Unveiling the EU Green Claims Directive: A Game-Changer Against Greenwashing

It’s great to see the European Parliament taking such a bold step forward in the fight against greenwashing with the new EU Green Claims Directive.

For too long, companies have been getting away with making misleading claims about the environmental impact of their products or services. This has made it difficult for shoppers to make informed choices about what they buy. And it has been even harder for businesses that are genuinely committed to sustainability to compete.

What is the Green Claims Directive?

The Green Claims Directive aims to stop greenwashing by setting standards for environmental or sustainability claims. The spark came from a 2020 study showing that 53% of environmental claims in the EU were vague or misleading. Under the Green Claims Directive, if your company makes claims like "T-shirt made of recycled plastic bottles" or "ocean-friendly sunscreen," you will need to meet minimum standards for backing the claims up.

When does the Green Claims Directive come into effect?

The directive kicks in 20 days after appearing in the Official Journal at the EU level. Member States have 18 months to put laws and regulations in place and must enforce these rules 24 months after the directive's effective date. Keep these timelines in mind to stay compliant! Here's a bullet point summary of the latest key dates:

• 2023: Significant progress was made in updating of the EU Directive on "Green Claims".
• 9 November 2023: Consideration completed of the draft report.
• Summer 2024: Anticipated vote in the joint committee.

However, we must note that these timelines and developments are subject to change as they depend on various factors and legislative processes.[LB1]?

The EU Green Claims Directive will not directly affect the UK and Northern Ireland since they are no longer EU members, however it will apply immediately once enshrined in EU law to the Republic of Ireland, as EU Members. However, both the UK & NI are likely to set up similar regulations to stay competitive in the green market and align with environmental goals. Businesses in the UK and Ireland selling in the EU will also likely still need to comply with the EU directive.

What are potential penalties for non-compliance with the Green Claims Directive?

Non-compliance may result in fines up to 4% of annual turnover in affected Member States. Additional penalties include revenue seizure from related transactions and exclusion from public procurement and funding for up to 12 months.

How will the Green Claims Directive aim to reduce greenwashing?

The directive aims to cut down on greenwashing by setting strict verification and substantiation standards for environmental claims. Member States will oversee these processes, relying on independent, accredited verifiers. So, if your company makes a green claim, be prepared to back it up with robust, widely recognised scientific evidence.

If you're comparing your product to others, make sure the comparison is fair and based on similar data. Aggregate scores that lump various environmental impacts together are not allowed unless they align with EU rules.

EU-level labelling schemes are the gold standard and all new public labelling schemes must be at the same EU level. New private schemes need pre-approval and must show they are more environmentally ambitious. All environmental labels need to be transparent, third-party verified, and reviewed regularly.

The new Directive will hopefully put an end to all the 'greenwashing' we see. It will ban generic environmental claims like "eco-friendly", “Green” and "biodegradable" unless they can be backed up by solid evidence. It will also crack down on claims about product durability that turn out to be false.

This is a major victory for transparency and accountability. It will give shoppers and consumers the information they need to make informed choices about the products they buy. And it will help businesses that are serious about sustainability stand out from the crowd.

We believe that this new Directive is a watershed moment in the fight for sustainable business practices. It shows that the EU is serious about tackling greenwashing and planned obsolescence. And it sends a clear message to businesses around the world: consumers are no longer willing to be fooled.

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What are the biggest opportunities for businesses?

The Green Claims Directive offers several opportunities for businesses:

• Spur Market Opportunities: By encouraging competition around sustainable products, the directive opens new market segments, allowing businesses to diversify and grow.
• Enhance Product Quality: The focus on sustainability can lead to improved product performance, benefiting both consumers and manufacturers.
• Increase Credibility: The directive provides a framework for businesses to substantiate their environmental claims. This can build trust among consumers and help companies stand out.
• Avoid Greenwashing Pitfalls: Businesses can sidestep the reputational risks associated with greenwashing by adhering to the directive's standards.
• Level Playing Field: By regulating private environmental labels, the directive makes it easier for businesses to compete fairly, reducing consumer confusion in the process. Overall, the directive aims to reward genuine sustainability efforts, spur innovation, and drive market growth, while holding businesses accountable for their environmental claims.

In addition to the above, the new Directive is part of a broader EU strategy to promote sustainable consumption and production. This strategy includes a number of other initiatives, such as the Eco-design Directive and the Circular Economy Action Plan. These initiatives are all working together to create a more sustainable future for Europe.

To discuss your sustainability challenges or find out more about POPAI’s work in this area please contact us: [email protected].

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