EU proposed new Directive for Green Claims: Everything you need to know
In March 2023 the EU proposed a new Directive for Green Claims, which brings together new guidance around environmental labelling for brands. This will undoubtedly have a significant impact on substantiating and communicating environmental claims for companies operating within the EU, and connected markets like the UK. In this article we will guide you through how this may impact your business and the key takeaways from the proposal.
Key Objectives of the Proposal
- Increase environmental protection and help accelerate the EU’s green transition;
- Protect consumers (and companies) from greenwashing and enable them to make informed purchasing decisions;
- Improve legal certainty regarding environmental claims and boost the competitiveness of companies making efforts to increase the environmental sustainability of their products and activities.
The 2 overarching policy options include:
- Prohibition of environmental claims that do not fulfil a minimum set of criteria.
- Prohibition of sustainability labels not meeting minimum transparency and credibility requirements.
How would it work in practice?
It is ultimately at the discretion of EU Member States to implement the various requirements of the Directive, as well as define how companies should be penalised if they fail to meet these requirements. Suggestions for penalties (see Article 17) include fines, revenue confiscation, and temporary exclusion from public funding.
What evidence does the EU Commission provide for proposing this Directive?
In 2020, the EU Commission assessed 150 green claims, finding that 53.3% of them provided “vague, misleading or unfounded information” about a product’s environmental impact. Furthermore, 40% were “unsubstantiated, based on clarity, accuracy, and verifiable evidence”.
The Consumer Protection Cooperation authorities carried out a similar assessment in 2020. They found the following:
- Over half (57.5%) of 344 sustainability claims did not provide sufficient elements allowing for judgement of the claim’s accuracy.
- In half of cases, there was difficulty identifying whether the claim covered the whole product.
- In 36% of cases, it was unclear whether it referred to the company or certain products.
- In 75% of cases, it was unclear which stage of the product’s life cycle it covered.
Looking more specifically at active ecolabels in the EU, it was concluded that in almost half of cases (out of 232 labels), verification was either weak or not carried out. And consumers struggled to distinguish between labels governed by a third party, and those based on “self-certifications”. Interestingly, 27% of participants also agreed that “the proliferation and/or lack of transparency / understanding / reliability of sustainability logos/labels on products and services” is an obstacle to empowering consumers.
The promise of standardisation by the proposed EU Directive is therefore much needed, and Foodsteps will strive to remain ahead of the curve.
Which Articles of the Directive are likely to be most significant for companies?
Articles 3 to 6 largely reinforce the guidance laid out in the Green Claims Code, with regard to substantiating and communicating both explicit and comparative environmental claims.
However, it’s still worth going into a bit more detail.
Articles 3 and 4 - Substantiation of explicit and comparative environmental claims.
Member States shall ensure that companies carry out an assessment to substantiate their environmental claims. This includes, but isn’t limited to the following:
- Specify which part of the product or activity the claim is related to;
- Rely on widely recognised scientific evidence, and account for relevant international standards;
- Ensure aspects mentioned in the claim are significant from a life-cycle perspective;
- Ensure aspects highlighted in the claim are not merely requirements imposed by law;
- Separate any offsets as additional environmental information, and how they relate to emission reductions or removals, and ensure they are accounted for correctly;
- Include primary information available;
- Include relevant secondary information which is representative of the specific value chain.
- Information and method of assessment used to compare two products or companies must be equivalent.
Articles 5 and 6 - Communication of explicit and comparative environmental claims
- Claims must include necessary information on how the consumer should use the product in order to achieve the expected environmental performance.
- Where the claim relates to future environmental performance, it shall include a time-bound commitment.
- Claims on the impacts of a product based on an aggregated indicator must be based on rules established in the Union law.
- Information that is the subject of the claim and the substantiation shall be made available either in a physical form or via a weblink/QR code. (See p.48 for more detail).
- Comparative claims should not be made when the competing product or company is no longer active on the market. Unless they are based on evidence proving the improvement is significant, and has been achieved in the last five years.
Article 7 and 8 - Environmental labels and requirements for environmental labelling schemes
Note: Articles 7 and 8 build on guidance laid out in the UK Green Claims Code, by extending to environmental labelling as a form of sustainability claim. This information is more relevant to the environmental label provider, who must ensure that labels (as well as the labelling scheme generally) comply with requirements.
- Only environmental labels awarded under environmental labelling schemes - certification that a product or company complies with labelling requirements - established under Union law may present an environmental impacts rating or score.
- Environmental labelling schemes must comply with the following requirements: Information on ownership and decision-making bodies associated with the scheme is transparent, accessible, easy-to-understand, and sufficiently detailed.
- Objectives of the scheme, and requirements and procedures to monitor compliance are transparent, accessible, easy-to-understand, and sufficiently detailed;
- Conditions for joining the scheme are proportionate to the size and turnover of the companies;
- Requirements have been developed by experts that can ensure their scientific robustness and have been submitted for consultation to a heterogeneous group of stakeholders for review.
- See pages 49-51 for further details on requirements for establishing an environmental labelling scheme.)
This could seen as a chunk of and overwhelming at first, but there are services out there which can help you reach your sustainable goals and communicate them effectively. Foodsteps already takes out a lot of the groundwork. Our carbon footprint data and labels are methodologically robust, and our services can help you and your customers make sustainable food decisions through substantiated (data backed) labels.
Ready to start your sustainable food journey? Foodsteps can help your sustainable food claims be compliant from the outset, get in touch with our Onboarding Manager.