What will the EU’s new greenwashing ban mean for your business?
The European Parliament has voted overwhelmingly to ban misleading environmental claims and crack down on greenwashing. This is great news that many of us have been campaigning for!
The directive, which passed on 17 January 2024, has three main points.
- Generic claims and misleading product information will be outlawed
- All sustainability labels must be based on approved certification schemes
- Information about product guarantees must be clear
So as a business that talks about sustainability, what does this mean for you?
Well the legislation is still being finalised, so we can’t be 100% sure, but here’s what the ban is likely to mean for companies.
1. You’ll need evidence to use descriptors such as ‘climate neutral’, ‘eco’ or ‘biodegradable’
According to the EU, a whopping 40% of environmental claims have no supporting evidence. The directive aims to change this by introducing uniform requirements that companies should meet when making sustainability claims.
The idea is to provide general requirements, rather than a specific assessment method. Companies can use the requirements to benchmark their assertions, and ‘competent national bodies’ can use them to verify and enforce claims.
2. Carbon offsets won’t count as evidence for sustainability claims
This is a big one. Carbon offsetting has become really common in recent years. But we know that it can be problematic, allowing companies to proceed with ‘business as usual’ by simply buying offsets to persuade customers that they are sustainable.
The EU is now cracking down on this with a total ban on using carbon offsets to prove sustainability claims for products and services.
As Green MEP Anna Cavazzini said, “It should no longer appear that planting trees in the rainforest makes the industrial production of a car, the organisation of a soccer World Cup or the production of cosmetics climate neutral.”
3. You’ll only be allowed to use approved sustainability labels
Take a trip to the supermarket and you’ll see hundreds of different sustainability labels on the products (there are 230 sustainability labels and 100 green energy labels in the EU!).
The problem is, there are so many and each is slightly different – so which is the best? This is almost impossible to answer, because each label has its own criteria and there is no comparative measure to help customers. It’s confusing and doesn’t help people to make truly sustainable choices.
This will all change with the EU’s new law. In future, businesses will only be allowed to use sustainability labels based on official certification schemes or established by public authorities.
4. You’ll need to make information about your product’s guarantee more visible.
A big part of sustainability is durability – the longevity and repairability of a product. The EU’s directive will force businesses to make information about product guarantees more visible so that customers can choose longer-lasting products.
On top of this, a new, harmonised label will be created, and companies whose products have extended guarantees can use this to attract more customers. Great news if that’s you!
5. You’ll need evidence to back up your durability claims
Retail businesses often advertise their products’ durability – for example, stating that a washing machine will last for a minimum of 5,000 washing cycles.
Of course, customers are looking for this promise – but when the new law comes in, you will need to be able to back up any claims around durability with solid evidence.
6. You won’t be allowed to prompt customers to replace consumables earlier than is necessary
Some companies encourage customers to replace consumables, such as printer ink, before they really need to – which is wasteful, and expensive for the customer.
The EU directive will introduce new rules around how companies communicate with their customers on this topic, ensuring that products like ink are fully used up before they are thrown away and replaced.
6. You’ll probably need to submit green claims for verification before using them
On 14 February 2024, MEPs agreed with the Commission’s proposal that companies will need to seek approval before using environmental marketing claims. It’s proposed that accredited verifiers will review claims within a 30-day period.
Any companies found to violate these regulations may face exclusion from procurements, loss of revenues, and a fine amounting to at least 4% of their annual turnover.
MEPs have also suggested that the Commission compile a list of simpler claims and products that could undergo faster or more straightforward verification.
And if you’re a microbusiness feeling a bit panicked by this news, don’t worry – micro enterprises are set to be exempt from these new obligations! SMEs will be granted an extra year before being required to adhere to the rules.
Levelling the playing field
For those of us running truly sustainable businesses, the EU directive is great news. As the proposal states, “companies that offer truly sustainable products are [currently] disadvantaged compared to those who do not”. The second group can simply self-certify as sustainable, and customers can’t tell the difference!
The new EU law will change this, levelling the playing field and rewarding companies who are really doing the work to be more sustainable.
The EU’s proposal is worth taking a look at here. And if you’re a business owner, also keep an eye on the Green Claims Directive, which will more specifically detail how environmental claims can be used to sell products and services.
