EU Proposes New Legislation on Green Claims to Stop Greenwashing

Greenwashing must be addressed immediately. According to the European Commission, the EU has 230 green or sustainability designations, such as “100% ECO”, “Green”, and “ECO FRIENDLY”. These labels have made it hard for customers to assess product and company environmental performance. Unfortunately, the Commission found that 53.3% of green claims are unclear, deceptive, or baseless, and 40% lack supporting evidence, resulting in low consumer trust.

On March 22, 2023, the EU proposed a new law to make green claims reliable, comparable, and verifiable across the EU to help consumers make informed purchases, level the playing field for companies that sell truly sustainable products, and achieve the European Great Deal. The proposal covers any explicit environmental claims made by traders concerning products or commercial practices, whether in text or labelling. EU Ecolabel and organic food logo claims are exempted.

Elements of the Proposal

1. Traders must substantiate and communicate explicit environmental claims.

• Traders must carry out an assessment to substantiate explicit environmental claims. The assessment should clarify whether the claim relates to the product or the trader’s activities, display the environmental impacts, aspects, or performance subject to the claim that are significant from a life-cycle perspective, etc.
• To achieve the assessment, the traders shall adopt widely recognized scientific evidence while considering international standards.
• Regarding the way of communication, one important requirement is—information such as the environmental impacts, aspects or performance covered by the claim, the underlying studies or calculations for assessment, etc. shall be available in physical form or electronic form such as weblink, QR code, etc.
• Requirements for the substantiation and communication of comparative environmental claims, which state that a product or trader has fewer environmental impacts or better environmental performance than others, are also detailed.

2. Procedures will be established to verify the substantiation and communication of explicit environmental claims.

• Member states must establish procedures to verify the substantiation and communication of explicit environmental claims.
• A verifier, who is a qualified third-party conformity assessment body, must undertake the verification independently, professionally, and fairly, before the environmental claim is made public or the environmental label is displayed by the trader.
• After completing the verification, the verifier will issue a certificate of conformity, which will be recognized by competent authorities.

3. Environmental labeling schemes will be under control.

The scheme restricted new environmental labelling methods to prevent their proliferation. For instance, only the EU can create new public labelling schemes. New environmental labelling schemes from third countries must be approved by the Commission before entering the EU market.

4. Other measures include:

• Measures will be adopted to help small and medium enterprises implement this Directive.
• Penalties shall be formulated to include measures such as fines, confiscation of involved revenues, etc.