The New Green Claims Directive and What It Means for Retail
Details correct at date of publication
The European Commission proposed a new Green Claims Directive on March 22 2023 that would establish new requirements for substantiating, verifying, and disclosing evidence for environmental claims.
This represents a much-needed paradigm shift in the realm of environmental marketing and communication. If enacted, every environmental claim a business makes about a product would need to be supported by an assessment that meets strict criteria.
Ultimately, details of the assessment must be shared alongside claims, which should help to significantly reduce greenwashing across Europe and empower customers with greater knowledge about what they’re actually buying.
Vaayu’s Overview of the Green Claims Directive
A proposal for a directive on substantiation and communication of explicit environmental claims (the “proposed Green Claims Directive” or “Directive”). Find out what this means in more detail below.
Status of the Green Claims Directive
- Proposed by the European Commission 22 March, 2023
- Next steps: Must now undergo ordinary legislative procedure with changes possible and outcome uncertain (approx. 18 months)
- Adoption into national laws and enforceable: Best case, late 2026 or early 2027
The proposed Green Claims Directive would put in place new requirements for substantiating, verifying, and disclosing evidence for environmental claims.
While the proposal is a departure from initial plans for the legislation that would have mandated exclusive use of the Product Environmental Footprint (PEF) method to support claims, the proposed Directive nonetheless represents a paradigm shift in the realm of environmental marketing and communication.
- Every environmental claim made about a product must be supported by an assessment that meets explicit criteria
- Each claim must then be verified by an independent third-party verifier with a certificate of conformity issued before the claim is made to consumers
- That certificate will then be valid across the EU, providing increased certainty to businesses that today must navigate a fractured and uncertain regulatory environment
- Finally, details of the assessment and the certificate itself must be disclosed and linked alongside the claim, providing consumers and regulators with a reliable way to instantly inspect claim credibility and detect violators
In short, the Directive would mark a welcome end to the practices of many marketers who make far-reaching environmental claims based on limited, self-assessed evidence that is shielded from consumers.
At the heart of the proposed Green Claims Directive are three core elements: Assessment, Verification, and Disclosure. Each of these operate to ensure that claims are robustly supported and easily confirmed by consumers and regulators.
Each claim must be supported by an assessment which meets many criteria, including, among other things (Art. 3):
- Must rely on widely recognized scientific evidence, use accurate information and take into account relevant international standards
- Must demonstrate that impacts subject to the claim are significant and not trivial
- Must take into account all environmental impacts which are significant to assessing the environmental performance of the product
- Must provide information on whether the product or business performs significantly better than what is common practice
- Must identify whether the impacts that are subject to the claim would lead to significant harm in relation to impacts on climate, resource consumption and circularity, water and marine resources, pollution, biodiversity, or animal welfare
- Must separate out any greenhouse gas offsets from the claim and provide thorough information about the type and integrity of the offsets used
- Must include primary information when available and quality secondary information when not
After carrying out the supporting assessment described above, each claim and underlying assessment must then be reviewed and verified by an accredited, independent third-party verifier to confirm that the criteria above and other requirements are met (Arts. 10, 11). The verifier shall then issue a certificate of conformity, which must be recognized in all member states as evidence of compliance with the Directive. This adds a measure of certainty for businesses by limiting the ability of different jurisdictions to apply the law in a conflicting manner.
The certificate of conformity, along with a summary of the assessment and other detailed information about the basis of the claim, must then be disclosed and made available to the consumer together with the claim, in the form of a link or QR code (Art. 5). This requirement ensures that consumers and regulators alike have instant access to evidence that supports the claims, which marks a stark departure from the current legal framework where businesses must hold such evidence but need not affirmatively disclose it to the public, which has made enforcement challenging and led to the proliferation of greenwashing.
The proposed Directive would also set new requirements for a number of other issues, including strict requirements on environmental labeling schemes (Arts. 7, 8) and criteria for making comparative assessments and communications (Arts. 4, 6).
Outlook and Timeline
The proposed Directive is not yet law. It must now make its way through the EU legislative process, which will likely result in changes to the requirements, a process that takes at least 18 months on average. Once the Directive itself enters into force, it must then be adopted into member state law, which means an additional two years after finalization at the EU level before the requirements will fully apply (Art. 25).
The proposed Directive will be broadly applicable but has exceptions for “microenterprises” (i.e., those with fewer than 10 employees and annual turnover of EUR 2 million or below (Art. 3). For these entities, compliance with the substantiation requirements is voluntary given their expected cost burden (both to conduct the assessment and obtain independent verification).
Are You Sharing Details of the Green Claims Directive with Your Team?
Review the information provided here by Vaayu’s Climate Strategy team and share this free resource to plan for it with your team.
The retail industry is facing an evolving regulatory environment, and businesses today must adapt to successfully navigate it. At Vaayu, we’re continuing to support our retail partners and the wider industry throughout these changes, both now and in the future. Get in touch to find out more.