LEAK: EU to slap penalties on companies making false green claims
EU member states will be in charge of imposing “dissuasive” penalties on companies making unsubstantiated environmental claims about their products under a draft new EU law, seen by EURACTIV.
The aim of the proposal, due to be tabled by the European Commission in the coming weeks, is to help consumers make better-informed choices about the products they buy.
Whether “green”, “eco” or “environmentally friendly” – almost half (40%) of the environmental claims made about products are “unsubstantiated”, the Commission says in the draft.
“Consumers lack reliable information about the sustainability of products and face misleading commercial practices like greenwashing or the lack of transparency and credibility of environmental labels,” the EU executive writes in a preamble to the draft law.
“Companies making ‘green claims’ should substantiate these against a standard methodology to assess their impact on the environment,” it adds, referring to the EU’s flagship Green Deal agenda, adopted in 2019.
To ensure green claims are demonstrated, EU member states will be requested “to set up a system of verification for the substantiation of environmental claims” that will have to be carried out by “independent verifiers”.
Most importantly, EU countries will be put in charge of ensuring that “those rules are enforced” and introduce “penalties” on offenders that “should be effective, proportionate and dissuasive,” the draft says.
Penalties should be established based on common criteria, it continues, saying those should include “the nature and gravity of the infringement” as well as “the economic benefits derived” from it and the potential environmental damage caused.
Campaigners applauded the move, saying it is “paramount that member states set high enough penalties” in order to discourage companies from breaking the law.
“It is encouraging that the Commission intends to greatly enhance the role of market surveillance authorities in fighting greenwashing,” said Dimitri Vergne from BEUC, the EU consumer organisation.
“We strongly hope this proposal remains in the final version,” he told EURACTIV, stressing that the draft directive “is a moving target” which is still likely to change before it is published.
Environmental footprint methodology
The Green claims directive was expected to be published last year but was delayed several times because of a lack of consensus on methodologies to verify environmental allegations.
There are more than 200 active ecolabels currently used in the EU – each of them relying on different measurements and methodologies.
Much of the debate centres on the Product Environmental Footprint (PEF) methodology, which the European Commission wants to extend gradually across a wider range of products.
The PEF methodology aims to calculate the environmental impact of a product over its lifetime. Several of them have been developed for different product groups like textiles, food, or packaging.
But some PEF methodologies have been contested because they do not always reflect all aspects of sustainability.
On packaging for example, glass producers have complained that the envisaged PEF methodology was overly focused on CO2 emissions without taking into account the fact that glass can be recycled over and over again. Meanwhile, other benefits of glass, like the absence of toxic chemicals in its composition, were not duly reflected, according to the European federation of glass packaging makers (FEVE).
Consumer groups agree, saying the PEF method would give consumers an incomplete picture of a product’s impact on the environment.
“So we welcome that the Commission acknowledges this method’s shortcomings,” Vergne said. “For instance it is great news for consumers that the Commission plans to ban green claims for products containing hazardous substances.”
Accepted methodologies to be written down in law
The European Commission took account of this feedback, saying it “considers it judicious to leave more flexibility to businesses” when it comes to choosing the right methodology to substantiate environmental claims.
At the same time, the EU executive says it will continue work to develop PEF methodologies for specific product groups, citing “apparel, marine fish, synthetic turf, cut flowers and potted plants,” as well as “flexible packaging”.
Once developed and approved by EU expert groups, these PEF methodologies and corresponding labelling schemes will be set in stone and made legally binding across the EU via implementing rules known as “delegated acts”.
Campaigners support the move but warn against giving businesses too much flexibility on the choice of methodology, saying this decreases legal certainty for companies.
“Claims should only be made based on legally recognised methodologies,” said Margaux le Gallou from ECOS, a non-profit group working on environmental standards.
“All other claims should be banned,” she added, saying “it is better to have no claims than claims based on poor methodologies” because otherwise it gives an unfair advantage to the company making the allegations.
And to discourage offenders, ECOS supports a combination of fines and naming and shaming. “Penalties work: the Dutch authority sanctioned both Decathlon and H&M for their environmental communication, and both changed their approach at group level, not only in the country where they were sanctioned,” le Gallou said.
Pressure is building up on EU governments to regulate advertising based on environmental criteria.
In August last year, France became the first country in Europe to ban adverts for fossil fuels, following the entry into force of a new climate law adopted the year before.
Campaigners have stepped up the pressure too by hacking advertising billboards across Europe to protest against environmental claims made by car manufacturers, which they say are misleading.