the Institute for European Environmental Policy’s global challenges programme.

By comparison, the new directive is set to be “the most specific and far reaching, as it should lay out clear definitions of what constitute green claims and their breach, along with precise criteria on how to substantiate and abide by such claims,” he said.

It obliges firms to substantiate green claims using a standardised product lifecycle analysis that covers all environmental impacts, with important data – including a certificate of conformity – available to the public via QR code or a weblink.

EU states will have to empower or set up new agencies to launch investigations, make regular checks and generally enforce the new law, the draft says.

Some experts cautioned that the leaked proposal did not regulate the type of “carbon removal” methods that could be accepted in offsetting schemes.

After the Guardian revealed that more than 90% of so-called carbon credits used by firms such as Shell were largely worthless, hopes were high that the initiative would plug a hole left by another proposed EU green deal law for certifying CO2 removals.

But the new regime would still allow fossil fuel companies to “offset” their emissions through CO2 removal projects such as forests, which have a high risk of reversal through trees decaying, burning or moving north because of global heating.

Eli Mitchell-Larson, the co-founder of the Carbon Gap NGO, said: “These laws staying silent on what companies who buy EU-certified removals can do with them would be like inviting students to mark their own homework. It’s very simple: the vast majority of removals today involve storing carbon in nature. Despite their merits, these should never give a free ticket to burn fossil fuels.”

Business groups also raised concerns that the initiative might blur with other EU legislation on tackling greenwash.

“The EU has to avoid the real risk of overlap and contradictions with existing initiatives,” said Pedro Oliveira, BusinessEurope’s legal affairs director. “The European business community expects the EU to carefully consider and substantiate any additional rules in this already regulated space in the spirit of ‘better regulation’.”

The EU official said there had been some overlap with other green deal proposals because commission staff had originally been instructed to prepare legislative files on similar subjects for different commissioners.

Read more on The Guardian