The European Commission is set to introduce the Green Claims Directive on March 22, 2023. (GCD). This long-awaited legislation aims to combat greenwashing by regulating how businesses substantiate and communicate their green claims.
Green marketing has proliferated as more than half of EU consumers shop with sustainability in mind: 75% of products on the market carry an implicit or explicit environmental claim. However, a recent European Commission study shows that more than half of green claims are vague, misleading, or unfounded. Furthermore, nearly half of the 230 ecolabels available in the EU have very limited or no verification procedures.
If the Green Claims Directive (GCD) is adopted, it will help to bring order to the wild west market of green advertising and protect EU consumers from misleading claims. Furthermore, for the first time, legislation will require businesses to provide supporting evidence alongside a green claim. “The proliferation of greenwashing is hampering the green transition: it hinders consumers’ ability to make informed sustainable choices and makes it harder for the companies that strive to reduce their environmental impacts to differentiate themselves from free riders, Blanca Morales, Senior Coordinator for EU Ecolabel, European Environmental Bureau (EEB) said.
This law would impose legal obligations on all claims and labels displayed in products, services, or businesses in both physical and online points of sale across the EU single market. The existing regulations, in the form of Product Environmental Footprint (PEF), provide a comprehensive picture of a product’s sustainability. Still, they fail to establish clear rules for EU companies to combat greenwashing.
The new Green Claims Directive is an important piece of the puzzle: the European Commission Sustainable Product Initiative was presented a year ago. While the initial goal was to require companies to substantiate their environmental claims using the PEF method, the Commission has now broadened its scope to regulate all green claims, including those that the PEF does not cover.
The new law should complement the Directive on Empowering Consumers for the Green Transition (ECGT), currently debated in the European Parliament. While the ECGT Directive governs what companies can and cannot do (for example, which claims are considered unfair commercial practices), the GCD governs how they can operate (i.e., which methodologies companies should use to substantiate and communicate their green credentials).
The Green Claims Directive will also supplement the Regulation on Ecodesign for Sustainable Products (ESPR). While the latter establishes mandatory information obligations, the GCD will address voluntary claims. “We need clear EU rules to wipe out greenwashing claims, and we need companies to provide the evidence behind their credentials: no data, no claim”, Blanca Morales mentioned.
