Clearer rules, transparency of communication and a more precise definition of what greenwashing is, including how to prove it. This is what the European Commission's proposed directive on so-called GreenClaims, which will most likely come into force after the European Parliament elections on 6 and 9 June, is supposed to bring. The new legislation is intended to strengthen consumer confidence in companies' information on the sustainability of their products and to confirm their veracity through a series of measures, supported by transparent certification by independent organisations. It is already clear which companies will be affected by the directive, but it is up to the individual Member States to decide who will monitor its implementation.
The European Commission reports that up to 53% of green claims provide inaccurate, misleading or unsubstantiated information and 40% have no supporting evidence.
Inconsistent statements about how products are sustainable and beneficial to the environment and the future of the planet do not give consumers easy guidance on how to navigate the various symbols and labels. Accurately defining the environmental claims used in the presentation of products will therefore help to distinguish between those with real environmental benefits and those that merely emphasise their environmental image without any specific impact. We should then no longer encounter vague terms such as 'environmentally friendly', 'conscious' or 'sustainable' in our communications.
When will the directive affect companies in the Czech Republic?
Member States will have 18 months from the approval of the draft Directive to implement its rules into national legislation, with current estimates suggesting a period of 2024-2027. This period also includes the creation of a mechanism for assessing green claims and enforcing their inaccuracy by an independent accredited institution. The Green Claims methodology should be ready within 12 months of the final approval of the Directive, the verification mechanisms within 24 months.
The Green Claims Directive only covers the area of so-called voluntary claims by companies. Many of the mandatory claims on products are covered by other legislative standards, often aimed at specific business sectors, products or services.
For consumers, the main concern is protection against unfair commercial practices and limiting misinformation. However, it should be stressed that so-called 'greenwashing' is often caused by ignorance on the part of those who invent new solutions and names, and not simply a conscious or unintentional effort by companies to confuse consumers. In addition to regulating the market, the Directive can also give companies the benefit of rewarding and favouring those who are already actively contributing to the green transformation of the economy.
In her recent presentation at the event How to Communicate Sustainability?, organised by the Institute of Circular Economy, Lenka Mynářová from the No Greenwashing initiative noted that companies will now primarily be guided by legislation, not by customer wishes. According to her, this is a paradigm shift, where greenwashing is the last link in a chain that starts with eco-design and corporate governance.
Who does it affect?
The new legislation will apply to all companies operating on the European market, i.e. selling goods and services to European consumers, even if they are based outside the EU. The exception is so-called micro-businesses with up to 10 employees and an annual turnover of up to €2 million. However, even these companies can ask independent assessment bodies to assess their green claims and obtain a certificate of compliance with the Green Claims assessment criteria. The EU seeks to ensure that individual public administrations provide mechanisms to help even small and medium-sized enterprises to achieve certification, which may be financially unaffordable for them.
How to handle environmental symbols?
The Green Claims Directive effectively puts an end to so-called "self-certification". Only environmental symbols based on clearly defined certification by an independent third party or symbols issued by public authorities will be allowed. New environmental labels can only be created if companies can clearly demonstrate their greater benefit over existing labels.
Green Claims also aims to make it easier for consumers to find their way around eco-labels, most of which are to be abolished and replaced by a single Product Environment Foot Print system, according to Lenka Minářová. A similar system is known for example for white goods marked with energy labels. For foodstuffs, efforts to have a uniform Nutri-Scoring have so far failed. In contrast, the most emerging industry in this respect is now the cosmetics industry, where the Eco Score Beauty Consortium has been established.
Limited "carbon neutral" labelling
The use of the carbon neutral label will only be allowed where a company reduces emissions over the life cycle of a product, not simply by offsetting emissions elsewhere. This encourages companies to take an active role in reducing their carbon footprint, and companies can still promote their investment in green initiatives, including carbon credit projects, as long as this is not misleading and meets the requirements set out in EU legislation.
Defining what already qualifies as greenwashing is also crucial. Among other things, the Directive looks in detail at offsetting and its translation into green claims. For example, if a company's offset strategy is in any way involved in the statements "climate neutral", "carbon neutral by..." or "100% CO2 offset", it must be clearly documented which activities are involved and to what extent.
The claims must be substantiated
According to the new directive, the environmental message claimed must always be transparent and demonstrable, ideally on the basis of independent verification by third-party certification. This is to ensure that claims about the environmental or social sustainability of products are credible and true.
Control and sanctions
The establishment of appropriate verification and independent bodies involved in the assessment of Green Claims is entirely in the hands of the individual Member States.
The new legislation provides for a 30-day period to correct an erroneous advertising claim if the verification authority identifies such a claim as greenwashing. Failure to correct within this period may result in a fine of up to 4% of the company's annual turnover, as well as the confiscation of all income from transactions related to the product or service in question, and exclusion from public procurement and funding for up to 1 year.
Under the new directive, consumer associations can take action directly against a particular company and its activities, including by means of a class action.
Promoting the circular economy
One of the other objectives of the new legislation is to prevent the misuse of the circular economy concept for greenwashing, especially in the area of recycled materials and repairability of products. This may, for example, restrict the advertising of a product containing elements that artificially shorten its lifetime or unsubstantiated claims of durability or reparability. Recycling claims must also be specific; for example, if only the packaging is recycled and not the product, the consumer must not be misled as to which part of the product is made of recycled material.
Why is this happening?
Part of the public may see the new measures as restrictive and only encouraging the swelling of the European administrative burden. But the reality is that few people really know about certifications, labels and eco-labels. Who has not been tempted by the natural-looking packaging of a product, only to discover that its contents are actually not sustainable?
Data also shows (MML TGI research from 2022) that 39% of consumers aged 15 to 64 would be willing to buy a sustainable product even at a higher cost. Meanwhile, only 2% of Czechs definitely trust advertisements for sustainable services, and around 34% trust them more.
The direction the European Union is taking is also interesting in the context of a report published this February by the Centre for Climate Integrity. According to it, the petrochemical industry and plastics manufacturers have for decades misled the public about the feasibility of recycling, or in the development of offset programmes, which are not only opaque in this country. The case of a well-known chain, whose marketing message on quality was confronted by animal protectionists with published videos from the night operation of halls showing the poor, even cruel conditions of chicken farming, is also currently resonating with the Czech public. Abroad, the same chain has already withdrawn from the sale of chickens from similar farms on the basis of local legislation.
A sustainable strategy
Helping clients to prioritise their sustainable activities and ensuring communication across the media landscape without greenwashing is a way to participate in the implementation of the new directive's rules, not only in our own business. In response to the changing context of Green Claims, we are therefore working with industry experts, and across the OMG Group, we aim to integrate the most relevant sustainability, marketing and PR expertise to work with clients to avoid potential complications due to inaccurate communication of environmental issues, for example on social media, which could lead to unwanted situations.
Markéta Pavlíková, Head of Sustainable Solutions Fuse / OMG
Source: mediaguru.cz
