The second proposal published on March 22 by the European Commission was for a new Green Claims Directive (COM/2023/166 final - Directive on substantiation and communication of explicit environmental claims).
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The proposal addresses:
- Explicit environmental/green claims (Article 2(1) and (2))
- Comment 1: This proposal does not contain an independent definition of an environmental claim. It refers here to another proposed Directive (empowering consumers for the green transition through better protection against unfair practices and better information - COM/2022/143 final), which suggested amending Unfair Commercial Practices Directive by adding this definition in its Article 2(o). Empowering Consumers for the Green Transition Directive was proposed a year ago by the Commission but still awaits approval by the Parliament. If it is adopted then environmental claims will be defined as: "any message or representation, which is not mandatory under Union law or national law, including text, pictorial, graphic or symbolic representation, in any form, including labels, brand names, company names or product names, in the context of a commercial communication, which states or implies that a product or trader has a positive or no impact on the environment or is less damaging to the environment than other products or traders, respectively, or has improved their impact over time". We are still awaiting the introduction of this definition, which aims to already prohibit the use of generic environmental claims like 'eco-friendly' or 'green'.
- Comment 2: The above is a very broad definition, but the new proposal aims only to apply to explicit environmental claims. This would be 'an environmental claim that is in textual form or contained in an environmental label'. The explicitness is then related to the form in which the claim is being made, rather than its content. Whilst this test will be easier to apply, providing more legal certainty, it is unclear why, for example, a graphic symbol (logo) on an environmental label will be more explicit than in a company name. This notion also leaves unaddressed overall (misleading) impression of many messages as presenting 'environmentally-friendly' products, e.g. by the communication using green-themed colours and images.
- Substantiation of claims (Article 3)
- Comment 1: One of the recognised issues with greenwashing is the lack of common standards on substantiation of environmental claims. The Commission introduces now various guidelines (para 1), which traders are supposed to follow whilst assessing whether their claims are substantiated and could be communicated. This assessment focuses on the life-cycle of a product, seemingly limiting the option to make green claims related to only part of the product/production process. Additionally, when there is lack of harmonisation in applying the guidelines that creates obstacles for the functioning of the internal market, the Commission reserves the right to adopt delegated acts (paras 4 and 5) further specifying, e.g. materials or processes that contribute or cannot contribute to relevant environmental impacts. Considering the so-far observed lack of harmonisation, we may have expected the proposal to already include some of these further specifications, e.g. in the form of a black list of green claims. Already, the European Environmental Bureau (EEB) commented on the regrettable 'lack of a clear ban on carbon neutral claims and on the use of green claims on products that contain hazardous chemicals' (see here). Similarly, also BEUC called for an outright ban of such misleading claims (see here). Although going forward, it makes sense for the Commission to reserve the right to act quickly on improving the market practices across the EU on substantiating green claims.
- Comment 2: To minimise the information cost for microenterprises, the proposal does not require them to follow the substantiation of claims process, unless they intend to have their green claims verified and certified. This would then be the choice of microenterprises, i.e. whether to follow the procedure from the proposal in light of any expected benefits from certification outweighing its costs.
- Communication of claims (Article 5)
- Comment 1: Green claims communicated to consumers are not only to be substantiated following the set requirements (incl. reliance on scientific evidence), but also be significant from a life-cycle perspective of a product. This should limit the amount of green claims used by traders, introducing more transparency and minimising the potential for misleading consumers.
- Comment 2: Consumers should receive information on how to use the product to achieve its expected environmental performance, where the product use influences environmental impacts (e.g. waste sorting, use patterns impacting product longevity - Recital 34). This information should accompany the claim and could allow consumers (as well as competitors and enforcers) to easier assess the veracity of the claim.
- Comment 3: There are additional rules specifying how green claims are to be communicated. Any claim related to future environmental performance (e.g. traders joining initiatives that will improve circularity of their products) should include a time-bound commitment for improvements of trader's operations and value chains, rather than rely on overall offsetting of negative environmental impacts, not only following from traders' own actions (Recital 35). This aims to counteract confusing climate-related claims, but as noted by the BEUC and the EEB will not be as effective as an outright prohibition of such claims. Para 6 specifies in detail what substantiating information should accompany a green claim and how it should be made available to consumers. There is a question here as to the impact that this detailed information may have on consumers' attentiveness and understanding thereof, as well as to the feasibility of placing all this information on product packaging.
- Environmental labelling (Article 8)
- Comment 1: To limit the proliferation of environmental labels, para 3 prohibits further adoption of national or regional environmental labelling schemes. Previously existing labelling schemes may continue their operation in the EU, provided they are in compliance with the proposal. New environmental labels awarded in third countries will require approval of the Commission prior to products carrying them entering the EU market (para 4). Details of all these approval processes are still to be determined.
- Comment 2: The proposal addresses also the issue of private environmental labelling schemes. These may only exist if they 'provide added value in terms of their environmental ambition' compared to existing EU, national and regional schemes, and if they are compliant with the proposal. This suggests that the new proposed private environmental labelling schemes will not be able to simply replicate environmental assessments already conducted by other available labelling scheme providers.
- Verification of claims (Articles 10-11)
- Comment 1: It is up to the Member States to set up procedures allowing for the green claims' verification. This means that the verification process will vary across the EU, in costs and procedure. However, it will need to take place before the green claim is communicated to consumers. Any self-certified environmental labels will constitute an unfair commercial practice (Recital 42). This suggests that traders will not be made able to make environmental claims spontaneously.
- Comment 2: Verifiers will be accredited third-party conformity assessment bodies, independent from traders or products whose green claims they are assessing. They will issue a certificate of conformity, where appropriate, upon verifying the claim. This certificate is not, however, guiding for the assessment of the environmental claim by authorities or courts. The proposal does not address the issue of the liability of verifiers for incorrectly verifying/certifying certain claims.
It excludes from its scope:
- Claims covered by existing EU rules
- Comment 1: The proposal contains a long list of already binding EU rules that address various aspects of traders making environmental claims, such as the EU Ecolabel, the organic food logo, energy labelling, ecodesign requirements. It also anticipates, in its Article 1(2)(p), the adoption of future EU rules further addressing explicit green claims and excludes them a priori from its scope of application (e.g. the forthcoming 'Count Emissions EU', see Recital 13). Whilst from the legislative perspective this solution is the easiest to implement, it may not provide the necessary transparency in the market. For consumers and traders both, it will be handy to have comprehensive graphs/illustrations/tables prepared outlining which rules apply to which products or claims, what the main differences are in these.
The proposal aims to provide more details related to enforcing the UCPD against unfair environmental claims of traders. It also foresees that consumer organisations will be able to act on the Representative Actions Directive in enforcing collective consumer interests in having access to non-misleading green claims (Article 24). The sanctions that traders could expect for making unsubstantiated green claims may be severe: up to 4% of profits, confiscation of profits and a ban from public procurement contracts, access to public funding for up to 12 months (Article 17).
