When adopted, the EU Green Claims Directive will become a binding legislative act that affects all countries in the European Union (EU). Member States will have a defined period to transpose the Directive into their own laws and define how they will reach these goals to stop greenwashing.
Overview of the Green Claims Directive
What does it mean?
The EU Green Deal, published in 2019, states that “Companies making green claims should substantiate these against a standard methodology to assess their impact on the environment”. This regulation set to crackdown on greenwashing is proposed as the EU Green Claims Directive.
Via the Circular Economy Action Plan (CEAP), the Commission announced a legislative proposal to require environmental claims to be substantiated, and the recommendation is to use the Product & Organisation Environmental Footprint methodologies (PEF & OEF) for calculating the emissions. This initiative will be developed in close coordination with other initiatives such as the Empowering the Consumers in Green Transition Initiative and the Sustainable Product Policy Initiative.
What are the critical dates to remember?
- The Green Claims Directive was proposed in March 2023.
- When it is adopted by the EU Parliament and EU Council, Member States will have 2 years to transpose the Directive into their national legislation. The exact date of when the obligations will become mandatory is not known, however it is recommended for the brands to start complying with the obligations as soon as possible to be prepared while the national legislation will be introduced.
Who is impacted?
It will impact businesses that make environmental claims about their products or services in the European Union (EU) market. The proposed Directive applies to any type of environmental claim, regardless of the medium or platform used to communicate it, including statements, symbols, or graphics that suggest a product or service has environmental benefits.
The proposed Directive will have implications for businesses across different sectors, including manufacturing, retail, and services, and will apply to both business-to-consumer and business-to-business transactions. It will also apply to eco-labels and other environmental product certifications.
Objectives
- Ensuring the accuracy and reliability of environmental claims made by businesses in the EU market:
The proposed Directive seeks to promote consumer trust in environmental claims by requiring businesses to substantiate their claims with scientific evidence, verified by an independent party, and to avoid using vague, ambiguous, or misleading language. - Encouraging more sustainable consumption patterns:
By promoting the use of accurate and reliable environmental claims, the Directive aims to encourage consumers to make more informed and sustainable purchasing decisions. - Facilitating the operation of the internal market:
The proposed Directive aims to harmonize the rules on environmental claims across the EU, reducing barriers to trade and facilitating the free movement of goods and services within the internal market. - Supporting the development of environmental labelling schemes:
The Directive provides a framework for the development and recognition of eco-labels and other environmental product certifications, promoting their use and ensuring their consistency across the EU. - Strengthening the role of national authorities in enforcing environmental legislation:
The proposed Directive requires Member States to designate competent authorities responsible for enforcing its provisions and provides for penalties in case of non-compliance, ensuring the effectiveness of the enforcement mechanisms.
Requirements
Substantiation of claims:
Businesses making environmental claims in their commercial communications must be able to substantiate these claims with scientific evidence, that is widely recognized, identifying the relevant environmental impacts and any trade-offs between them. (Article 3(1)(b)).
Businesses making green claims are required to have their green claims verified and certified as compliant by an officially accredited body before they are communicated. Member States will be responsible for setting up those independent and accredited verifiers. Certification would provide companies with certainty that their claims would then not be challenged by any Member State competent authorities.
Transparency and clarity:
Environmental claims must be presented in a clear and easily understandable manner, avoiding vague or ambiguous language.
Specific and relevant:
Environmental claims must relate to specific environmental benefits, avoiding general and non-specific claims.
Avoidance of misleading practices:
Businesses must not engage in any practices that could mislead consumers regarding the environmental characteristics or impact of their products or services.
Compliance with recognized environmental standards:
Businesses may use eco-labels and other environmental product certifications, provided that they are recognized and comply with the requirements set out in the Directive (Article 3,6 and 7).
The Proposal provides stricter regulation of environmental labelling schemes, including third country labelling schemes. It means that new environmental labelling schemes established by public authorities in third countries (e.g. the US) need to be approved by the European Commission before they can enter the EU market.
Cooperation with competent authorities:
Businesses must cooperate with competent authorities designated by Member States in the enforcement of the Directive and provide the relevant information upon request.
The role of the Verifier under the directive
According to Article 11 of the Proposal, the "verifier" will be a third-party conformity assessment body accredited by the national accreditation body, and this accreditation will need to specifically cover compliance with requirements provided by the Directive.
The verifier must:
- be independent from the product or trader associated with the environmental claim,
- possess the necessary expertise, equipment, and infrastructure to perform verification activities,
- have an adequate number of qualified and experienced personnel to carry out verification tasks.
Methodology to Back Up Green Claims
While the EU recommends implementing the Product Environmental Footprint (PEF) methodology, each Member State has agency to decide whether to impose a common methodology(ies) to substantiate green claims. If the common method is imposed, then existing calculators might have to be aligned with the common methodology. The database that would be the basis for the common methodology could also be regulated and adjusted accordingly.
One of the methodologies most likely to be chosen, if a common one is chosen, is the PEF Methodology. It covers 16 impact categories including climate change, resource use, minerals and metals, freshwaters, human toxicity etc. Green claims that do not fall under the 16 categories, will be addressed by another legislation: Empowering the Consumers for Green Transition.
Consequences
- Member States will be required to ensure effective enforcement of these legal obligations through the designation of competent authorities and the provision of effective and dissuasive penalties in case of non-compliance.
- In case of non-compliance with legislation the brands may expect to
receive a notification. Upon receiving a notification, companies have a 10-day deadline to respond, and if their response is unsatisfactory or not timely, they will be required to correct the claim or cease its communication without delay. The current proposal suggests extending the period for making the necessary changes to 30 business days. - Additionally, the proposal intends to permit third-party complaints that could result in legal proceedings.
Risk Mitigation
To ensure that their green claims comply with the EU Green Claims Directive, brands need to ensure that they have scientific evidence to back them up and to ensure that the necessary documentation is available upon request.
Brands need to ensure that they use clear and precise ways of communicating green claims to avoid misinterpretation and are also responsible for ensuring third party information they are using to be in line with the directive.
How TrusTrace can help
TrusTrace’s Certified Material Compliance solution automatically provides evidence by helping brands reconcile their purchase orders with information coming from the supply chain. We automatically calculate the exact amount of certified material present in a product, can upload relevant documents on facility or material or product level.
Book a demo to find out more about how TrusTrace can support you with substantiating green claims to meet incoming EU marketing and labeling regulations.
