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Green Claims – EU criteria against greenwashing and misleading environmental claims

On 22.3.2023, the EU Commission presented a draft directive on common criteria against greenwashing and misleading environmental claims. The Commission thus supplemented the proposals it made last year for changes to the Unfair Commercial Practices Directive.

Key points of the draft directive

According to the Commission’s proposal, when companies make environmental claims (green claims) about their products or services they will have to comply with minimum standards. Before companies include environmental claims in their information for consumers, in the future, such claims will need to be proven on the basis of scientific findings. With the exception of micro-enterprises (below 10 employees and €2m of sales), companies will moreover need to have this information verified by an accredited organisation. 

Please note: Advertising claims or labels that use aggregate scoring of the product’s overall environmental impact will no longer be permitted, unless this is explicitly provided for under EU rules. It is yet to be clarified whether or not this would be applied retroactively, for example, labels that were legitimately conferred in the past might even have to be removed again.

Rules on labelling schemes

The draft also provides for the regulation of environmental labels. According to information from the Commission, there are currently at least 230 different labels. In future, new public labelling schemes will not be allowed, unless they have been developed at EU level. New private schemes will then need to obtain prior approval and demonstrate that the environmental objectives that are being pursued are more ambitious than those of the existing scheme.

An initial appraisal 

The Green Claims Directive could pose a risk of over-regulation. In particular, small and medium-sized enterprises will effectively, in the future, no longer be able to use green claims in their advertising if they are not able to afford the certification. These rules appear to be too far-reaching given that, previously, misleading advertising and advertising using self-evident content had already been prohibited.

Outlook: After translation, the draft directive still has to be approved by the Council and Parliament of the EU. It is to be hoped that the rules for medium-sized enterprises will be further relaxed and liberalised. Otherwise, this would be doing a disservice to, ultimately desirable, competition with respect to the fair and truthful presentation of environmentally-friendly features if only the ‘big companies’ were able to afford to make use of this for their advertising.

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