Have you heard about greenwashing? Naming a product or organisation sustainable, while this isn't true. This is misleading consumers and other stakeholders. In order to prevent greenwashing, and regulate green claims made by companies, the European Union proposed the Green Claims Directive (GCD). The GCD is an initiative on substantiating green claims, by obliging companies to stack their sustainability claims up with evidence. Facts and figures, or data-driven sustainability as we call it at Hedgehog Company.
Let's provide some context
As a consumer, deciding on what product to buy in the supermarket isn’t easy. You have your favourite brands, obviously, but what about sustainability? Do you take this aspect into account here as welll? When provided with the choice between two products, and one claims to be sustainable, nowadays more and more consumers opt for the sustainable product. But can you really trust these so-called green claims?
This increasing awareness is also evident for business, where producing sustainable products is increasingly becoming economically interesting. Hence, a lot of companies start to actively communicate about their sustainability efforts. However, soon companies cannot just say anything. An initiative is underway on substantiating green claims; the Green Claims Directive.
This directive is needed, because according to the European Commission (2020):
- 53% of green claims give vague, misleading or unfounded information
- 40% of claims have no supporting evidence
- Half of all green labels offer weak or non-existent verification
- Sustainability labels are not clear: there are 230 sustainability labels and 100 green energy labels in the EU, with vastly different levels of transparency
What is the Green Claim Directive?
The Green Claims Directive (GCD) is a regulation proposed by the EU and it's aim is to establish clear and consistent rules for environmental claims made by companies. The directive covers a range of topics such as carbon footprint, recyclability, and biodegradability.
The European Commision adopted the proposal for the Green Claims Directive in march 2023, and in the summer of 2024 there will be a next crucial voting moment about the directive. From there onwards, Member States will have 18 months to put laws and regulations in place and 24 months after the directive's effective date to enforce these rules.
The proposal on green claims aims to
- make green claims reliable, comparable and verifiable across the EU
- protect consumers from greenwashing
- contribute to creating a circular and green EU economy by enabling consumers to make informed purchasing decisions
- help establish a level playing field when it comes to environmental performance of products
In order to reach these goals, the GCD requires companies to provide:
- Scientific evidence to support their claims
- Ensure that the claims are accurate, verifiable, and not misleading
- Green labels should be based on established certification schemes
The Green Claims Directive would also establish a standardized system of labelling that would allow consumers to easily understand the environmental impact of a product or service. The labelling system would be based on a set of criteria developed by the EU, and companies would need to meet these criteria to be eligible for the label.
In addition to regulating environmental claims made by companies, the Green Claims Directive would also establish penalties for companies that violate the regulations. Companies found to be making false or misleading claims could face fines or legal action.
What are green claims?
Just as some brands claim their product is ‘sugar-free’ or ‘made of certified (FSC) wood’, they can also make claims on sustainability. Claims on the environmental performance of products are called green claims.
It's important to be cautious with green claims communicated by brands. This is because they can be misleading or exaggerate the environmental benefits of their products. To ensure that a product is truly environmentally friendly, look for third-party certifications and do research on the brand's sustainability practices. Vague or dubious statements, for example, could indicate greenwashing.
A few examples:
- "Eco-friendly" or "sustainable" products: Many brands claim that their products are eco-friendly or sustainable, but these claims are not always substantiated. Such claims are really generic and make the product seem to be more environmentally friendly than they actually are.
Real example: H&M adopting ‘green’ clothing line Conscious Clothing, turning out to be not so conscious.
- "Green" packaging: Some brands claim that their packaging is made from recycled or sustainable material. However, the overall environmental impact of packaging goes beyond just the materials used, and brands may not consider other factors like energy usage in manufacturing or transportation.
- "Carbon-neutral" or "carbon-offset" products: Some brands claim that their products are carbon-neutral or carbon-offset, meaning that they have offset the greenhouse gas emissions generated by their production or transportation. However, the effectiveness of some carbon offset programs is disputed, and it allows companies to keep doing business as usual.
Real example: Shell rebranding as contributor to green transition, but in fact most of the investments go to fossil fuels.
