Lawmakers in the European Parliament voted 467-65 in favor of a set of regulations designed to safeguard consumers against greenwashing, or deceptive environmental assertions by companies. These regulations mandate that companies must undergo verification for product marketing claims such as “biodegradable” or “less polluting” before using them.
The vote solidifies Parliament’s stance on the European Commission’s proposed “Directive on Green Claims.” Introduced in March 2023, the directive aims to address the necessity for reliable and verifiable information for consumers. This need became apparent following a recent study which found that over half of the green claims made by companies in the EU were vague or misleading, with 40% lacking any substantiation.
Parliament’s Internal Market Committee rapporteur Andrus Ansip said:
“Studies show that over 50% of environmental claims are vague, misleading or unfounded. We cannot speak about happy consumers if every other green claim is false. We cannot talk about a level playing field for our entrepreneurs while some traders are cheating.”
The Commission’s proposal outlined minimum requirements for businesses to substantiate, communicate, and verify their green claims. It mandates companies to ensure the reliability of their voluntary environmental assertions through independent verification supported by scientific evidence. The directive also aims to address the proliferation of private environmental labels by requiring them to meet reliability, transparency, independent verification, and regular review criteria. Furthermore, it stipulates that new labels can only be introduced at the EU level and approved if they demonstrate higher environmental standards than existing schemes.
Part of a broader set of consumer-focused environmental and circular economy proposals by the EU Commission, the directive includes updates to the ecodesign regulation and amendments to the EU’s unfair commercial practices directive and consumer rights directive to incorporate green transition and circular economy-related elements, as well as promoting repair rights.
Under Parliament’s adopted position, companies’ green assertions and supporting evidence would undergo assessment within 30 days. Simpler and more common claims would be subject to faster and simpler verification processes. The directive would prohibit green claims solely based on carbon offsetting schemes but would allow companies to mention such schemes in advertisements if they have already minimized emissions and use the schemes only for residual emissions, employing certified and high-integrity carbon credits.
Small and medium-sized enterprises would be granted an additional year to comply with the new regulations, while micro-enterprises would be exempt. The proposed regulation also introduces penalties for non-compliance, including exclusion from public procurements and fines equivalent to at least 4% of annual revenue.
Cyrus Engerer, rapporteur for the Parliament’s Environment Committee, commented:
“It is time to put an end to greenwashing. Our position ends the proliferation of misleading green claims that have deceived consumers for far too long. We will ensure businesses have the right tools to embrace genuine sustainability practices. European consumers want to make sustainable choices; all those offering products or services must guarantee their green claims are scientifically verified.”
March 15, 2024
