The ultimate guide to the EU Green Claims Directive with the 25 most important questions & answers (FAQ) - constantly updated.
Welcome to our comprehensive Q&A on the EU's proposal for a new EU Green Claims Directive (GCD)
This post also covers the Directive on Empowering Consumers for the Green Transition (ECGT), which aims to prevent unfair company tactics from hindering sustainable consumer choices. The ECGT is the "sister directive" of the EU Green Claims Directive and has already been formally adopted by the Council. See updates below.
If you're looking to understand what green claims really mean, get familiar with the regulations, or figure out how to support your green claims with evidence, you've come to the right place. Our FAQ will cover all these topics and offer a handy, high-level guide to keep you compliant.
The Council has now formally adopted the Directive on Empowering Consumers for the Green Transition (ECGT), which aims to prevent unfair company tactics from hindering sustainable consumer choices.
The ECGT is the "sister directive" of the EU Green Claims Directive (GCD).
This means the Directive on Empowering Consumers for the Green Transition (ECGT) must now be integrated into national legislation across the EU.
The directives follow the 2020 EU consumer agenda and circular economy action plan, aligning with the European Green Deal. A good overview can be found here: https://environment.ec.europa.eu/strategy/circular-economy-action-plan_en
According to the EU / European Commission, a “green claim” (or “environmental claim”) is defined as a commercial or marketing claim that suggests or otherwise creates the impression that a product or service is environmentally friendly (i.e., has a positive impact on the environment), or is less damaging or harmful to the environment than competing goods or services, or that it has improved over time.
The Green Claims Directive aims to stop greenwashing by setting standards for environmental claims. The spark came from a 2020 study showing that 53% of environmental claims in the EU were vague or misleading. If your company makes claims like "T-shirt made of recycled plastic bottles" or "ocean-friendly sunscreen," you'll need to meet minimum standards for backing them up.
This directive doesn't cover claims already under existing EU rules, such as the EU Ecolabel. To make a claim, you'll need independent verification and robust scientific evidence, keeping in mind any trade-offs for a balanced view.
The directive is still awaiting approval but is part of a larger EU effort, including the European Green Deal, to empower consumers and promote a greener economy.
Please note: The EU Directive on Empowering Consumers for the Green Transition (ECGT; the "sister directive" to the EU Green Claims Directive) was adopted by the Council on February 20th. See also latest updates.
Start by knowing that any claim suggesting a positive, reduced, or neutral environmental impact falls under this directive. Keep the focus on a "life-cycle" approach from raw material to end-of-life. For instance, you'll need to back up claims like "30% recycled plastic packaging," “bee-friendly juice,” or “carbon compensated ride.”
The directive pays special attention to climate-related claims like “climate positive,” or “carbon neutral by 2030.” It urges companies to cut emissions in-house rather than rely solely on carbon offsets. So, if you're making such claims, clarify how much is from in-house efforts and how much is from buying offsets.
Also, the directive regulates environmental labels to maintain transparency. However, if a green claim is already covered by specific EU rules, like the EU Ecolabel, those rules will apply instead.
If you're a business operating in the EU, the Green Claims Directive likely applies to you, except for some small businesses. You'll need to adhere to guidelines on substantiating and communicating your green claims, and secure a certificate of conformity from an accredited verifier.
Yes, the Directive exempts microenterprises with fewer than 10 employees and less than EUR 2 million in annual turnover. They can still get a certificate of conformity if they meet the criteria, but they're not strictly bound by all the directive's provisions.
It also doesn't cover claims on organically certified products, sustainability information in financial services, or reports from businesses following EU sustainability standards. These are still subject to other regulations.
Yes, if you're a non-EU business targeting EU consumers, you'll need to comply with the directive. The aim is to create a global standard for environmental claims, especially for companies interacting with the EU market.
Be aware that new private environmental labels are generally not allowed. If you think your label adds value in terms of environmental goals or scope, you'll need to seek approval from the Commission.
The directive kicks in 20 days after appearing in the Official Journal at the EU level. As for Member States, they have 18 months to put laws and regulations in place and must enforce these rules 24 months after the directive's effective date. Keep these timelines in mind to stay compliant.
Here's a bullet-point summary of the latest key dates:
The European Commission takes the lead in overseeing the directive's implementation across Member States. Member States themselves are tasked with establishing verification procedures for environmental claims and designating competent authorities for coordination. Additionally, the Commission is set to evaluate the directive five years after it takes effect.
