The EU has issued its long-awaited Green Claims Directive, hoping to curb greenwashing and build consumer trust in more sustainable products.
Under the new proposals — which are expected to come into force before the current European Commission’s mandate ends in October 2024 — environmental claims about products or services will need to be specific, proven with scientific evidence, checked by independent accredited verifiers, and communicated to consumers in a clear way. Environmental labels and certifications, which the EU says are too fragmented and confusing, are also under fire.
The new rules will apply to all companies producing in the EU or importing products made elsewhere into EU countries, but will ultimately be voluntary, as companies can opt out by avoiding environmental claims altogether. “These proposals will only affect companies that wish to make green claims, and the schemes awarding environmental labels,” says EU commissioner Virginijus Sinkevičius. “Companies can simply choose not to make such claims about their products and services.”
A 2020 study by the European Commission found that 53.3 per cent of environmental claims in the EU were vague, misleading or unfounded, and 40 per cent were unsubstantiated. Among the misleading claims, 25 per cent came from the fashion industry, making it the top offending industry. The Green Claims Directive is part of a larger sustainability effort on behalf of the EU. It feeds into the European Green Deal, building on the strategy for sustainable and circular textiles released last March, and November’s packaging crackdown, and announced alongside the right to repair proposal. It should be increasingly clear to brands how these efforts fit together, says Sinkevičius. Where the Green Claims Directive lacks a clear methodology for quantifying claims, the upcoming Eco Design Principles will fill the gaps.
“Consumers can contribute a lot to the green transition, but only if we can trust that the products we buy and the services we use are as green as they claim to be,” says Sinkevičius. “Companies routinely use environmental claims to market their goods, and they are becoming increasingly sophisticated. When consumers see those claims, it’s difficult to separate truth from fiction.”
One notable exclusion of the directive was the hotly anticipated product environmental footprint (PEF) methodology, which the EU has been developing as a way to measure environmental performance. Despite criticisms, experts are concerned that companies will continue to rely on fragmented and imperfect methodologies without it. However, this isn’t necessarily a negative, says Eco-Age sustainability consultant Philippa Grogan. “It means the EU has recognised how difficult it is to substantiate and quantify green claims. And, I’d much rather the directive was a bit ambiguous than super steadfast in the wrong way.”
How will this be enforced?
The proposal targets explicit claims such as “T-shirt made of recycled plastic bottles”, “CO2 compensated delivery”, “packaging made of 30 per cent recycled plastic”, and “ocean friendly sunscreen”. However, it also takes aim at less obvious forms of greenwashing: companies promoting one small pilot or initiative as evidence that the entire company is sustainable, or making sustainability targets public and then changing them or failing to report progress.
Claims will be verified by independent bodies, including consumer protection agencies such as the UK’s Competition and Markets Authority, the International Consumer Protection and Enforcement Network, and the Norwegian Consumer Authority, all of which have ongoing greenwashing investigations. H&M, the Sustainable Apparel Coalition’s Higg Index and Asos are among those who have faced action so far. (In light of the ongoing investigations, H&M pulled its ‘Conscious’ collection, Asos removed its ‘Responsible Edit’ from its site, and an update on the Higg Materials Sustainability Index is expected in June.) The consequences for non-compliance will be set by individual EU member states, and may range from fines and removal of products to adjustments in product positioning, depending on the scale of violations.
“One of the big challenges is that a lot of fashion brands still don’t believe that sustainability can be profitable,” says Muchaneta Ten Napel, founder and CEO of research firm Shape Innovate. “Consequences need to hit companies — particularly bigger brands — where it hurts, so they don’t just swallow the penalties and carry on greenwashing.”
Putting the onus on national consumer protection agencies to enforce the directive could be a limitation, says George Harding-Rolls, campaign manager at non-profit Changing Markets Foundation. “Enforcing this directive brings a lot of administrative work and a huge regulatory burden.” He says a few high-profile, landmark cases could set the precedent for other brands who can then avoid making the same mistakes. “It’s likely that many of the big brands accused of greenwashing will settle out of court rather than take on a public case, which could pose greater reputational damage.”
How to make environmental claims
While some brands are fully aware that they are misleading consumers, others don’t realise they are greenwashing, says Shape Innovate’s Ten Napel. If brands are stuck for where to start, they should look to the most robust pre-approved certifications, including the EU Ecolabel, says Harding-Rolls. Changing Markets Foundation’s 2022 report, ‘Licence to Greenwash’, found that the EU Ecolabel was among the most thorough certifications, but few brands used it because of the onerous process involved.
When in doubt, brands should proceed with caution. “The best kind of sustainability communication presents a product or business as imperfect,” says Eco-Age’s Grogan. “Don’t cherry-pick favourable attributes, don’t use vague or misleading language, remember that some things are not meant to be marketing tools, and acknowledge that it’s a journey. Consumers and regulators alike are a lot more receptive to that, as the new directive shows.”
The hope is that independent assessments will weed out irrelevant claims and help companies communicate potential negative trade-offs as well as benefits, giving consumers a more full and accurate picture of what they’re buying into. Expanding on this, commissioner Sinkevičius pointed to carbon offsets, which many companies use as a controversial claim to carbon neutrality. “We are not banning carbon offsets, but the full information will need to be provided to consumers, and an independent verifier will need to assess the validity of those offsets,” he explains. “You cannot claim carbon neutrality without disclosing that the claim relies on offsets, and what type of offsets you use.” This could be a lot of information to fit onto already-packed product labels, but incoming legislation around digital product passports should help to streamline the communication of green claims, the commissioner adds.
Claims or labels that use aggregate scoring of the product’s overall environmental impact will no longer be allowed, unless this is specified in other EU rulings. And, comparisons to other products or companies will only be allowed if they are based on equivalent information or data.
“A period of greenhushing — when organisations deliberately don’t report sustainability progress to avoid public scrutiny — is inevitable,” says Harding-Rolls. “But it won’t last.”
A reckoning for environmental labels
Environmental labels are also under fire. The EU has counted at least 230 different environmental labels in the public and private sphere, an intense proliferation it says has created consumer confusion and distrust. “We want environmental labels that are more transparent and easier to understand,” says commissioner Sinkevičius. “Under the new rules, we will only allow new public schemes that work at the EU level. We have to mobilise the resources we have, to work together on reliable, EU-level labels such as the EU Ecolabel. If companies want to bring in a new private scheme, it will need to be better than the ones that are already in place.”
“With this proposal, the EU has struck a match for the upcoming bonfire of certification schemes,” says Changing Markets Foundation’s Harding-Rolls. “We have warned such labels to become more robust and transparent for many years, so those who have dragged their heels are in for an unpleasant surprise.”
Commissioner Sinkevičius anticipates that a lot of the certification schemes and environmental labels currently available will cease to exist once the new directive is enforced. This will be when the real work begins, says Harding-Rolls. “We need the smokescreen of greenwashing to clear so we can start the heavy lifting of actually making the industry more sustainable.”
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