- "Natural" or "organic" ingredients: Brands may use terms like "natural" or "organic" to imply that their products are safer or better for the environment. However, these terms are not regulated and can be used in misleading ways. Additionally, natural or organic ingredients are not necessarily always better for the environment, as they may require more land, water, or energy.
Greenwashing and the Green Claims Directive
Greenwashing is a term used to describe the practice of companies making false or misleading claims about the environmental benefits of their products. Looking at the previous examples, companies often make exaggerated or vague (or sometimes even false) claims about their product’s sustainability. They do this in order to make their products seem more sustainable than they actually are.
Greenwashing is problematic since it can mislead consumers into thinking they are making environmentally responsible choices, when in fact they are not. It can also undermine the efforts of companies that are genuinely committed to sustainability by making it harder for consumers to distinguish which products and practices are truly environmentally friendly.
Benefits of the Green Claims Directive
There are a lot of benefits to be expected from the Green Claims Directive.
For consumers:
- Ensure that reliable, comparable, and verifiable environmental information about products is accessible to everyone.
- Make environmental labels and claims credible and trustworthy.
- Enable consumers to make better-informed purchasing decisions and contribute to the green transition.
- Halt the proliferation of environmental labels.
And for businesses:
- Establish a common approach for green claims across the EU, allowing companies to compete on a level playing extent.
- Enhance the competitiveness of economic operators who work to increase the environmental sustainability of their products and activities.
- Boost the credibility of EU businesses engaged in cross-border trade within the EU.
- Generate increased demand for greener products and solutions.
How to prepare for the Green Claims Directive
In order to avoid penalties for making false or misleading claims, here are some steps that you can take to prepare for the GCD and make trrue sustainable claims:
- Review and revise current claims. Review your current environmental claims and assess whether they comply with the Green Claims Directive.
- Use established standards. Use established environmental standards, such as ISO, when making environmental claims. These standards provide clear guidelines for measuring and reporting on environmental impacts, and are more likely to be accepted by regulators.
Life cycle assessments (LCA) and carbon footprints are established methods that measure the environmental footprints of products. These methods are based on standards like ISO 14040, 14044 and 14067. Need help? We are here to guide you. - Provide clear evidence. Substantiate every claim, by including data on energy usage, greenhouse gas emissions, and waste reduction, as well as third-party certifications or audits.
Evidence comes in many forms. Methods like LCA and carbon footprints come in standardized reports. Furthermore, an Environmental Product Declaration (EPD) can be developed, following ISO 14025. This is an official document that disclosed your product’s environmental footprint.
How is the Green Claims Directive enforced?
In the proposal for the Green Claims Directive, in article 16, the European Commission writes directions on how to enforce on the GCD. Natural or legal persons or organisations, recognized by Union or national law as having a legitimate interest, are entitled to lodge substantiated complaints with the competent authorities if they believe that a trader is not adhering to the provisions of this Directive.
For the intent of this clause, non-governmental entities or organisations that advocate for human health, environmental or consumer protection and meet national legal requirements are considered to have a sufficient interest.
The competent authorities must inform the complainant of their decision to either accept or reject the request for action as soon as possible and, at any rate, in accordance with the pertinent national law provisions.
Member States are required to guarantee that individuals or organisations filing a substantiated complaint have access to a court or another independent and impartial public body capable of reviewing the procedural and substantive legality of the decisions, actions, or inactions of the competent authority under this Directive.
You can download the proposal for the Green Claims Directive below this article. Here you can read all official information to know more on the GCD.
Bigger context; The Green Deal
The green claims proposal is part of the bigger sustainability context of The Green Deal. This is the European Ambition to be, as the first continent, Climate Neutral in 2050. In this context, the GCD is closely linked to the following other legislations of empowering consumers for the green transition, ecodesign for sustainable products the farm to fork strategy and the related legislative framework for sustainable food systems.
These initiatives aim to create a cohesive policy framework that will guide the EU towards establishing sustainable goods, services, and business models as standard practice. Their goal is to drastically reduce the environmental impact of products consumed within the EU and support the overarching policy goal of achieving EU climate neutrality by 2050.
