Green Claims Directive: An end to a greenwashing era?

Nika Bosnič Legal Advisor

Addressing greenwashing with rules on environmental claims is good, but full traceability could be the key to improving consumer trust.

Green Claims Directive new hope?

“Environmentally friendly,” “eco-friendly,” “green,” “climate friendly,” and the list goes on. Have you ever wondered what’s behind those attractive and well-selling words? Is it science or just a good marketing strategy? Say no more; this article has got you covered. 

In March 2024, the European Parliament voted in favor of the long-awaited EU rules aimed at bringing some order to environmental claims and labels, known as the Green Claims Directive. This vote comes as no surprise, as the Directive complements the recently adopted Directive on Empowering Consumers for the Green Transition (Empowering Consumers Directive), which imposed a general ban on greenwashing but is intended to be more specific and detailed. 

What may come as a surprise are some of the amendments proposed by the MEPs to the original text.

What the Parliament thinks

We have already written about the Green Claims Directive, its challenges, and the suggested amendments in our LoginEKO position paper.

The vote reflected a couple of positive  suggestions for change.

The Parliament proposed to extend the definition of the environmental label to ensure the Green Claims Directive applies consistently to any and all environmental labels covering one or more environmental aspects, even if they include other dimensions like social or quality aspects.

Another positive amendment that gained support from MEPs is the introduction of the advisory panel or Consultation Forum. The role of such a Forum, involving stakeholders from different areas such as industry representatives, trade unions, traders, retailers, importers, academic researchers, environmental protection groups, consumer organizations, etc., will be tasked to provide opinions on whether existing rules and methods are suitable for substantiating specific environmental claims and to be consulted on the preparation of the revision or the development of new delegated acts.

To help micro, small, and medium-sized enterprises, several initiatives were added to the original text to facilitate compliance and provide single points of contact where those enterprises could ask for additional information. However, micro-companies remain excluded from the scope of the Green Claims Directive. As mentioned in our position paper, when combating greenwashing, even the smallest companies can have an impact and can mislead consumers in this context. Therefore this change goes against the intention of the Directive.

MEPs retained the prohibition introduced under the Empowering Consumers Directive on environmental claims regarding neutral, reduced, or positive environmental impact for a product based on the use of carbon credits. Nevertheless, the text passed by the EU Parliament allows for  “ compensation claims” related to the use of the carbon credits  if they  pertain to the ‘residual emissions’ of a trader, as defined in the delegated acts. Furthermore, carbon credits used by traders for their residual claims must be Union-issued credits – certified units issued in accordance with the recently agreed Carbon Removal Certification Framework Regulation (CRCF). The tightening of regulations surrounding carbon credit-related claims is a welcome step, considering they are easy to mislead consumers.

The EU Parliament supported the Commission’s proposal regarding penalties for non-compliance, up to 4% of annual turnover. However, MEPs missed the opportunity to introduce other initiatives, such as funding and other financial support (including reduced national taxes) for those complying with requirements and overall making positive contributions to the environment.

Some other amendments that work towards ending greenwashing in a concrete manner include:

  • assessment substantiating environmental claims should be based on independent, peer-reviewed, widely recognized, robust, and verifiable scientific evidence, utilizing accurate information and taking into account relevant European or international standards.
  • All claims and supporting evidence must be evaluated by verifiers within 30 days. However, simpler claims and products could undergo quicker or simplified verification processes.
  • No prohibition for Member States to establish new environmental labels of their own. However, Member States’ environmental labels, as well as labels established in third countries for use in the EU market, will require the Commission’s approval.
  • SMEs – compared to larger businesses – should have one more year to become compliant with the Green Claims Directive.
  • Environmental claims by highly polluting industries shall be made in relative terms to allow consumers to understand the product’s overall negative impact on the environment.

What happens next?

The story doesn’t end here. The new Parliament, after this summer elections, could propose new alterations to the text before entering into negotiations within the trialogue. 

And regardless, some challenges and opportunities to play the system still remain:

  • The Green Claims Directive could become a leeway for companies to advocate one of their products as environmentally friendly, yet hiding the company’s overall bad environmental practices. 
  • The definition of substantiation and verification process, and the methodology in general are currently still pending, with many questions to be addressed in delegated acts, and
  • The simplification processes generally introduced by MEPs might just make it easier for companies to continue playing the greenwashing game, just under different rules.

Now, it’s time to sit tight and see what the June elections bring, and how Member States will accept the Parliament’s proposal.

And once the process is finished and Member States have adopted the new rules into national laws, we will know if the new Green Claims Directive is really an effort to push science into defining green products or just a good marketing strategy for the outgoing Commission.

Only full traceability can create trust

When it comes to matters like greenwashing, consumer safety, soil health, pesticides, and the broader food system, the key lies in building trust with consumers. Building trust that what they buy and what they eat is safe and healthy for themselves, as well as the planet.

Trust can be built through labeling, but as we have seen in the past, green claims are susceptible to greenwashing. And so, we suggest a simple solution: traceability.

Going a step further and integrating traceability information with environmental impact assessments like the ones from HESTIA, could lead to creating a sustainability rating system, offering a clear and efficient way to enhance transparency in the agriculture and food industry. 

Why not make this super simple and stop worrying about greenwashing altogether?

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