The EU Commission has presented the eagerly awaited proposal for a new Directive for the communication and substantiation of environmental claims (Green Claims Directive). The proposal is set to provide EU-wide, strict uniform minimum criteria for the communication and substantiation of explicit environmental claims (so-called 'green claims'). In order to meet the standards, traders will have to get approval of their green claims from an independent verifier.
The proposal also stipulates that the Member States must ensure that traders face effective, proportionate and dissuasive sanctions. This may include penalties up to 4 % of the trader’s annual turnover in the Member State or Member States concerned. However, the Commission leaves it up to each Member State to decide whether or not to adopt these penalties or use its existing mechanisms under consumer protection law to enforce the provisions of the Directive.
The proposal contains precise guidelines on how traders are allowed to advertise explicit environmental claims. The Commission wants to ensure that advertising claims of positive environmental effects are only made for those products or companies that offer environmental benefits compared to other products or companies.
Advertising environmental benefits would therefore only be permitted if, among other things:
At the heart of the proposal are the regulations on the substantiation of environmental claims. These provisions set out what traders need to assess before making an explicit environmental claim. The EU wants to ensure that claims are only made if they have a demonstrably positive effect on the environment. The proposal therefore stipulates that the impact assessment for the explicit environmental claims must meet the following minimum criteria:
The proposal also provides for criteria on the use of environmental labelling schemes. This is supposed to combat the widespread practice in the market of using a variety of non-transparent and mostly private environmental labels, and to create improved transparency and resilience of the labelling systems. The proposal suggests the following minimum criteria:
A completely new, mandatory step would be that environmental claims will have to be verified by an independent verifier in accordance with the requirements of the Directive before traders are allowed to use them. This would mean that companies would need to obtain approval from this verifier that they meet the requirements of the Directive before using a green claim. If the evidence provided by the trader is sufficient, the verifier would issue an EU-wide certificate stating that the requirements have been met. This will give traders certainty that their advertising claim is compliant in all EU Member States. There will be one independent verifier for each Member State.
Enforcement of the proposal is up to the Member States. They can either choose to adopt the new rules on penalties set out in the Directive or they can instead continue to use the current mechanism in place to combat unfair commercial practices. It will be interesting to see which option Member States select and whether there is consensus on the approach. If a Member State chooses to adopt the enforcement provisions of the proposal, they will have to:
Before the Directive can be transposed into national law by the Member States, it will first have to pass all relevant steps of the regular legislative procedure. This means that both the Council and the European Parliament have to approve it. Once it comes into force, the Member States will have 18 months to transpose the directive into national law and a further six months before the rules are applied. The EU Commission expects a timeline of four years for the Directive to apply.
If the provisions of the Proposal are transposed into national law, this will result in strict requirements and procedures for companies making green claims in their advertising and marketing. On the other hand, businesses will benefit from a harmonised regime rather than having to cope with the current fragmented approach (which you can read about in our selection of articles setting out the current approach to environmental claims across the EU). Once the independent verifier has checked and approved the environmental claims in advance and issued a certificate, compliance will be assured across the EU.
Timothy Pinto looks at recent ASA decisions on greenwashing in the context of the UK's regulatory framework.
2 of 6 Insights
Andreas Bauer looks at rules around making carbon neutral claims and analyses recent German case law.
3 of 6 Insights
Marc Schuler and Hugo Khalfallaoui look at the regulatory approach to greenwashing in France.
4 of 6 Insights
Margot van Gerwen and Nick Strous look at the new Dutch Sustainability Advertising Code.
5 of 6 Insights
Martin Prohaska-Marchried and Martina Stranzinger provide the top 15 points for marketers to consider when making green claims in advertising in Austria.
6 of 6 Insights