European Parliament adopts new anti-greenwashing law

Summary

On 17 January 2024, members of the European Parliament voted overwhelmingly in favour of a directive to tackle greenwashing by prohibiting false environmental claims. This aims to protect consumers from misleading marketing practices, in particular claims about the environmental impact of products or services. The approval of the directive comes after months of negotiations among EU institutions and member states as to how environmental claims should be regulated. Key aspects of the new directive include rules aimed at making product labels clearer by banning the use of generic environmental claims which are not backed up with proof and the use of claims based on offsetting schemes.

The new directive will be used in conjunction with the Green Claims Directive, which is currently being discussed at committee stage in Parliament. The Green Claims Directive will be more specific and expand on the conditions for using environmental claims in further detail.

Advertising

A recent study by the European Commission found that more than half of green claims by companies in the EU were vague or misleading, and 40% were completely unsubstantiated. The proliferation of sustainability labels and failure to incorporate comparative data has led to confusion and credibility concerns. The new directive aims to address this by regulating the use of such claims.

Under the new directive, only sustainability labels based on official certification schemes or established by public authorities will be permitted in the EU. The use of vague claims about the environmental impact of products or services such as ‘eco-friendly’, ‘environmentally friendly’, ‘recycled’ and ‘biodegradable’ will only be allowed if they can be backed up with evidence.

This is in line with the UK’s Advertising Standards Authority’s (ASA) updated guidance on misleading environmental claims and social responsibility, see our recent article. The guidance reflects the Competition and Markets Authority’s Green Claims Code and draws on principles established by the recent rulings by the ASA involving advertisers breaching the codes by making positive environmental claims that exaggerate the business’s environmental credentials.

Carbon offsetting

In addition, the new directive addresses carbon offsetting by banning claims that an offering is “climate-neutral”, or has a “reduced”, or “climate-positive” impact where it relies on offsetting to balance its emissions sheets. This responds to an increasing concern about the credibility of some offsetting programmes, with many studies revealing that such schemes do little to mitigate emissions, and do not actually remove any carbon emissions from the atmosphere.

Durability claims

The new directive will also target false or unfounded product durability claims. This aims to contribute to sustainable consumption by introducing a number of measures that promote reusability and repairability by making repair more attractive for defects consumers may experience throughout a product’s lifecycle.

Claims that prompt the replacement of consumables earlier than strictly necessary, or that present goods as repairable when they are not will be banned. To promote reparability, businesses will be required to make information relating to guarantees on products more visible. The new directive also mandates the creation of a new, harmonised label which will be created to give more prominence to goods with an extended guarantee period. These proposals are an important step in delivering on the circular economy objectives, as defined in the Circular Economy Action Plan.

Next Steps

Before passing into law, the legislation requires the approval of the EU Council, which reached a provisional agreement in September with the European Parliament on the proposals. Approval is therefore expected to happen swiftly. Once published in the EU’s Official Journal, member states will have 2 years to introduce the rules. Although the directive does not apply in the UK, as many UK-based businesses sell into EU markets, this will likely have a ripple effect on product messaging in the UK and is already aligned with UK industry standards such as the ASA, as mentioned above.

Together with the Green Claims Directive, the new directive will help establish a clear regime for environmental claims and labels. They aim to fortify consumer confidence by preventing deceptive marketing tactics and ensuring that consumers receive reliable information about the environmental credentials of the products they buy.  

With thanks to Dani Bass (trainee solicitor) for her contributions.