Will the new EU Green Claims Directive solve greenwashing?

Sophie Harbert

Sophie Harbert

What is the EU Green Claims Directive?

Following on from our previous thought piece on greenwashing, here we discuss the importance of the EU Green Claims Directive. This piece of legislation is being introduced to enable consumers to make sense of the labels on products (both goods and services), to ensure all environmental claims are trustworthy and to prevent greenwashing. Currently, there are over 230 sustainability labels and 100 green energy labels in the EU, and 53% of green claims have been found to give vague, misleading, or unfounded information. Following that, around 40% of claims made such as ‘packaging made from 50% recycled plastic’, have no supporting evidence, leaving consumers in a state of ‘decision fatigue’ around the best products to choose.

When will the Green Claims Directive come into effect?

In March 2023, the proposal for the directive was adopted by the EU Commission, however as it will take 18 months for it to be transposed by member states, the legal requirements are expected to apply from 2026, depending on the speed of EU negotiations.

The new legislation will ensure that all environmentally related advertising campaigns are scientifically backed, allowing them to be comparable across the EU. Companies will need to externally verify the claims they make using a life cycle assessment, and communicate them accurately. As well as ecological impacts, a range of social criteria like human rights will also be considered.

How will the directive affect how to communicate sustainability?

The new directive will affect all businesses with EU operations, except micro enterprises with less than 10 employees and a turnover of less than EUR 2 million. Even businesses based outside the EU but with consumers there will have to comply, meaning it will be a key element to consider within sustainability communication strategies.

The directive has arrived at a topical time alongside the stand of the Advertising Standards Authority (ASA) against greenwashing and unsubstantiated claims of the terms ‘carbon neutral’ and ‘net zero’. The EU Green Claims Directive will also create restrictions on advertising carbon neutrality, ensuring brands cannot use the terminology if they are relying on unregulated compensation measures such as carbon offsets. A complaint process will be put in place and organisations that fail to comply could end up with fines of up to 4% of their annual turnover — a large price to pay for overstating environmental benefits.

A consumer-empowered future

This new legislation should allow consumers to better navigate the options available to them, allowing them to understand why one product is more sustainable than another. Instead of using broad terms such as ‘biodegradable’, there will be more specific wording such as ‘this packaging will biodegrade within a month in home compost,’ educating and empowering people to act responsibly.

This will also hopefully reduce incidents of ‘wishcycling’, where items end up contaminating recycling systems due to consumers mis-sorting them. We hope that increased transparency around impact will increase pressure on businesses to improve their environmental and social credentials if they want to maintain their competitive advantage.

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