At a time when climate change is becoming ever more present and consumers are becoming increasingly environmentally aware, green claims are becoming more and more important for companies. But how can we be sure that statements such as “climate-friendly jeans” or “packaging made from ocean plastic” are really true? In 2020, the European Commission found that over 50% of the environmental claims they investigated in the EU were vague, misleading or unsubstantiated, and 40% were not even verifiable. Greenwashing scandals have also been repeatedly uncovered in the past, with companies giving the impression that they are more environmentally friendly than they actually are. It is therefore not surprising that consumers are justifiably skeptical.
In future, the legal and practical conditions will change as a result of the EmpCo Directive (Empowering Consumers for the Green Transition) and the Green Claims Directive. Both directives aim to strengthen consumer protection and improve legal certainty with regard to environmental claims within the EU. The EmpCo Directive acts as a general law in the interaction between the two directives. It extends the Unfair Commercial Practices Directive (UCP Directive) to include provisions on environmental claims. As a special law, the Green Claims Directive places special requirements on certain environmental claims.
The Green Claims Directive
In March 2023, the European Commission proposed common criteria to ensure that environmental claims are reliable, comparable and verifiable across the EU. All companies that make voluntary disclosures about the environmental impacts, aspects or performance of their products, services or the company itself must comply with the Directive. The aim is to create transparency and give consumers the opportunity to make informed purchasing decisions. The proposal also contains rules for private environmental labeling systems to reduce the flood of environmental labels.
What does this mean in concrete terms for companies?
According to the Commission’s proposal, companies wishing to advertise with an environmental claim must comply with certain minimum standards. It is important that the information provided can be substantiated by scientific findings. Companies must also submit all information to an accredited auditing body before using their environmental claims to ensure their accuracy. Advertising claims or labels that make a blanket assessment of the overall environmental impact of a product will no longer be permitted in future, unless this is expressly provided for in EU regulations. The only exceptions to the regulations and obligations of this directive are micro-enterprises that have fewer than ten employees and whose annual turnover does not exceed two million euros. For all other companies, violations of the directive are subject to sanctions. The sanctions include, for example, fines or the skimming off of profits made with the products concerned. Environmental labeling systems are also affected by the Green Claims Directive. In future, new public labeling systems may only be approved if they have been developed at EU level. Private systems must obtain approval before their introduction and prove that their environmental targets are more ambitious than the existing systems.
The other side of the coin
The Chamber of Industry and Commerce has voiced justified criticism of the current proposal for the Green Claims Directive. She emphasizes that the obligation for companies to substantiate every sustainability-related advertising claim with scientific reports and to have these reports certified will result in considerable costs. This financial burden could lead to small and medium-sized companies in particular no longer being able to afford such advertising claims and being cut off from the opportunity to communicate their sustainability efforts. Even for large companies, there are doubts as to whether the high costs and associated risks in the form of potentially high fines are justified, as they fear making mistakes and being fined. Ultimately, advertising with environmental claims will be made so difficult that companies may be deterred from publicizing the environmental benefits of their products and services. This in turn could lead to consumers no longer being sufficiently informed about the environmental impact. There is therefore a fear that companies will increasingly tend not to communicate their commitment publicly and avoid making environmental statements, which is known as “greenhushing”.
When will the time come?
The directive is currently in the European legislative process. The draft is to be negotiated in the European Parliament in March 2024. Once the directive has been adopted at European level, the member states, including Germany, have 18 months to transpose it into national law. After a further six-month transitional period, it will finally come into force.
Sources:
- https://www.europarl.europa.eu/RegData/etudes/BRIE/2023/753958/EPRS_BRI(2023)753958_EN.pdf
- https://www.bnw-bundesverband.de/faq-green-claims-directive
- https://www.dihk.de/de/green-claims-eu-kommission-veroeffentlicht-gemeinsame-kriterien-gegen-gruenfaerberei-und-irrefuehrende-umweltaussagen-94812
- https://www.bihk.de/fileadmin/eigene_dateien/bihk/PDF/dihk-stellungnahme-green-claims-richtlinie-data.pdf
- https://lrz.legal/de/lrz/empowering-consumers-richtlinie-und-green-claims-richtlinie-das-ende-des-greenwashings
