Navigating the green claims landscape in the EU

To navigate the regulatory landscape for making green claims in the EU, WPP and Hill & Knowlton hosted a session on the topic with a representative from the European Commission
 

Recent proposals by the European Commission have sought to regulate environmental and sustainability claims made by brands in their communications. The proposals build on existing work undertaken by the Commission.

In 2020, the Commission conducted a study that found that over half of green claims examined were vague, misleading or unfounded; and that 40% of them were unsubstantiated. The Commission also argued that the wide variety of different sustainability labels used by brands – more than 200 were identified – undermined consumers’ trust.

That work resulted in a proposal, tabled by the Commission in March 2023, for a European Directive on Substantiation and Communication of Explicit Environmental Claims. The proposal complements existing bans on making generic green claims that the EU’s executive arm proposed under the Directive on Empowering Consumers for the Green Transition. These notably include claims that use words like ‘green’, ‘ecofriendly’ or ‘good for the planet’.

Małgorzata Gołębiewska, Team Leader on Green Claims at the European Commission, joined us at the WPP Campus in Brussels to outline the rules she and her team have been working on, and explain what impact they will have on businesses in the short term.

She pointed out that the textile and cosmetics industries are particularly under the spotlight for the claims they regularly communicate. She also highlighted a European citizen survey conducted by Eurobarometer which showed, among other things, that 73% of respondents say the impact of a product on the environment is deemed by consumers to be ‘very important’ or ‘rather important’ when making a purchasing decision.

The objectives of the proposed Directive

The primary objectives of the proposed Directive are to protect consumers – and enable them to make informed decisions – while boosting the competitiveness of companies and businesses.

Gołębiewska presented the main features of the proposed Directive as follows:

• it sets out how companies should substantiate their B2C environmental claims;

• it explains how substantiation methodologies would work: claims should be backed with widely recognised scientific evidence and international standards, and should address significant environmental issues; and

• it clearly spells out the requirement for third-party verification: independent accredited verifiers will have to certify substantiation of claims and labelling schemes.

What claims will it cover?

The proposed Directive applies to explicit environmental claims and commercial communication made by companies in relation to the products they market to consumers. It specifies what type of claims should be regulated, and how these should be substantiated, verified and communicated.

Examples of green claims governed by the draft Directive include:

• claims on environmental aspects: for example, ‘packaging made of 40% recycled plastic’;

• claims on environmental performance: for example, ‘this product is more energy efficient than ever before’; and

• claims on environmental impact: for example, ‘company's emissions reduced by 16% since 2010’.

The provisions of the proposed Directive – if adopted – will significantly impact organisations that make claims targeted at consumers. In effect, they will need to ensure that their claims are supported by data and evidence that is readily available and verifiable.

Tackling the practicalities

While businesses have demonstrated their concern over the burden the proposed Directive might impose on them, the tight timeline for its introduction and the costs involved in the verification process, Gołębiewska said that several companies have already welcomed the proposal and provided positive feedback.

Asked what companies can do to prepare for compliance with the new rules, Gołębiewska stressed that businesses should focus on making only meaningful claims on significant environmental impacts, use as much company-specific data as possible and rely on verified certification schemes. This approach will also mitigate the risk of ‘greenhushing’, a problem raised by numerous stakeholders.

The incoming EU Green Claims Directive is an indicator of a tightening regulatory landscape which builds on the existing body of regulation and industry self-regulation.

The Directive is still being negotiated by the EU institutions and the final wording, and obligations, will only be known later in the year.