The Directive specifies that environmental claims must be based on:
PEF/OEF methods in the Green Claims Directive are tools that use life cycle assessment (LCA) to measure the environmental impact of products or entire organizations. They use international standards to guide how material and energy flows, as well as emissions and waste, are accounted for throughout a product's life. These methods aim to help companies better understand and lessen their environmental impact, including those related to the supply chain.
No, there isn't a one-size-fits-all standard methodology for assessing environmental footprints. Initially, the European Commission looked into using EU product and organization environmental footprint methods as a standard. However, it found that these methods don't cover all types of products or all kinds of environmental impacts. Therefore, the Commission opted for a more flexible approach rather than a single, standardized method.
The enforcement of the Green Claims Directive is outlined in Article 16, titled "Complaint-handling and access to justice." Under this article, individuals or organizations with a "legitimate interest" can submit substantiated claims to the designated national authorities.
Member states are responsible for setting up these competent authorities and a coordination mechanism. They also establish procedures for verifying the environmental claims made by products or traders in the market, as well as ecolabeling schemes. The Directive mandates the use of company-specific, primary data to support green claims.
The complainant may have option for legal action at national or EU level.
Non-compliance may result in fines up to 4% of annual turnover in affected Member States. Additional penalties include revenue seizure from related transactions and exclusion from public procurement and funding for up to 12 months.
Update: The first draft of the directive stipulated that member states must introduce penalty provisions for the enforcement of the directive (up to 4% of annual turnover). The current draft handles this more leniently: it "merely" requires that member states ensure appropriate and effective sanction mechanisms for so-called Greenwashing.
To keep businesses in check, consumers can rely on "qualified entities" under the Representative Actions Directive (EU) 2020/1828. These organizations, often consumer groups, can legally challenge companies if there are doubts about the authenticity of their green claims. In essence, you can contribute to accountability by supporting or collaborating with these qualified entities.
Consumers don't have actionable rights under the Green Claims Directive. However, they do benefit indirectly. The Directive aims to provide consumers with reliable environmental claims and labels, helping them make informed purchasing decisions. Additionally, the Directive contributes to a more level playing field in the internal market, offering cost-saving opportunities for businesses trading across borders. This, in turn, accelerates the green transition and enhances environmental protection, which ultimately benefits consumers.
The directive aims to cut down on greenwashing by setting strict verification and substantiation standards for environmental claims. Member States will oversee these processes, relying on independent, accredited verifiers. So, if your company makes a green claim, be prepared to back it up with robust, widely recognized scientific evidence.
If you're comparing your product to others, make sure the comparison is fair and based on similar data. Aggregate scores that lump various environmental impacts together are not allowed unless they align with EU rules.
Regarding labels, EU-level schemes are the gold standard. New public labeling schemes must be at the EU level, and new private schemes need pre-approval and must show they're more ambitious environmentally. All environmental labels need to be transparent, third-party verified, and reviewed regularly.
No, the European Commission actually sees the directive as a boost for companies genuinely focused on eco-friendly practices. The idea is that a uniform set of rules can enhance your competitive edge, reduce the risk of varying legal standards, and lower costs if your claims are certified. This approach aims to build trust in EU industries, both domestically and internationally.
The directive is part of the European Green Deal, which aims to make the EU climate-neutral by 2050. It's specifically nested within the Circular Economy Action Plan (CEAP), which includes the Initiative on Substantiating Green Claims (ISGC). This initiative works alongside other EU policies focused on empowering consumers, designing sustainable products, and implementing a farm-to-fork strategy. Together, these efforts aim to establish a coherent policy landscape that encourages sustainable goods and services.
The directives follow the 2020 EU consumer agenda and circular economy action plan, aligning with the European Green Deal. A good overview can be found here: https://environment.ec.europa.eu/strategy/circular-economy-action-plan_en
Yes, several countries have national laws that align with the new Green Claims Directive. Here's a quick list for reference:
Some countries also offer specialized guidelines on environmental claims, such as Sweden, Denmark, Finland, and Norway with their Guidance from the Consumer Ombudsman, or Hungary's Green Marketing Guidance.
The Green Claims Directive doesn't replace previous EU directives but rather enhances them. It works alongside the Unfair Commercial Practices Directive (UCPD), which already addresses misleading advertising and sales practices, including green claims.
The European Parliament and the Council are revising the UCPD based on a new proposal called the "Directive on Empowering Consumers for the Green Transition," submitted in March 2022. This proposal aims to make the UCPD more effective against greenwashing by adding a blacklist of unfair practices. The Green Claims Directive complements this by setting out specific rules for verifying and communicating environmental claims before they're marketed.
