The Green Claims Directive aims to create level playing field on the EU market

April 4, 2023

The new directive from the Commission will work to tackle misleading and vague ‘Green claims’, benefitting both consumers and businesses by creating a more level playing field. We have compiled the key take-aways from the new proposal.

Unsubstantiated claims

A Commission study from 2020 found that 53 percent of a total of 150 studied environmental claims made in the EU were vague, misleading, or unfounded. Another study from the same year showed that, out of 344 sustainability claims, more than half of them (57.5 percent) were not backed by sufficient elements to enable a judgement of the claim's accuracy. The lack of common regulations on sustainability claims poses a challenge for sustainable businesses within the EU, since they, as a consequence, face unfair competition. In addition, the absence of regulation creates distrust and confusion amongst consumers.

Improving consumer law

In order to empower consumers to more actively participate in the green transition a proposal to update the Union consumer law was presented by the Commission in March 2022. The issue of ‘Greenwashing’ was also specifically addressed in the New Circular Economy Action Plan and the New Consumer Agenda. The Green Claims Directive is suggested to complement changes to the Unfair Commercials Practices Directive through more specific regulations on sustainability claims.

The Green Claims Directive

The proposed directive targets two main areas: access to reliable information and harmonization of laws and regulation on labels. The measures to ensure that consumers can access reliable information are, amongst others, that member states should make sure that traders carry out assessments to substantiate green claims. For example, the assessment shall:

• Specify whether the claim regards the entire product, a part or a certain aspect of the product. Similarly, activities carried out by the traders are subject to the same assessment specification.
• Rely on widely recognized scientific evidence.
• Demonstrate that claims are significant from a life-cycle perspective.
• Include primary information available to the trader which is subject to the claim.

There are currently 230 different private and public environmental/sustainability labels in the EU which creates confusion and distrust amongst customers. The directive therefore proposes to limit new labels and impose stricter criteria for existing labelling schemes. The environmental labelling schemes must comply with requirements such as:

• Providing information about the ownership and decision-making bodies of the labelling scheme, where the information should be transparent, free of charge and sufficiently detailed.
• Providing information on the objectives of the labelling scheme, where information should be transparent, free of charge and sufficiently detailed.
• That the labelling scheme has been developed by experts that can ensure scientific robustness.

Moreover, the directive prohibits the establishment of new labelling schemes on regional and national level by public authorities. This does, however, not apply to EU labelling schemes.

According to Frans Timmermans, Executive Vice-President for the European Green Deal, the Green Claims Directive will be greatly beneficial for sustainable businesses and consumers in the EU:

“Green claims are everywhere: ocean-friendly t-shirts, carbon-neutral bananas, bee-friendly juices, 100% CO2-compensated deliveries and so on. Unfortunately, way too often these claims are made with no evidence and justification whatsoever. This opens the door to greenwashing and puts companies making genuinely sustainable products at a disadvantage. Many Europeans want to contribute to a more sustainable world through their purchases. They need to be able to trust the claims made. With this proposal, we give consumers the reassurance that when something is sold as green, it is actually green.”

Source: EU press release & The Green Claims Directive