New EU Directive on Greenwashing: Everything you need to know

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In recent years, there has been a concerning trend of companies using environmental labels and sustainability claims as mere marketing tools to sway consumers into believing their products contribute to a greener world. In response to these greenwashing activities, the EU has enacted the Empowering Consumers for the Green Transition Directive (Directive (EU) 2024/825).

This directive aims to combat greenwashing by requiring evidence to support environmental claims, banning unreliable sustainability labels, and prohibiting practices that shorten product lifespan or promote premature replacement.

Nevertheless, many uncertainties remain regarding the implementation of the new rules. That is why we've compiled a brief overview of the information available at present in a FAQ structure.

In this article:

  1. What is Greenwashing?
  2. What count as generic claims, and what should you use instead?
  3. What exactly will the new greenwashing rules prohibit?
  4. Who will be affected by the rules?
  5. When will the new rules against greenwashing take effect?
  6. What happens in case of non-compliance?
  7. How will carbon offsetting and removals be impacted?
  8. How will the claims be verified?
  9. What can you do to prepare and avoid greenwashing?

1. What is Greenwashing?

Greenwashing occurs when companies employ misleading claims and marketing tactics to deceive consumers about the environmental impact of their products, portraying them as more environmentally friendly than they truly are.

These claims are often intentionally vague, lacking adequate detail while still creating the false impression of sustainability, all to attract consumers increasingly concerned about their environmental footprint.

2. What count as generic claims, and what should you use instead?

Generic claims include terms like 'environmentally friendly,' 'eco-friendly,' 'green,' 'nature’s friend,' 'ecological,' 'climate friendly,' 'gentle on the environment,' 'carbon friendly,' 'energy efficient,' 'biodegradable'.

Instead of using these vague terms, the wording should be as specific as possible. For instance, rather than simply stating 'biodegradable,' provide detailed information such as 'this packaging will biodegrade within a month in case of home compost,' encouraging consumers to make informed and responsible choices.

Green claims greenwashing

3. What exactly will the new greenwashing rules prohibit?

The Directive aims to enhance clarity and trustworthiness in product claims and labeling by prohibiting the use of unsubstantiated environmental claims. It addresses common greenwashing tactics, categorizing them as unfair commercial practices. This means that over 50% of current claims will either need to be revised or removed entirely.

Blacklisting greenwashing

Among the provisions, the EU will blacklist:

  • Generic environmental claims on products lacking evidence
  • Claims asserting a product's neutral, reduced, or positive environmental impact based solely on the use of carbon offsetting credits unrelated to actual emissions reduction
  • Sustainability labels not derived from recognized independent certification schemes or established by public authorities
  • Claims of future environmental performance without realistic commitments from companies to achieve their stated goals.

To ensure compliance, companies will need to transition from using vague terms like “environmentally friendly” to providing specific, verifiable information about their products' environmental attributes.

Greenwashing product with green claims

4. Who will be affected by the rules?

The directive will mainly impact businesses operating in the Business-To-Consumer (B2C) sector. Micro-enterprises, defined as those with fewer than 10 employees and annual turnover and/or balance sheet totals not exceeding €2 million, will not be subject to the new regulations. Additionally, Small and Medium-sized Enterprises (SMEs) will have an additional year to comply compared to larger businesses.

5. When will the new rules against greenwashing take effect?

The Directive was published in the Official Journal of the European Union on March 6, 2024, and became entered into effect on March 26, 2024. The Directive must now be incorporated into national legislation across the EU. Member states are given a two-year period to adopt the law after its publication in the Official Journal. The Directive has set September 27, 2026, as the deadline by which EU members must implement the new rules.

6. What happens in case of non-compliance?

Companies that fail to adhere to the rules may incur penalties, including temporary exclusion from public procurement tenders, revenue loss, and fines amounting to at least 4% of their annual turnover.

7. How will carbon offsetting and removals be impacted?

Green claims relying solely on carbon offsetting schemes will no longer be permitted, particularly those asserting that a product (or service) has a neutral, reduced, or positive impact on the environment concerning greenhouse gas emissions.

Examples of such claims include terms like 'climate neutral,' 'CO2 neutral certified,' 'carbon positive,' 'climate net zero,' 'climate compensated,' 'reduced climate impact,' and 'limited CO2 footprint.' While these claims may still be allowed, they must accurately reflect the actual lifecycle impact of the product. They cannot solely rely on greenhouse gas emissions offsetting external to the product's value chain.

It's important to stress that claims based on the former and the latter are not equivalent. This means that companies can still highlight their investments in environmental initiatives, including carbon credit-projects. However, they must present such information in a transparent manner that avoids any misleading implications aka greenwashing and adheres to the requirements set forth in EU law.

CO2

8. How will the claims be verified?

Verification will be governed by the Green Claims Directive, which supplements the current Directive and introduces a verification mechanism for companies seeking to make environmental-related claims. Before using such claims for their products, companies will be required to provide evidence and obtain pre-approval from verifiers appointed by EU countries.

Likely requirements Green Claims Directive

It's important to note that the proposed directive does not mandate a single method for conducting these assessments, however the requirements will most likely be including:

  • Adopting a lifecycle perspective
  • Relying on widely recognized scientific evidence, accurate information, and international standards
  • Demonstrating that the claim does not merely meet legal requirements
  • Providing information on whether the product or company subject to the claim performs significantly better than common practice
  • Transparently reporting greenhouse gas offsets, distinguishing between emissions offsets and reductions/removals, and providing details on the quality of the offsets.

9. What can you do to prepare and avoid greenwashing?

Companies must recognize that we have entered an era of sustainability transparency. While specific details of the regulations are still unfolding, it's evident that verification processes are becoming stricter. Companies making green claims must be ready to support them with robust, widely recognized scientific evidence. Comparisons with other products should be fair and based on similar data, which a Life Cycle Assessment (LCA) can facilitate.

LCA Life Cycle Assessment

Conducting Life Cycle Assessments to prevent greenwashing

Now is the perfect time to consider conducting a Life Cycle Assessment to understand your footprint, providing confidence in your product's sustainable metrics to both you and your consumers.

If engaging in carbon offsetting, substantial reduction measures should be pursued first, for which a Life Cycle Assessment is the first step. Supporting carbon removal projects can still demonstrate environmental stewardship, if contributing to high-integrity and verified projects like Bamboo Village. Nevertheless, companies should always clarify the proportion of in-house efforts versus purchased offsets, when reporting on their carbon offsetting activities.

At Greenhouse Sustainability, we can assist you in complying with these rules by conducting a detailed Life Cycle Assessment and helping you communicating your sustainability efforts to comply with the new rules.

About Greenhouse Sustainability

At Greenhouse Sustainability, we have everything that is needed to guide your company towards a sustainable future.

With us you have come to the right place for calculating your footprint, whether it is for your entire company or a specific product. We have been calculating and optimizing footprints in the horticultural sector and beyond that since 2014.

In our 'house of sustainability' we help companies move towards a sustainable future through: Calculation, Reduction, Offsetting and Storytelling. We do this with a diverse team of ambitious professionals, with a shared passion for sustainability.

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