New EU Directive empowers consumers against corporate greenwashing

The EU continued its efforts to clamp down on misleading environmental claims (greenwashing) this month with the European Parliament approving the Green Claims Directive and the Greenwashing Directive entering into force today (26 March 2024).

Green Claims Directive

The Green Claims Directive will introduce stricter regulations on environmental claims and labelling and verification requirements. Organisations could also face exclusion from public procurements and financial penalties for failure to comply of up to 4% of their annual turnover. The Green Claims Directive is now being reviewed by the Council of the EU and we expect to hear more on the text of this Directive and its implementation date following the European Parliament elections in June.

Greenwashing Directive

The Greenwashing Directive (Empowering Consumers for the Green Transition through Better Protection against Unfair Practices and Better Information (Directive (EU) 2024/825)) introduces “specific rules [….] to tackle unfair commercial practices that mislead consumers and prevent them from making sustainable consumption choices, such as practices associated with the early obsolescence of goods, misleading environmental claims, […] misleading information about the social characteristics of products or traders’ businesses, or non-transparent and non-credible sustainability labels.”

While the UK is not required to implement the Greenwashing Directive, entities trading in an EU member state will need to familiarise themselves with the changes. The Greenwashing Directive makes the following amendments to the Unfair Commercial Practices Directive (2005/29/EC):

1. Environmental, social characteristics and circularity are included as characteristics of products which could be considered misleading.

1. The following environmental claims are prohibited:
   1. Generic environmental claims which are not supported by “recognised excellent environmental performance which is relevant to the claim”. The following are included as examples of “generic environmental claims”: environmentally friendly, eco-friendly, green, nature’s friend, ecological, environmentally correct, climate friendly, gentle on the environment, carbon friendly, energy efficient, biodegradable, bio-based.
   2. Claims about future environmental performance (eg achievement of net zero by a certain date) unless the claim is supported “by clear, objective, publicly available and verifiable commitments and targets given by the trader and set out in a detailed and realistic implementation plan”, which has been verified by an independent expert.
   3. Claims that a product has a “neutral, reduced, or positive impact on the environment in terms of greenhouse gas emissions” where this is due to offsetting emissions and not due to to the product or production or supply of the product.  Examples of these claims include climate neutral, CO₂ neutral certified, carbon positive, climate net zero, climate compensated, reduced climate impact and limited CO₂ footprint.
   4. Claims about an entire product or business “when it actually concerns only a certain aspect of the product or a specific, unrepresentative activity of the trader’s business”. Examples include statements such as “made with recycled material” which imply an entire product is made with recycled material and not one aspect such as packaging.

1. Sustainability labels mustn't be used unless they are based on a certification scheme or established by a public authority. A sustainability label is defined in the Greenwashing Directive "as any voluntary trust mark, quality mark or equivalent, either public or private, that aims to set apart and promote a product, a process or a business by reference to its environmental or social characteristics, or both, and excludes any mandatory label required under Union or national law".

1. Comparisons with other products must include “information about the method of comparison, the products which are the object of comparison and the suppliers of those products”.

1. Benefits of products advertised must be directly relevant to the product or business. An example given is a claim that bottled water is gluten free.

Member states have until 27 March 2026 to adopt the greenwashing Directive and the rules will come into force from 27 September 2026.

In some ways the above is not a huge departure from the existing advertising law, but it signals that combating greenwashing is a priority for the EU and we would expect this to filter through into the way that national advertising regulators examine and police claims. Advertisers and organisations may want to proactively examine claims they have previously made to help identify risk areas and put in place appropriate governance for the future - our lawyers would be happy to discuss how we can help you with this or any of the above.