EU announces guidelines for companies seeking to validate green claims

20 Feb 2024 --- The European Parliament (EP) has released its guidelines for businesses looking to comply with the new Directive on Empowering Consumers for the Green Transition (ECGT), which it approved last month. Member states are now expected to transpose it into national law within two years.

The purpose of the ECGT is to regulate and restrict deceptive claims regarding products’ environmental sustainability. Last Wednesday, the EP’s Internal Market and Environment committees adopted their position on the specific rules companies will need to follow to validate such claims. 

“There are two aspects of products that will be covered by the ECGT, voluntary labels and voluntary claims,” Dimitri Vergne, sustainability team leader at the European Consumer Organisation (BEUC), tells Personal Care Insights. 

Non-compliant companies risk exclusion from procurement, loss of revenues and a fine of at least 4% of their annual turnover.Cyrus Engerer, EP spokesperson for the Environment Committee, states: “It is time to put an end to greenwashing. Our agreement on this text ends the proliferation of deceitful green claims that have tricked consumers for far too long.”

“It also ensures that businesses have the right tools to embrace genuine sustainability practices. European consumers want to make environmental and sustainable choices, and all those offering products or services must guarantee that their green claims are scientifically verified,” he adds.

Verification and penalties
Members of the EP (MEPs) and the European Commission (EC) have reached an agreement on the need for companies to submit any product making a sustainability claim to a verification process. These will then be assessed over a period of 30 days in accordance with the adopted legislature. 

Non-compliant companies risk exclusion from procurement, loss of revenues and a fine of at least 4% of their annual turnover. 

MEPs recommend that the EC release a list detailing “less complex claims” and the context in which they may be applied to facilitate the implementation of the verification process. The EC is also yet to decide if products with hazardous substances will be allowed to make any sustainability claims. 

“Companies will need to show the added value (in terms of legitimate environmental sustainability) of their products and services to an independent governance body, peer-reviewed by external players,” the BEUC’s Vergne asserts. 

“For instance, something we often see in cosmetics is big cosmetic companies developing their own in-house labels, within which they have a very wide range of products,” he details. “Many end up developing their own in-house label that makes sustainability that they only apply to their products. These will now be subjected to rigorous testing.”

Meanwhile, microenterprises — defined in the EU as businesses with less than ten employees — will not be subjected to the new obligations and SMEs — companies with fewer than 250 employees — will be allowed an extra year to begin ECGT compliance. 

Banned claims
The adopted legislature targets “generic” claims that “cannot be demonstrated” or quantified, naming specifically the assertions about a product being “environmentally friendly,” “eco-friendly,” “green,” “nature’s friend,” “ecological,” “environmentally correct,” “climate-friendly,” “gentle on the environment,” “carbon friendly,” “energy efficient,” “biodegradable” and “bio-based.”

In a recent interview with Nutrition Insight, Vergne explained that a key purpose of the new regulations is to boost consumer trust in viable environmental sustainability claims and to empower them to choose products of companies actually taking the steps needed to back their claims. 

“Studies show that 50% of companies’ environmental claims are misleading,” comments Andrus Ansip, EP rapporteur for the Internal Market Committee. “Consumers and entrepreneurs deserve transparency, legal clarity and equal conditions of competition.”

“Traders are willing to pay for it, but not more than they gain from it. I am pleased that the solution proposed by the committees is balanced, brings more clarity to consumers and at the same time is, in many cases, less burdensome for businesses than the solution originally proposed by the Commission,” he adds. 

By Milana Nikolova