The official Green Claims Directive Proposal brings several changes compared to the leaked draft. The updated version takes a flexible approach to substantiating environmental claims, moving away from a single standard methodology. It also establishes a verification mechanism that simplifies legal requirements, making it easier for companies to comply. Here are some key differences:
1. Flexibility in Substantiation: Instead of sticking to a single methodology, the Commission opted for a more flexible approach to substantiate claims.
2. Verification Mechanism: The new proposal emphasizes a verification system that ensures compliance with the rules, aiming for a level playing field in the EU market.
3. Limited Use of Aggregate Scores: The use of aggregated environmental impact scores is now limited to EU-level claims and labels.
4. Microenterprise Exemption: The proposal now excludes microenterprises from certain substantiation and communication requirements to avoid undue burdens.
5. Focus on Existing Labels: The proposal aims to boost the adoption of existing public schemes and restricts the creation of new public or private labels.
6. Reason for Flexible Approach: Initially, the Commission had considered using a single standard based on environmental footprint methods. However, it found this approach didn't cover all impacts for all products and could sometimes give an incomplete picture.
The official proposal aligns more closely with empowering consumers in the green transition, aiming for a more effective and efficient set of rules.
The Commission engaged stakeholders through public and online consultations, as well as workshops. Business associations and large companies called for independent certification and flexible ways to communicate environmental information. Environmental and consumer NGOs recommended leveraging existing tools like type 1 ecolabels. Public authorities and citizens also favored independent, accredited certification.
A 2020 workshop highlighted the need to tackle greenwashing and support a harmonized EU approach, emphasizing the importance of trusted ecolabels like the EU Ecolabel.
Critics highlight several concerns about the directive:
Weak Enforcement: Skeptics worry that without robust enforcement by national authorities, the directive won't effectively curb misleading green claims.
Narrow Focus: The directive has come under fire for primarily emphasizing carbon emissions and not adequately addressing other environmental factors like toxicity and recyclability.
Methodology Gaps: Environmental organizations point out the absence of a unified EU methodology for assessing environmental impacts, leaving room for companies to choose methods that paint them in a better light.
Diluted Guidelines: Consumer and environmental advocates argue that industry lobbying has watered down the rules, making them too vague to be effective.
The overall sentiment is that while the directive is a step in the right direction, its success hinges on strong enforcement, a broader focus on environmental factors, and clear, unified methodologies.
Various organizations have proposed the following improvements:
Ban Carbon Neutrality Claims: Critics advocate for a ban on all claims about carbon or climate neutrality to prevent misleading statements. They suggest carbon credits should only reference separate contributions to climate action.
Limit Future Claims: Proposals suggest restricting future environmental claims to the company level, rather than allowing them for individual products. This aims to focus efforts on overall organizational improvements.
Strengthen Criteria for Future Claims: Recommendations include allowing future-oriented environmental claims only if they meet specific, science-based criteria. These claims should also be verified by an independent system and backed by a realistic implementation plan.
Pre-Approved Schemes: Organizations suggest introducing a list of pre-approved certification schemes and sustainability labels, preferably at the EU level. This would establish a uniform set of ambitious criteria.
International Alignment: Recommendations call for harmonizing EU methods with globally recognized standards and ensuring that national schemes that meet these criteria remain operational.
By considering these suggestions, the directive could address some of the current criticisms and create a more robust framework for environmental claims.
The Green Claims Directive offers several opportunities for businesses:
Spur Market Opportunities: By encouraging competition around sustainable products, the directive opens new market segments, allowing businesses to diversify and grow.
Enhance Product Quality: The focus on sustainability can lead to improved product performance, benefiting both consumers and manufacturers.
Increase Credibility: The directive provides a framework for businesses to substantiate their environmental claims. This can build trust among consumers and help companies stand out.
Avoid Greenwashing Pitfalls: Businesses can sidestep the reputational risks associated with greenwashing by adhering to the directive's standards.
Level Playing Field: By regulating private environmental labels, the directive makes it easier for businesses to compete fairly, reducing consumer confusion in the process.
Overall, the directive aims to reward genuine sustainability efforts, spur innovation, and drive market growth, while holding businesses accountable for their environmental claims.
9. Copa - International Federation of Organic Agriculture Movements, 2023
10. Applia - Home Appliance Europe, 2023
No, the content made available does not constitute individualised legal advice. It merely serves as general information. The content is not made available in the context of a contractual legal counsel relationship.
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