Consumer

Green Claims Directive, Brussels’ weak proposal against greenwashing

March 23, 2023

On March 23, 2023, the European Commission adopted the proposed Green Claims Directive to ensure that news about the environmental sustainability of products and services is based on objective and consistent data, the antithesis of greenwashing (1,2).

However, the standards envisioned in Brussels are weak and fragmented, unsuitable for achieving the admittedly worthy goals proposed. Even worse, these standards allow for the validation of private certification schemes on which greenwashing thrives.

1) Environmental claim, premise

The proposed reform (2022) of the Unfair Commercial Practices Directive (Dir. 2005/29/EC)-aimed at protecting consumers in the era of ‘green transition’ (at least in theory)-introduced the notion of environmental claim in the following terms.

‘Environmental claim means.

any message or representation, which is not mandatory under Union law or national law, including text, pictorial, graphic or symbolic representation, in any form, including labels, brand names, company names or product names, in the context of a commercial communication, which states or implies that
a product or trader has a positive or no impact on the environment or is less damaging to the environment than other products or traders, respectively, or has improved their impact over time’ (3).

2) Greenwashing. European Commission studies.

The European Commission’s (2020) findings on environmental claims and greenwashing showed:

unreliability. 53.3 percent of the environmental claims examined reported vague, misleading or unfounded news,
40% of the statements were without demonstration.

Consumer protection cooperation authorities in member states in 2018 had found (out of 344 claims in 28 countries, which the Commission refers to as a ‘sweep survey’ in the introduction to this proposal):

in 57.5 percent of cases, the distributor did not provide sufficient evidence to assess the validity of the statement,
in many cases, the news was so vague that it was not clear whether it referred to the product or only to some of its components (50 percent), to the company or only to some of its products (36 percent), and to what stage of the product life cycle (75 percent). (4)

3) Greenwashing and climate seals. Civil society reports

Foodwatch, in its November 2022 report on greenwashing in the food sector, showed that:

no providers of climate seals (private labels of hypothetical ‘climate neutrality’ attestation) require food industries to take special measures to reduce CO2,
providers of these services, such as Climate Partners (D) and Myclimate (CH) make millions from brokering ‘questionable’ CO2 credits alone, including to industries and retailers that are not at all eco-logical. (5)

‘The business with climate advertising is modern indulgences trade, which can do more harm than good to the climate. Instead of spending money on misleading climate seals, manufacturers should rather invest in effective climate protection measures along their own supply chain‘ (Rauna Bindewald, Foodwatch).

4) Eco-friendly foods and textiles? Only if certified organic

Organic farming is the only one that ensures respect for biodiversity and ecosystems, soils and water. Based on rules established in European law for more than 30 years (EEC Reg. 2092/91, now EU Reg. 2018/848) that finally find recognition.

‘The terms ‘bio’ and ‘eco’ and their derivatives, alone or in combination, may be used’ -for foods and their ingredients, feed materials and other products included in the scope of reg. EU 2018/848, only on products certified organic (proposed Green Claims Directive, recital 9).

Cotton is taken as an example of cotton as a product derived from agriculture that can now come certified organic. Although the most widespread deceptions today involve foods from ‘integrated agriculture’ as well as those mentioned by Foodwatch. (6)

5) The puzzle of EU and national rules

The European Commission once again proposes a directive-a very weak instrument, compared to the regulation (7)-that acts to amend another directive (2005/29/EC). Which in turn is the subject of previous proposed amendment, precisely on the topic of greenwashing (see above, para. 1).

The puzzle of rules is complicated by existing and emerging regulations-often based on regulations, that is, truly identical rules at the EU level-that already specifically regulate a number of environmental claims. Organic, eco-label, ecodesign, Circular Economy Package, certifications for ESG use and sustainable investment, etc. (8)

5.1) Asymmetric consumer and market protection

The asymmetry of consumer protection vs. greenwashing is guaranteed by giving member states the power to decide whether and when the claim environmental are clear to consumers, consistent with the ‘scientific evidence’ (whose fickleness in the service of the marketing is well known, see note 9) and distinctive from statutory obligations (Article 3. Substantiation of explicit environmental claims).

Each member state will thus be able to ‘tailor’ to national interests the environmental claims to be allowed on products made there. And if Germany will allow green claims on goods produced with energy from coal-fired power plants, other member states will have to accept greenwashing (perhaps ‘offset’ by Peruvian carbon credits ) under the principle of free movement.

6) Green Claims Directive, the ABC’s.

Green claims are voluntary commercial information about the environmental performance of operators and/or their products and services. The Green Claims Directive, in the Brussels proposal, aspires to decline the general principles of fairness and transparency of business practices to this area.

Comparative claims-as is obvious, even in the case of nutritional claims-must be substantiated and transparent in defining the terms of comparison. Other claims must be clear and specify the supply-chain stage to which they refer. The information must include at least:

Environmental aspects, environmental impacts or environmental performance,
Relevant EU or international (e.g., ISO) standards, where applicable,
studies used to assess, measure and monitor the environmental impacts, aspects or performance covered by the claim, ‘unless the information is a trade secret.’
‘brief explanation of how the improvements were achieved’
‘certificate of compliance’ and contact information of the verifier who drafted it,
GHGs(greenhouse gases). CO2 and GHG claims must specify whether they are offsets(carbon credits) or emission reductions or removals,
A summary of the assessment of the above elements that is clear and understandable to consumers (Article 5. Communication of explicit environmental claims).

