Greenwashing is back on the agenda after the Council of the European Union, following various discussions and exchanges of opinions, adopted on June 17  its position (‘general approach’) on the Green Claims Directive, which aims to address greenwashing and help consumers make truly greener decisions when buying a product or using a service (see at https://www.consilium.europa.eu/en/press/press-releases/2024/06/17/green-claims-directive-council-ready-to-start-talks-with-the-european-parliament/).

It is the last effort to influence to some extent the course of the next legislative phase, which will be managed by the newly elected Parliament.

Directives are approved by the Council and the European Parliament, on proposals from the Commission, and in this case, the Council chose to issue “general guidelines” to give the newly elected Parliament an idea of its position on the legislative proposal submitted by the Commission. This should speed up the legislative procedure and make it easier to reach an agreement.

This Directive aims to reduce the risk of “greenwashing” by laying down clear requirements for the substantiation and proof of explicit environmental claims.

These claims must be supported by concrete and verifiable data to avoid misleading consumers.

For some years now, the European Commission has in fact highlighted how difficult it is today for consumers to make sense of the numerous labels on the environmental performance of products (both goods and services) and companies.

“Environmental claim” means, in the context of commercial communication, any message or statement which is not mandatory under Union or national law, in any form, including text and figurative, graphic or symbolic representations, such as trademarks, brand names, company names or product names, which claims or implies that a given product, product category, brand or economic operator has a positive or zero impact on the environment or is less harmful to the environment than other products, product categories, brands or economic operators or has improved its impact over time;

After a 2021 screening of 344 suspect environmental claims, it was found that in 42% of the cases they could be false and misleading and amount to an unfair trade practice.

The EU has therefore decided to tackle greenwashing and protect consumers and the environment, in a context where some environmental claims are unreliable and consumer confidence is extremely low, and it is doing so through a package of legislative proposals.

Of the various regulations that are already part of this package, Directive No. 2024/825,[fa1] amending Directives 2005/29/EC and 2011/83/EU as regards empowering consumers for the green transition by improving protection from unfair practices and information, approved on February 28, 2024  (see at https://eur-lex.europa.eu/legal-content/en/TXT/?uri=CELEX%3A32024L0825) is certainly significant. This and many other ongoing legislative initiatives are aimed at the overall goal of achieving climate neutrality in the EU by 2050.

Since Directive No. 2024/825 is not directly applicable in the EU Member States, it is only by March 27, 2026, that the Member States need to adopt and publish the necessary measures to comply with the directive, and inform the Commission as soon as they have done so. They will then apply these provisions as from September 27, 2026.

The changes that will be introduced to the legislation on general consumer protection are varied, but certainly the most important one is the specific inclusion among misleading actions of those relating to environmental or social issues, as well as those regarding aspects of the circular economy,such as durability, reparability or recyclability. And to leave no room for doubt, five new unfair commercial practices have been introduced into the general legislation.

After the general legislation, the time is finally coming to define the specific legislation, the one that will lay down detailed standards regarding certification and regarding communications made by companies of their voluntary and explicit environmental  claims.

Having reviewed the initial proposal and while we await the final text for a more detailed analysis, we can summarise a few aspects that the Council hopes will be introduced in the final text of the Greenwashing Directive.

In the new version, it has been clarified that business-to-business (B2B) commercial practices do not fall within the scope of the directive, which therefore does not regulate the consequences of enforcement measures in the context of B2B contractual relationships between retailers and manufacturers.

A distinction was made between:

• “explicit environmental claim”, i.e. an environmental claim made in written or oral form, including by audiovisual means, excluding environmental labels;
• “environmental label”, a sustainability marking that exclusively or predominantly relates to the environmental characteristics of a product, process or operator.

Companies should use clear criteria and the latest scientific evidence to substantiate their claims and labels. Furthermore, environmental declarations and labels should be clear and easy to understand, with specific reference to the environmental characteristics they refer to (such as durability, recyclability or biodiversity).

The Council’s general approach maintains the basic principle of ex-ante verification of explicit environmental declarations and environmental labels, as envisaged in the Commission’s proposal. This means that every environmental statement will have to be verified by independent experts before being published.

At the same time, it introduces a simplified procedure to exempt certain types of explicit environmental declarations from third-party verification.

The scope of the directive was also extended to include micro-enterprises. Although it has been specified that the Commission will have to adopt measures to help both SMEs and micro-enterprises to comply with the burdens that the directive will impose, for example the obligation to certify environmental claims through an accredited certification body,. a number of issues still remain. 

In fact, the costs and effort that companies will have to invest in order to certify or prove the truthfulness of their claims  raise some concerns from the perspective of fairness and accessibility to such certification systems. If  small or even micro enterprises may find it it difficult to access the certification system, then they may be at a competitive disadvantage compared to large companies, which will be able to promote their products on the market through the use of green claims.

This could lead to a form of discouragement on the part of small and micro-enterprises, to the point where they might desist from using green claims with regard to their products and/or services, and even refrain from investing in innovation in the area of environmental sustainability, thus causing a diametrically opposite effect to that outlined in the introduction to the proposed Green Claims Directive.

All that remains is to wait for the final approved text and the measures the Commission will take to avert these risks.