?? LAUNDRY DAY ?? - LETS TALK ABOUT GREENWASHING

THIS WEEK: The EU Directive against Greenwashing?(also known as?Green Claims Directive).

Greenwashing?is when companies try to create a positive image for themselves through claims about environmental protection measures or climate-friendly production, even though they don't actually operate sustainably when you look closely.

You can find 10 examples of greenwashing from 2023?HERE

With the increasing relevance of sustainability for consumers' purchasing decisions, the use of so-called green claims in communication and advertising has increased steadily. Terms like "environmentally friendly," "sustainable," or "climate-neutral" are used more and more. According to a?2020 EU Commission study, more than half (53%) of these claims are vague, misleading, or unsubstantiated.?

To enable???truly sustainable???purchasing decisions, put an end to greenwashing, and clear up the jungle of sustainability labels, the European Union (EU) has introduced the?GREEN CLAIMS DIRECTIVE.

Through strict requirements for green advertising claims,?obligations for checks,?and penalties for violations, the directive aims to demand more diligence from producers and strengthen consumer confidence in green products.

The Green Claims Directive is the third package of proposals for a???CIRCULAR ECONOMY??, along with ideas on how products can be repaired more often instead of being thrown away. It applies to all companies that offer products to consumers in the EU, regardless of whether they are manufactured in the EU. An exception are: Micro-enterprises with fewer than ten employees and an annual turnover of less than two million?Euros.?Environmental claims about products, services, or the company itself, for which there are no specific?rules, f.e.?when the term ?climate-neutral" is used, must be verifiable and communicated.?

The statements must:

• Indicate whether the information refers to the entire product, the entire company, or only to specific areas
• Be based on recognized scientific findings and the current state of technology
• Make it clear how the green product is actually better compared to conventional products
• Consider the entire life cycle
• In the case of CO?e, disclose whether emissions are reduced or only compensated

According to the draft directive, both authorities and private individuals or organizations with a legitimate interest, such as NGOs or consumer protection organizations, can file complaints against environmental claims. The catalog of sanctions includes:

• Confiscation of the revenue that the trader has generated with the products in question
• Temporary exclusion from public tenders, grants, and concessions
• Fines of at least four percent of annual turnover

The use of?SUSTAINABILITY LABELS?will also be regulated in the future. There are currently more than 230 different environmental labels across Europe, each based on different methods.

"There is a huge business behind climate-neutral labels," criticizes Manuel Wiemann (Foodwatch). "Companies don't have to reduce their own emissions, but can offset their CO??balance through cheap certificates from questionable climate protection projects.“?LINK

The new directive will only allow labels that are based on official certification systems or introduced by the state. According to the new regulations, it will also be forbidden in the future to:

• Make unsubstantiated claims about durability
• Encourage consumers to replace consumables earlier than absolutely necessary (which is often the case f.e. with printer ink)
• Market non-repairable goods as repairable. This is intended to put a stop to the (intentional) premature wear and tear of products ("planned obsolescence")

(LINK)

On June 17, 2024 the European Council adopted its general approach to the proposed?GREEN CLAIMS DIRECTIVE. The finalised GCD text is expected to be agreed and adopted early/mid 2025 (LINK). It will then be published in the Official Journal. Member states then have 18 to 24 months to transpose the directive into national law. Companies will then have approximately two years to comply with the obligations.

Roughly 2 years may seem like enough time to meet the requirements of the?GREEN CLAIMS DIRECTIVE. However, the dimension becomes clear when you look our supermarkets. Considering the time it takes to develop a new packaging, to prove and verify environmental aspects, to communicate the advertising claims to consumers, and to take into account national laws for sales abroad and then realize that in Germany supermarkets often offer around 200,000 individual ???food products???, the 2 years will be very short. (LINK)

In addition, the ??financial costs?? for certification are not insignificant. The EU Commission itself expects costs of around €50,000 for the certification of a single green claim. Accordingly, the DIHK (Deutsche Industrie und Handelskammer?=?German Chamber of Industry and Commerce) notes that the?GREEN CLAIMS DIRECTIVE?represents a significant encroachment on the competitiveness of SMEs. The exceptions for micro-enterprises with up to 10 employees only helps to a very limited extent. In addition, the planned penalties (high fines, the confiscation of revenue, and the exclusion from public tenders) would lead to a setback instead of promoting sustainability - as companies would no longer be able to communicate their commitment to the environment in an economically viable way. (LINK)

(Hmmm, I’m thinking: ... if the companies hadn't behaved the way they did, the directive wouldn't have been necessary.)

Regarding the objective of the?GREEN CLAIMS DIRECTIVE, Anna Cavazzini (Greens, Chair of the responsible EP Internal Market Committee) says:?

"INVESTMENTS BY COMPANIES IN CLIMATE PROTECTION PROJECTS ARE WELCOME, AND OF COURSE THEY MAY CONTINUE TO BE COMMUNICATED. ONLY THE APPEARANCE MUST NO LONGER BE CREATED THAT PLANTING TREES IN THE RAINFOREST MAKES THE INDUSTRIAL PRODUCTION OF A CAR, THE ORGANIZATION OF A FOOTBALL WORLD CUP, OR THE PRODUCTION OF COSMETICS ITSELF CLIMATE-NEUTRAL.“ (LINK)

Consumer advocates also welcome the new directive. "THE EUROPEAN PARLIAMENT HAS (...) VOTED FOR THE RIGHTS OF CONSUMERS AND FOR THE PROTECTION OF THE CLIMATE," says Manuel Wiemann of Foodwatch.

Does this new directive have a direct impact on our industry? Not at first, but we estimate that in the next?couple?years we can get ready for longer legal texts and their exchange when an advertising?claim is?challenged????There are exciting times ahead.?

Let us know in the comments how you think new legislation will?affect (y)our?industry!