New rules for Green Claims
In recent times there has been a renewed discussion about the need to protect consumers from falling victim to greenwashing tactics when purchasing sustainable products or services. In this context, it is important to highlight how European regulations are evolving to provide greater control and verifiability of sustainability claims.
Traditionally, companies that engaged in greenwashing are subject to rules under the Directive on Unfair Commercial Practices and the Directive on Consumer Rights, which aim to protect consumers from false or misleading marketing claims and to ensure fair competition in the marketplace. The Directive on Unfair Commercial Practices prohibits businesses from making false or misleading claims about their products or services, while the Directive on Consumer Rights requires companies to provide accurate and clear information to consumers about the products they offer.
Despite their intentions to protect consumers, both directives face several obstacles. One of the main challenges is that while these directives are restrictive, they do not always offer sufficient protection for consumers. Moreover, the directives do not provide specific and explicit guidelines on how environmental claims should be presented. As a result, consumers are often confused, and they face challenges in distinguishing between legitimate and false sustainability claims. In Europe alone, consumers are exposed to more than 200 labels on sustainability, which can lead to further confusion and mistrust in the market.
Something is changing today. In December 2019, the European Commission adopted the European Green Deal, which aims to create a sustainable and climate-neutral economy by 2050. One of the objectives of the Green Deal is the need to counter false environmental claims, provide reliable and comparable information to consumers to make sustainable decisions, and reduce the risk of greenwashing.
Subsequently, the need to address greenwashing has been identified as a priority in both the new Circular Economy Action Plan and the new Consumer Agenda. In March 2022, a Proposal for a Directive on Empowering Consumers in the green transition was presented, aimed at strengthening consumer protection against false environmental claims and ensuring that they receive adequate information on the sustainability and reparability of products before purchasing.
In March 2023 a Proposal for a Directive on Green environmental Claims was presented, which requires companies to support their claims regarding environmental attributes or the effectiveness of their products and organizations with strong, scientifically sound, and verifiable methods. The proposal aims to amend the Directive on Unfair Commercial Practices and the Directive on Consumer Rights to provide consumers with greater protection against unfair commercial practices.
As we move forward in our efforts to protect the environment, it has become increasingly clear that one of our key priorities must be to counter false environmental claims and provide consumers with reliable information. The European Green Deal, Circular Economy Action Plan, and Consumer Agenda they all prioritize the need to counter false environmental claims and provide consumers with reliable information.
The Proposed Green Claims Directive together with the Directive on Empowering Consumers in the Green transition represents a step towards a more transparent and sustainable economy. By establishing a common methodology for the substantiation of green claims, the EU aims to tackle the problem of greenwashing.
This will enable companies to accurately and truthfully communicate the environmental impact of their products and services to consumers, making it easier for consumers to distinguish between companies that are genuinely committed to sustainability and those that are taking advantage of the lack of regulations.
Despite these advancements, there are still challenges to be addressed.
One of the biggest challenges is the lack of clear and specific rules around carbon-neutral claims. Carbon neutrality is still considered for many a complex and multifaceted issue, and it can be difficult to measure and substantiate claims related to it. Most likely, the EU will address this issue in the future by developing additional guidelines or regulations specifically focused on carbon neutrality.
The provisions on emission offsetting in the new proposal are rather modest at the moment, and only provide obligations related to:
1. Separating total offset emissions, from greenhouse gas emissions generated by the company, as additional environmental information;
2. Specify whether these offsets refer to emission reductions or removals;
3. Describe how the credits used to offset emissions are of high integrity and properly accounted for to reflect the stated climate impact;
4. Provide information on the extent to which sustainability claims related to a product or service are linked to offsetting emissions.
As we await further guidelines and regulations, we encourage our customers to follow the highest international standards built to measure true carbon neutrality, choosing high-quality carbon credits to ensure not only substantiated and trustworthy claims, but also, a meaningful contribution to stop climate change.