The new Green Claims Directive will oblige companies to back up their corporate commitment to the environment with data. It will also sanction misleading practices by companies regarding their products and activities. The aim is to crack down on greenwashing. That is, the practice of some companies and brands claiming to be greener and more sustainable than they really are.
With the new Green Claims Directive it will no longer be enough to appear environmentally friendly, it will also be necessary to prove it. The Green Claims Directive aims to promote corporate transparency of companies through the reporting of environmental, social and sustainability claims that are reliable, comparable and verifiable across the EU. The aim is twofold: not to mislead consumers or stakeholders and to avoid unfair competition practices suffered by companies that do comply with sustainability standards.
The inclusion of green claims in advertising, corporate communication and product packaging is widespread in the EU. According to a study by the European Commission, 80% of websites, online shops or advertisements include some kind of environmental claim. According to research by the Observatory of Local Production and Sustainable Consumption, these claims positively influence the purchases of 72% of Spaniards.
According to the study prior to the proposed directive, more than 50% of environmental claims are vague, misleading or unfounded; almost 40% have no evidence to back them up; and, in the case of the more than 230 green seals that exist at EU level, almost 50% have no verification whatsoever.
Now, with the Green Claims Directive, green or sustainable claims must be based on a comprehensive study, supported by a full life cycle analysis, considering environmental impacts from the beginning to the end of the products’ life cycle, including impacts on biodiversity, climate, soil and water.
Member States will appoint verifiers to pre-approve the use of claims such as “biodegradable”, “less polluting”, “uses less water”… This is to protect purchasers from misleading and ambiguous advertising. Claims, together with supporting evidence, must be examined within 30 days. Member States must ensure that the cost of verification and certification takes into account the complexity of the claim and the size of the companies requesting verification and certification.
Advertising based exclusively on carbon offset programmes shall be prohibited. Any mention of programmes related to carbon credits must be certified, such as those established under the EU certification framework for carbon offsets.
The next round of negotiations on this Directive will start after the new EU Parliament is constituted following the elections in June 2024.
The Ministry of Social Rights, Consumption and Agenda 2030, already started in March the processing of a Sustainable Consumption Law. One of its main aims is to firmly fight against greenwashing. Moving forward, the Ministry of Consumer Affairs has already published a Sustainable Communication Guide for businesses entitled: “How to include environmental information in your strategies and campaigns”. It provides detailed information on how to identify greenwashing and the relevant legislation. For example: if a company makes unverifiable environmental claims this could be considered an unfair practice in breach of Article 47.1.m of the Royal Legislative Decree 1/2007 and lead to penalties of up to 100,000 euros. Penalties could exceed these amounts, up to four to six times the unlawful benefit obtained by the unfair practice.
If your company needs advice to ensure compliance with these new regulations, Confianz can help you.
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