- The European Commission, the executive branch of the EU, recently published its so-called “Green Claims Directive”.
- The much-anticipated proposal aims to establish an EU-wide methodology that will help clean up the environmental claims market.
- Activists have generally welcomed efforts to curb the burgeoning trend of greenwashing in companies.
- But they say months of lobbying have so “substantially watered down” the policy that the measures are now too vague to adequately address the issue.
Greenwashing refers to the marketing practice by which companies attempt to capitalize on the growing eco-product movement by selling goods marked as green when they are not.
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The EU outlined new measures to prevent companies from making unfounded environmental claims about their products, warning companies they could soon face fines of at least 4% of their annual turnover for “greenwashing”.
The European Commission, the executive arm of the EU, published its so-called “Green Claims Directive” on Wednesday. The much-anticipated proposal aims to establish an EU-wide methodology that will help clean up the environmental claims market.
The directive needs the approval of the European Parliament and the Council before it can then come into force.
The EU hopes to give consumers more clarity, so they can be confident that a product or service that is sold as being green is actually green.
Today most green claims are too good to be true and the proposition is… far from the real (green) deal.
Margaux Le Gallou
Environmental Information and Assessment Program Manager at the Environmental Coalition on Standards
However, the proposals have drawn a mixed response from consumer and environmental groups.
Activists have generally welcomed efforts to curb the burgeoning corporate greenwashing trend, but say months of lobbying have “materially watered down” the policy to such an extent that the measures are now too vague to adequately address the problem.
They have called on the European Parliament and the Council to improve the proposals so that they are “value” for consumers and businesses.
Greenwashing refers to the marketing practice by which companies attempt to capitalize on the growing eco-product movement by selling goods marked as green when they are not.
It is a significant problem within the EU. For example, a Commission study published in 2020 found that more than half (53%) of green claims about products and services were considered vague, misleading or unfounded, while 40% were unfounded.
Some phrases that consumers have become accustomed to when buying goods are “eco-friendly”, “ethical” or “sustainable”.
The Commission states that around 230 different eco-labels are used in the 27-nation bloc and cites evidence that this creates confusion and distrust among consumers.
The EU’s Green Claims Directive aims to counteract this trend.
It says the proposal will ensure claims to the benefit of consumers – and businesses – are clearly communicated, noting that companies that are making serious efforts to improve the environmental credentials of their products should be more easily recognized and therefore able to should be to increase their sales.
According to the Commission, the measures are aimed at explicit claims, such as “CO2-compensated delivery”, “packaging made from 30% recycled plastic” or “ocean-friendly sunscreen”.
However, terms like “carbon neutrality” are not covered, stakeholders said, noting that it is a preferred marketing strategy for companies looking to give their products a “green makeover”.
“This proposal is a huge missed opportunity to send a strong message to companies that the EU takes corporate responsibility for climate action seriously,” said Lindsay Otis, policy expert on global carbon markets at Carbon Market Watch.
“The Commission seems to understand the problems caused by greenwashing but refuses to adequately address them,” Otis said. “It is now up to the European Parliament and Council to enact a ban on claims of carbon neutrality because anything else will not only fail to protect consumers, it will also fail to push companies into truly sustainable practices.”
“With this proposal, we are giving consumers reassurance that something sold as green is really green,” said Frans Timmermans, Executive Vice President for the European Green Deal.
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The EU says that before communicating any of the covered types of green claims, companies must first have them independently verified and backed up with scientific evidence. EU member states would have control over setting up a verification process, overseen by independent bodies.
Businesses based outside the EU that make green claims targeting consumers on the bloc would also have to comply with the directive.
“Green claims are everywhere: ocean-friendly t-shirts, carbon-neutral bananas, bee-friendly juices, 100% carbon-offset deliveries and so on,” said Frans Timmermans, Executive Vice President for the European Green Deal.
“Unfortunately, all too often these claims are made without any evidence or justification whatsoever,” he added. “With this proposal, we’re giving consumers confidence that something sold as green is really green.”
The proposal excludes claims covered by existing EU rules, such as the EU Ecolabel or organic logo, the Commission said.
Margaux Le Gallou, program manager for environmental information and assessment at the non-profit Environmental Coalition on Standards, said: “Tackling misleading green claims is crucial to ensure consumers receive reliable information and are empowered to make sustainable choices. “
“Unfortunately, without harmonized methods at EU level, the new directive will offer little clarity to consumers and businesses and will only complicate the work of market surveillance authorities. These days most green claims are too good to be true and the proposal is… far from the real (green) deal,” added Le Gallou.
Others were more optimistic about the potential impact of the Commission’s proposed measures.
The proposals “will help provide clearer language, common governance criteria and minimum requirements to communicate corporate climate efforts in an authentic and credible way,” said Isabel Hagbrink, director of global communications at South Pole, a climate strategy firm and -solutions.
“In turn, we hope this will help spark bigger and more real business climate goals,” Hagbrink told CNBC via email. “Given that we are in our decade of action and climate scientists have sounded the alarm again, we simply cannot afford for anyone – especially large corporate leaders – to have ‘green silence’ on their climate efforts,” she added.