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The European Green deal aims to ensure that the European Union is climate neutral by 2050. To accelerate the sustainable transformation, the Circular Economy Action Plan was created. As part of this plan, a proposal for the Green Claims Directive was published early this year. But what exactly does this proposed directive entail?
The Green Claims Directive proposal has been published along with a proposal for legislation related to product repair. The proposal is part of the third circular economy package. The Green Claims Directive aims to combat and limit misleading and unfounded voluntary environmental claims and eco-labels. In this way, the European Commission (EC) hopes to prevent companies from pretending to be more sustainable than they actually are (greenwashing).
The rules in the proposed directive apply to voluntary explicit environmental claims. This includes all claims in textual form. It also includes eco-labels that communicate the environmental performance of products or companies, such as PlanetProof, Aquaculture Stewardship Council and Rain Forest Alliance.
Currently, environmental claims are covered by a number of general laws, such as the Unfair Commercial Practices Directive 2005/29/EC and Food Information Regulation 1169/2011. However, specific EU legislation for environmental claims is lacking, but this is likely to change.
The new directive contains several rules with which environmental claims must comply. There is no specific fixed standard method that can be used to substantiate each environmental claim. According to the EC, such a standard method cannot be applied to all product groups. The EC has therefore opted to establish a set of minimum requirements to improve the transparency and reliability of all claims. Below we explain the most important 5 minimum requirements.
Central to the Green Claims Directive is that the environmental impact in an environmental claim must be substantiated through recognized scientific methods. In addition, the claimed environmental impact must be significant in relation to the entire life cycle of the product or company. This means that claims about minor environmental benefits are no longer allowed. Furthermore, it must be clear whether the claim applies to the entire product/service or just a specific part. Finally, claims about customary items and/or mandatory legal requirements are not allowed. This may in fact give consumers a wrong impression about other products.
The proposal also contains some rules for concrete types of environmental claims. For example, aggregate scores may henceforth be used only if they are based on a method developed at European Union (EU) level. Think for example of traffic light labels where the different colors reflect the degree of environmental impact. Furthermore, the proposal states that from now on companies must be transparent in their CO2 neutral claims. The claim must clearly state which part of the claim applies to their own activities and which part is about investing in CO2 compensation projects. In addition, there are certain requirements attached to these CO2 offsetting projects regarding, for example, the integrity and calculation of the offsetting.
Claims that communicate future environmental performance will also be addressed more strictly. Henceforth, such claims must be based primarily on time-based improvements within the product or merchant's own operations and supply chain as opposed to offsetting greenhouse gas emissions or other environmental impacts. Such future environmental claims must also comply with all other rules applicable to environmental claims in the proposal.
Furthermore, a number of rules have been established regarding claims that compare the environmental impact of two different products or services. For example, the data used to compare environmental aspects or environmental presentations must be comparable. For example, if different methods were used to obtain the data, the comparison may be unfair. Also, the data must be obtained in the same way and only significant parts of the life cycle may be compared. For example, if product X only scores better than product Y with respect to the environmental impact of the packaging material while Y scores better in more significant parts of the life cycle, this may give consumers a false picture.
Environmental labels, in addition to the requirements for environmental claims, also face specific rules in the proposal. These requirements mainly concern the decision-making body behind these labels. Consider, for example, verification by independent third parties. In addition, new private party labels must receive approval from national/public authorities before they can be used on the EU market. The assessment looks at the added value of the label compared to already existing labels. Finally, public authorities or Member States are no longer allowed to introduce new labels themselves. However, they can apply to the EC to do so.
Adoption of the proposal will add a number of responsibilities to the member states. For example, member states will be made responsible for establishing verification and enforcement procedures to be performed by independent and accredited verifiers. These procedures must be consistent with the proposed Green Claims Directive. In the Netherlands, the Consumer and Market Authority (ACM) is tasked with overseeing environmental claims, among other things. The ACM has already published a Guideline on Sustainability Claims, which includes environmental claims, in 2021. Recently, ACM published an update of this Guideline. Many aspects of the Green Claims Directive are already present in this Guideline.
The Dutch cabinet supports better regulation of environmental claims at the EU level. Nevertheless, the Cabinet also sees a number of obstacles regarding the proposal. Because it concerns a directive and not a regulation, the government is afraid that different national interpretations and interpretations will lead to different procedures in individual EU countries. Combined with the fact that the certification of an environmental claim will be mutually recognized in EU countries, the government expects that companies will then have claims verified in the EU country with the least strict procedure. This could then result in an uneven playing field and fragmentation of the EU internal market. In addition, the government also fears that companies are more likely to choose not to communicate the environmental impact of their product or service since such claims are voluntary anyway and certification is expensive.
The Green Claims Directive proposal is not yet final and must still be approved by the European Parliament and the Council of Ministers. If the proposal is adopted, companies that want to use environmental claims for their products or services will have to start looking closely at the environmental impact of their product or service. Companies must also be able to substantiate this environmental impact before they can communicate about it.
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