The EU parliament has voted to pass a new directive[i] targeting vague and unsubstantiated environmental claims. The ruling means that the use of terms such as ‘environmentally friendly’, ‘biodegradable’, ‘climate neutral’, ‘recycled, and ‘eco’ will require evidence to back such claims.
Further, companies will effectively be banned from labelling products and services as ‘carbon-neutral’ or ‘climate-neutral’ if they do so through carbon offsetting. Croatian MEP Biljana Borzan said: “Companies can no longer trick people by saying that plastic bottles are good because the company planted trees somewhere – or say that something is sustainable without explaining how.”[ii]
Anna Cavazzini, Green MEP and chair of the Committee of the Internal Market and Consumer Protection was quoted as saying: “I am particularly pleased that claims such as ‘climate-neutral’ or ‘climate-positive’, which are based on CO2 offsetting, have been completely banned from the internal market. Investments by companies in climate protection projects are welcome and of course they can still be communicated.”[iii]
With agreement made, EU member countries now have two years to embed the directive into their own national laws, meaning it will be early 2026 before we see an impact. In addition, it gives the EU time to address how businesses can verify their environmental claims. The directive proposes the use of certification schemes, and following its approval by parliament, there will now be a temporary ban on the creation of new ecolabelling schemes. Edie.net suggests that for existing labels, a review process will be kick-started, requiring schemes to have a third-party verification element to enhance their credibility and reliability[iv].
The new directive comes ahead of debate around the more in-depth ‘green claims directive’, which is also targeted towards preventing misleading green claims being made, as well as helping consumers to make informed decisions. This law will seek to specify and elaborate upon the conditions for using environmental claims.
Further, the commission wishes to address the confusing situation at present relating to ‘Ecolabels’. These are environmental labels on goods, which aim to inform consumers of a product's environmental credentials while also assessing the performance of the product’s producer. The EU Commission notes that at present, there are more than 230 different labels in use today, and to address issues around consumer confusion and distrust, new regulation will be put into place.
The EU commission wants action on greenwashing given its own research findings from 2020 which found that 53.3% of environmental claims were vague, misleading or unfounded, and 40% were unsubstantiated[v].
[i] AG (europa.eu)
Lauren has extensive experience as an analyst and market researcher in the digital technology and travel sectors. She has a background in researching and forecasting emerging technologies, with a particular passion for the Videogames and eSports industries. She joined the Critical Information Group as Head of Reports and Market Research at GRC World Forums, and leads the content and data research team at the Zero Carbon Academy. “What drew me to the academy is the opportunity to add content and commentary around sustainability across a wealth of industries and sectors.”