7) Environmental labels

Member states, in the Brussels design, should assess the compliance of environmental certification and labeling schemes with the standards to be introduced by the Green Claims Directive. And chaos is assured, as can be seen from a simple analysis of the six certifications that in France alone today lap up the topic of ‘agroecology. (10)

Scores and evaluations on products and operators, on the other hand, are reserved only for the ‘environmental labels awarded under environmental labelling schemes established under Union law’ , which must be based on ‘on an aggregate indicator of the environmental impacts of a product or trader’ (Article 7, environmental labels).

Thus, the multiplication of ‘ flags’ of ‘environmental sustainability’is foreshadowed, in the style of the environmental seals that feed the carbon credit market (see section 3 above). Pending-and in antithesis-of a European standard, all the better to be international, which should instead consider the overall impact of upstream product supply chains (11,12).

8) Environmental labelling schemes

‘Environmentallabeling systems certify that a product, process or business operator complies with the requirements for an environmental label.’ And they must meet the following requirements:

requirements developed by ‘experts capable of ensuring their scientific soundness’ and ‘subjected to consultation with a diverse group of stakeholders who reviewed them and ensured their relevance from the perspective of society.’
‘transparent, freely accessible, easy-to-understand and sufficiently detailed’ information on the ownership and decision-making bodies of the environmental certification and labeling system, objectives, requirements and control procedures, (13)
membership conditions proportionate to the size and turnover of enterprises, so as not to exclude small and medium-sized enterprises,
existence of a grievance and dispute resolution procedure, including withdrawal and suspension of the environmental label ‘in case of persistent and flagrant non-compliance with the requirements of the system’. All tailored to greenwashing, as the story of the in-sustainable RSPO-certified palm oil teaches. (9)

9) Interim Conclusions

A pebble in the pond of green paint will in no way solve the problem of greenwashing. Using a directive will amplify unfair competition from operators based in more lenient countries, as is already the case with regulatory asymmetries in labor law. (14)

The Green Deal, Farm to Fork and Biodiversity 2030 strategies cannot find any concrete implementation in such a weak proposal. Green Claims are just the symptom, and marketing leverage, of a phenomenon that needs to be addressed with identical rules across the entire EU market.

#SDG12. Responsible Consumption and Production

Dario Dongo

Notes

(1) European Commission. Green claims. New criteria to stop companies from making misleading claims about environmental merits of their products and services https://environment.ec.europa.eu/topics/circular-economy/green-claims_en

(2) European Commission, DG ENV. Proposal for a Directive on substantiation and communication of explicit environmental claims (Green Claims Directive). https://environment.%20Green% 22.3.22. COM(2023) 166 final

(3) European Commission. Proposal for a Directive amending Directives 2005/29/EC and 2011/83/EU as regards empowering consumers for the green transition through better protection against unfair practices and better information. COM(2022) 143 final https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:52022PC0143&from=EN. See Article 1

(4) European Commission (2020). Environmental claims in the EU: Inventory and reliability assessment Final report https://green-business.ec.europa.eu/environmental-footprint-methods_en

(5) Foodwatch (2022). Der grosse klima-fake report https://www.foodwatch.org/fileadmin/-DE/Themen/Klimaluegen/Report_Klima_Claims/Klima_Report_2022.pdf

(6) Donato Ferrucci, Dario Dongo. Integrated agriculture and pesticide use, the data do not add up. GIFT (Great Italian Food Trade). 28.1.19

(7) The directive postulates transposition by the 27 EU member states through appropriate national legislation that often diverges, even substantially, from the principles affirmed by the European legislature. They cite the example of the Single Use Plastics Directive (SUP), which has been disapplied in Italy with unjustified derogation in favor of domestic bioplastic packaging. See paragraph 1.3 of the previous article

(8) Green Claims Directive draft proposal, article 1

(9) Dario Dongo. Unsustainable palm oil, the charge of 101. GIFT (Great Italian Food Trade). 3.12.22

(10) Marta Strinati. Agroecology, 6 systems compared. The benefits of organic for farmers. Analysis. GIFT (Great Italian Food Trade). 30.8.20

(11) Marta Strinati. Environmental food labeling, call for a reliable scheme. GIFT (Great Italian Food Trade). 8.3.22

(12) Marta Strinati. Organic versus Eco-score. IFOAM appeals to the Court of Paris. GIFT (Great Italian Food Trade). 25.1.23

(13) Third-party certification must be performed by accredited bodies, in accordance with Reg (EC) No 765/2008(Green Claims Directive draft proposal, article 11)

(14) Marta Strinati, Dario Dongo. Slaughterhouses and meat industries. Behind the contagions at Covid-19, German-style caporalism. GIFT (Great Italian Food Trade). 7.7.20