Navigate the new normal and understand EU’s Green Claims Directive
In a landmark decision, the EU Parliament has adopted its position on the Green Claims Directive, targeting the greenwashing problem—where companies make misleading or unsubstantiated claims about their products' environmental benefits. As buzz around the directive grows, we want to clarify its status and implications for businesses and consumers.
Understanding the Green Claims Directive
What is the Green Claims Directive?
The Green Claims Directive is designed to establish a consistent framework for EU companies to substantiate their environmental claims. This is an important step towards:
Ensuring companies can back up their “green” claims with verifiable evidence.
Claims will need a third-party verification before they reach the market.
The directive tackles a pressing concern that has been highlighted in several studies: more than half of today’s environmental claims are either ambiguous, misleading or entirely baseless. Moving forward, claims of environmental benefits will never be just a marketing tactic.
Key parts of the directive
Verification requirements
All environmental claims must now be backed by verifiable evidence to strengthen consumer trust and corporate accountability.
Exemptions and compliance timeframes
Small businesses, known as microenterprises, are not obligated to prove the validity of their environmental claims. However, if they choose to, they can voluntarily acquire a certificate that confirms their environmental claims are accurate.
SMEs will have more time for compliance since the process may require some initial investments.
Penalties
Non-compliance could lead to severe penalties, including exclusion from procurement processes and fines up to 4% of annual turnover. This shows the importance of transparency and accountability and elevates green claims and consumer protection to the level of other key legislations.
Banned claims and substantiation
What kind of claims will be banned?
Outlined initially in the proposal for a Directive on empowering consumers for the green transition (EmpCo) which amends Unfair Commercial Practices Directive (Directive 2005/29/EC), certain generic environmental claims will require further substantiation and verification under the Green Claims Directive. These claims include, but are not limited to:
environmentally friendly
eco-friendly
green
nature’s friend
ecological
environmentally correct
climate friendly
gentle on the environment
carbon friendly
energy efficient
biodegradable
bio-based
or similar statements.
The Green Claims Directive aims to complement and strengthen the existing framework by specifically demanding verifiable evidence and independent verification for such claims. This ensures that only claims with genuine, substantiated environmental benefits are made, fostering greater transparency and consumer confidence.
How do you substantiate green claims?
To substantiate environmental claims, businesses must rely on independent, peer-reviewed, widely recognised, robust and verifiable scientific evidence. It's clear that the EU emphasises the science-based aspects of claim substantiation, to ensure that the methodologies are in line with best practise.
Companies looking to validate their green claims must be prepared for an investment similar to the rigorous process required for CE-marked products and conformity declarations. Comprehensive evidence gathering will be needed.
While the future specifics are unfolding, the trend towards stricter verification processes is clear.
The necessity of the green claims directive
This directive empowers consumers to make informed choices and puts accountability on businesses. It's a significant step in harmonising environmental claims standards across the EU, addressing both national laws and self-regulatory measures.
Status and future timeline
As of March 2024, the EU Parliament's adoption of its position was a big step forward. However, the directive is not finalised. The legislative process will continue post-European elections.
This follows the European Union’s ordinary legislative procedure. Once the new European Parliament is in place, the Council of the European Union and the European Commission will hold informal negotiations—a trilogue. A trilogue’s aim is to reach a provisional agreement that the co-legislators (the Parliament and the Council) accepts. The Green Claim’s next step is within the European Union’s ordinary legislative procedure, and if everything goes as projected we can expect a decision in 2025 and implementations to start in 2027. This gives businesses plenty of time to prepare for compliance.
Preparing for compliance
What can you do now?
Start with a review of your existing explicit environmental claims. This approach offers a clearer pathway to identifying which claims need verification. With our expertise, we at SB Insight can guide you through navigating the New Normal from a brand perspective.
Feeling overwhelmed? Boost your team’s knowledge with our Sustainability Communication Training. This course navigates the line between greenwashing and greenhushing; in other words, it will make you aware of what impact the upcoming legislation will have on your marketing. We will give you practical tips and insight into future trends that will help you carve your way in mastering sustainability communication. Sign up now to transform how you discuss sustainability.
During the workshop we will go through:
Sustainability essentials
Demystifying greenwashing and greenhushing
Credible sustainability messaging
Building trust with consumers through transparency and clarity
The EU Green Claims Directive and EmpCo: What you need to know.
Going beyond compliance
Remember, transparency in sustainability efforts is not just a regulatory requirement; it's what people out there really want to see. An untold sustainability story is as good as nonexistent. And if your story doesn’t get to the people you want to reach, why would they consider you? Or even, why would the brightest talent want to be part of your journey?
Join our workshop to ensure your sustainability narrative can balance the line between greenwash and greenhush and still resonate with your audience.
More information about the workshop: Erik Elvingsson Hedén - erik.heden@sb-insight.com
References
All sources were accessed in March 2024.
European Commission (2024). Questions and Answers on European Green Claims, 22 March. Available at: https://ec.europa.eu/commission/presscorner/detail/en/qanda_23_1693.
European Parliament (2024). Parliament wants to improve consumer protection against misleading claims, 12 March. Available at: https://www.europarl.europa.eu/news/en/press-room/20240308IPR19001/parliament-wants-to-improve-consumer-protection-against-misleading-claims and https://www.europarl.europa.eu/doceo/document/TA-9-2024-0131_EN.html.
Legislative Observatory, European Parliament (2024). Substantiation and communication of explicit environmental claims (Green Claims Directive). Available at: https://oeil.secure.europarl.europa.eu/oeil/popups/ficheprocedure.do?lang=en&reference=2023/0085(COD).