Green light for the green claims directive from the European Parliament

published on 8 April 2024 | reading time approx. 4 minutes

The European Parliament adopted its position on the Green Claims Directive in plenary. This directive would oblige companies to provide supporting documentation for their environmental marketing claims on a given product or service.

What is the concrete meaning of this Directive? The European Parliament wants to change the way in which companies advertise and connect environmental claims to their products by setting up a verification and pre-approval system delegated to a specific authority, to fight the use of misleading marketing advertisements. This, to counter the phenomenon of the so-called greenwashing whereby false or misleading sustainability claims are used -e.g., 'biodegradable', 'less polluting' or 'environmentally friendly raw material-based' products- that can mislead consumers.

It should be underlined in this context that sustainability claims also include all social characteristics of a product or aspects related to circularity, such as durability, reparability, or recyclability, through the general presentation of a product.

Nowadays, consumers increasingly orient their purchasing decisions towards sustainability. This is in fact one of the key points of the Directive: to ensure that environmental claims on a product are supported by solid documentation to provide consumers with the appropriate tools to make a more informed choice free from misleading and deceptive information.

The current scenario on greenwashing is also illustrated by the member of the Committee on the Internal Market, Mr. Andrus Ansip (Renew, EE), who states that: "Studies show that over 50 per cent of environmental claims are vague, misleading or unfounded. We cannot speak about happy consumers if every other green claim is false. We cannot talk about a level playing field for our entrepreneurs while some traders are cheating.”

Another key point is encapsulated here: a fair level playing field between companies. The establishment of stricter rules on environmental claims would avoid the phenomenon whereby some companies, 'cheating', use green claims without having made any effort in the area of sustainability, to the detriment of companies that have actually invested in this area.

The introduction of the regulations is also intended to incentivise and protect fair competition between companies to bring increasingly sustainable products onto the market in order to attract the largest number of consumers.

The Directive, adopted at first reading with 467 votes in favour, 65 against and 74 abstentions, in addition to supplementing the European standard on combating greenwashing, would provide for declarations and supporting evidence to be assessed within 30 days. There would also be simplified procedures in the case of declarations and products for which the verification is more rapid or simplified.

As far as the subjective scope of application is concerned, micro-businesses are excluded. Instead, small, and medium-sized companies would benefit from one year more time to comply with the new provisions than large companies.

The European Parliament's proposal on penalties for infringements provides for temporary exclusion from public tenders, loss of revenue and fines amounting to at least 4 per cent of the company's annual turnover.

The text seems to provide a 'way out' with regard to the prohibitions imposed on green claims: green claims based on carbon offsetting systems (e.g., 'climate compensation') should tend to be banned. However, the European Parliament has decided that it will be possible to use them as a very last resort if companies have already done their utmost to reduce their emissions. The offset (the so-called carbon credit) must in any case be certified. The modalities of certification still seem unclear, although the European Parliament refers to the 'certification framework for carbon removal'.

It is clear that the lack of clarity surrounding the claim certification systems, which are based on carbon offset systems, means that there is still a risk of the environmental statements crossing over into the field of greenwashing.

A further proposal by the European Parliament concerns environmental declarations on products containing hazardous substances. Such declarations will be allowed for now, in fact the European Parliament decided to refer the decision back to the Commission.