EU Proposal for a Directive on Green Claims: Enhancing Transparency and Trust in Environmental Marketing

Understanding Green Claims

Green claims refer to assertions made by companies regarding the environmental attributes of their products or services. The Directivedefines them 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.’ These claims may include statements about energy efficiency, carbon footprint, recyclability, and other eco-friendly aspects.

What does the Directive require?

The proposed Directive on Green Claims sets out specific requirements to ensure the accuracy and reliability of environmental claims. It emphasizes the need for substantiation and proper documentation to support these claims. The new rules will exclusively cover voluntary claims in the context of business-to-consumer commercial practices within the European Union (EU). However, companies located outside the EU that voluntarily make environmental claims targeting EU consumers will also be obligated to adhere to the rules.

Key elements of the Directive:

1. Scientifically Sound Basis: Environmental claims should be supported by scientific evidence and reliable data. Companies will be expected to conduct life cycle assessments and employ recognized methodologies for evaluating environmental impacts. Companies will have to clarify whether the claim applies to the entire product or only specific parts of it, encompassing the entire life cycle or specific stages, and whether it applies to all activities of the trader or only a portion thereof.

    

2. Comparative Claims: Any comparative claims made in relation to environmental performance should be based on rigorous analysis and ensure accurate representation. This prevents misleading comparisons between products or services.

    

3. Clear and Unambiguous Communication: Green claims must be presented in a clear and understandable manner, avoiding vague or misleading language. Specific guidelines will be provided to help businesses communicate environmental information effectively.

    

4. Approval of environmental claims by independent verifier: companies will have to obtain approval from an independent verifier, who will assess whether the claims meet the Directive's requirements. If the evidence provided by the company is satisfactory, the verifier will issue an EU-wide certificate confirming compliance. Each Member State will have its own designated independent verifier to carry out this process.

    

5. The use of environmental labels: Environmental labeling schemes will be encouraged. However, the establishment of new public labeling schemes, unless developed at the EU level, will not be permitted. Additionally, new private schemes will only be allowed if they demonstrate greater environmental ambition compared to existing eco-label schemes and receive prior approval.

How will the Directive be enforced?

To ensure compliance, the Green Claims Directive outlines a robust enforcement mechanism.  National authorities will be responsible for overseeing the implementation of the directive within their respective jurisdictions. They may perform checks on the substantiation and accuracy of claims through various means, such as document review, investigations, and on-site inspections. Non-compliance with the directive can result in penalties and corrective measures. The specific penalties may vary among member states, but they can include fines, confiscation of revenues gained, temporary exclusion from public procurement processes and from access to public funding, or injunctions against making false or misleading claims. Companies that fail to comply with the requirements may also face reputational damage and loss of consumer trust.

What is next?

The proposed directive is currently in the early stages of the legislative process. Following its adoption, Member States will be given a period of 18 months to incorporate it into their national legislation. The measures outlined in the Directive will come into effect 24 months from the date of enforcement.

How can companies prepare?

To prepare for the implementation of the Green Claims Directive, companies should consider the following steps:

1. Review and Audit: Conduct a thorough review of current environmental claims and practices to identify any areas that may require adjustment or improvement.
2. Documentation and Substantiation: Ensure that all green claims are supported by robust scientific evidence and data. Consider conducting life cycle assessments and working with qualified experts to substantiate claims.
3. Communication Strategy: Develop clear and transparent communication strategies for environmental claims, focusing on accurate representation and avoiding misleading language.
4. Compliance Monitoring: Establish internal procedures to monitor compliance with the directive's requirements. Regularly review and update practices to align with evolving guidelines and best practices.

How can International Responsible Business Conduct Agreements support you?

International Responsible Business Conduct Agreements are partnerships between companies and different stakeholders, which aim to improve working and environmental conditions in the value chains of different sectors. These sectoral agreements can help companies engage in industry discussions, and collaborate with stakeholders to share best practices and insights. This active involvement will help adapt to the evolving regulatory landscape. More information can be found on the IRBC website.