What is the Green Claims Directive?
EU intends to tackle the growing problem of greenwashing and misleading product information. The proposed Green Claims Directive is a way to increase transparency and trust in relation to environmental claims. How will businesses and their way of communicating be affected? Gisela Lindstrand, Interim Head of Sustainability and Communications at Stena Metall, explains.
The term greenwashing was first used in the 1980s and implies any dishonest practices used by businesses to represent themselves as more sustainable; either by giving a false impression or providing misleading information as to the sustainability of a product or service. The proposed Green Claims Directive aims to make product labeling clearer and more trustworthy by banning the use of general environmental claims like “environmentally friendly”, “natural”, “biodegradable”, “climate neutral” or “eco” without proof.
“By proposing a Directive on Green Claims EU wants to protect consumers from misleading marketing practices and help them make better purchasing choices,” says Gisela Lindstrand.
Must prove environmental claims
The Green Claims Directive is proposed to include clear criteria on how companies should prove their environmental claims and labels, requirements for these claims and labels to be checked by an independent and accredited verifier, as well as new rules on governance of environmental labeling schemes to ensure they are solid, transparent, and reliable.
“The aim is to ensure that consumers are provided with environmental information that is reliable, comparable, and verifiable.”
Impact on communications
Once implemented, the Green Claims Directive will have a large impact on how businesses communicate.
“I advise companies to start already now. A first step is to go through and evaluate all communications, such as marketing, sales materials, corporate communications, investor relations, digital communications, to avoid generic and unproven sustainability comments and statements. All sustainability statements should be based on data and documentation. It is important to have clear and transparent climate targets, along with solid, transparent, and reliable sustainability reporting.”
Penalties if Green Claims Directive is ignored
The Green Claims Directive is yet to be approved by the Council of the European Union. Once adopted, the directive must be implemented in national legislation in the EU member states. They will have 18 months to implement it into national law, with the measures applying 24 months from the date of entry into force.
If the EU Green Claims Directive is not followed there will be penalties. It will be up to the EU member states to lay down the rules on penalties. It says that the penalties should include fines that effectively deprive the company of the economic benefit derived from the use of misleading or unsubstantiated claims or non-compliant labelling schemes. The maximum amount of the penalty should be set at the level of 4 percent of the company’s total annual turnover in the country.
“I am convinced that the Green Claims Directive in the long run will strengthen the competitive advantages for all companies that follow the new directive,” concludes Gisela Lindstrand.
