The Green Claims Directive: Are the days of greenwashing finally over?

On January 17, 2024, a milestone was achieved within the European Union as the European Parliament approved the Green Claim Directive. This significant legislation, aimed at fostering consumer empowerment for the green transition, marks a vital step towards enriching the marketplace with transparency, reliability and trust. In this post, we delve into the Directive’s key components, its implications for businesses, and offer guidance on compliance, aligning with Nordic Sustainability’s commitment to actionable insights.

Down to business: What exactly does the Green Claim Directive mean?

Generic environmental terms such as ‘environmentally friendly’, ‘natural’, ‘biodegradable’, and ‘eco’ can be misleading for consumers. By prohibiting the use of unsupported generic environmental claims, the Directive has made its primary goal to end the days of unbackable marketing statements. Similarly, the use of ‘climate neutral’ declarations implying that a product’s environmental impact is neutral, reduced, or even positive due to emissions offsetting programs will be banned. Here is our summary of the five main focus points in the new Directive:

1. Ensure a higher level of consumer protection and empower consumers to make better-informed choices.
2. Ensure that product environmental claims are transparent in terms of reliability, comparability, and verifiability.
3. Fight greenwashing and the use of unreliable and non-transparent environmental claims and labels.
4. Enhance the rights to environmental protection and the improvement of the quality of the environment.

What does the Directive warn us to be aware of when trying to communicate one’s sustainability efforts?

The proposal states it clearly, any statements that cannot be backed by data will not be tolerated. The days of greenwashing are hopefully soon to be over, enabling consumers to make well-informed decisions when wanting to step up their sustainable practices and consumption patterns. In practice this means the environmental claims will have to meet the following minimum criteria:

• Base environmental claims on the most advanced technical knowledge and scientific research available.
• Demonstrate the significance of impacts, aspects, and performance from a life-cycle perspective.
• Holistically assess environmental claims and performance by considering every major factor and impact.
• Demonstrate whether the claim behind the product applies to it as a whole or only certain aspects of it (i.e. for the whole life cycle or only for certain stages, for all the trader’s activities or only a part of them).
• Ensure the environmental claim highlights actions or benefits that exceed what is legally required, rather than merely complying with current regulations.
• Provide information on whether the product performs environmentally significantly better than what is common practice.
• Assess whether a claimed environmental benefit unintentionally causes a considerable negative effect on another aspect, ensuring a holistic view of the claim’s overall impact.
• Report how greenhouse gas emissions are being offset in a concrete and detailed manner to ensure transparency in environmental claims.
• Include accurate primary or secondary data sources.

In essence, companies must undertake thorough assessments of their products to validate environmental claims, and ensure these evaluations are grounded in robust data. Moreover, this Directive demands greater transparency and integrity in marketing, urging business leaders to boldly disclose both their sustainability achievements and areas needing improvement.

What about small and medium-sized enterprises? Are they also included in this Directive?

Certainly! The Directive encompasses small and medium-sized enterprises (SMEs), which does add further regulatory load. To ensure the Directive does not disproportionately benefit financially robust companies alone, SMEunited has been participating in the review phase of the Directive as a key stakeholder, to voice the aforementioned concerns.

SME united advocate for straightforward, practical, and balanced criteria for substantiating environmental claims to level the playing field for SMEs in the EU. Additionally, the role of member states lies within enhancing compliance awareness and supporting SMEs through financial assistance, training, and technical help to ensure that this Directive does not become another regulatory burden, but instead an advantage to promote the great work of SMEs.

As smaller businesses navigate the modules and make choices aligned with their identities, we stand ready to offer guidance, insights, and support. We help you scope and conduct your analysis to ensure that your green claims are aligned with the upcoming regulations and turning it into a narrative of purpose, resilience, and genuine impact management.

Our advice? Get on board with the upcoming regulations, strengthen your analytical toolbox, and ensure robust data quality to back up your external communication!

On a previous blogpost on effective and authentic environmental marketing we stated:

‘we should treat tomorrow’s regulation as today’

This quote proves to be even more relevant now that the wording of the Green Claim Directive has passed approval from the European Parliament and is now only awaiting the final green light from the EU Council. When passed, the Green Claim Directive will be published in the Official Journal of the EU and EU member states will have 24 months to transpose it into their national laws.

The Green Claim Directive represents a transformative leap towards crafting a more transparent marketplace. We encourage all businesses to view the green claim Directive as an enabler for fostering positive change in the business landscape, and an opportunity to showcase genuine commitment to sustainable growth. This isn’t just about meeting standards — it’s about meeting the global shift towards sustainability, making a compelling statement to the world about the kind of future we strive to create.