The European Commission presented its proposal for a Directive on substantiation and communication of explicit environmental claims (the “Green Claims Directive”) on 22 March 2023. The proposal targets green washing and misleading environmental claims by setting minimum requirements on the substantiation and communication of environmental claims and environmental labelling in B2C commercial practices.
The proposed rules aim to allow consumers to make informed environmental choices and receive reliable, comparable and verifiable information on products. At the same time, the objective is to establish a level playing field for the environmental performance of products in the EU.
The proposed rules would apply to situations where companies make voluntary claims about the environmental impacts, aspects or performance of their products or services or about the company itself. To avoid a disproportionate impact of the requirements on smaller enterprises in comparison to larger ones, microenterprises that have fewer than 10 employees and a turnover of less than EUR 2 million are exempt from the obligations set out in the proposal in terms of substantiation and communication requirements linked to the substantiation assessment.
The proposal for the Green Claims Directive constitutes one part of a two-part legislative package entitled ‘Consumer protection: enabling sustainable choices and ending greenwashing’. The other part purports to establish a series of common rules that will promote the repair of goods.
Obligations of companies that make green claims
If the proposal for the Green Claims Directive is approved, the companies that wish to make green claims will have to abide by the following obligations:
- Claims must be substantiated with scientific evidence that is widely recognised, identifying the relevant environmental impacts and any trade-offs between them;
- If products or organisations are compared with other products and organisations, these comparisons must be fair and based on equivalent information and data; and
- Information on the substantiation, e.g. certificates of conformity, must be made available together with the claim in a physical form or in the form of a weblink, QR code or equivalent. The proposal also regulates how certain types of claims, e.g. claims concerning phase and future performance, must be communicated.
It is worth noting that the minimum level of requirements for green claims set out in the proposal overlap to a certain extent with the existing Finnish Consumer Ombudsman’s guidelines on the use of environmentally oriented claims in marketing. The guidelines do not impose any requirements on companies that exceed statutory requirements, but rather clarify how the supervisory authority applies the law.
Other key changes put forward in the proposal for the Green Claims Directive
The Member States will be responsible for setting up verification and enforcement processes that will be performed by independent and accredited verifiers. Verification will be carried out by a third-party conformity assessment body accredited for the purpose of verifying compliance with the proposal. This verification takes place before the claim is published. In connection with the verification of each claim, the verifier will issue a certificate of compliance recognised across the EU.
The Member States will also need to designate competent authorities responsible for the enforcement, establish a penalty regime for non-conformity and ensure access to a court.
Environmental labelling schemes will have to be established under EU law after the proposal’s entry into force. Environmental labels must be transparent, verified by a third party, and regularly reviewed.
Right to repair
The EU Commission has simultaneously published a proposal for a Directive on common rules promoting the repair of goods. Pursuant to the proposal, consumers will have a right to request the seller to repair products that are subject to reparability requirements under EU law. The aim is to encourage producers to develop more sustainable business models by ensuring that their products are reparable.
Under the proposal, sellers would be obliged to offer repair services of goods to consumers within the legal guarantee, unless replacement is a cheaper option. Outside the legal guarantee, the proposal would establish the following new measures to make repair available for consumers:
- Consumers will have a right to demand repair as the first remedy from producers for products that are repairable;
- An obligation for producers to inform consumers about the products they are obliged to repair;
- An online matchmaking repair platform to connect consumers with repairers and sellers of refurbished goods;
- A European Repair Information Form to enable consumers to compare repair offers more easily; and
- A European quality standard for repair services to help consumers identify repairers who commit to a higher quality.
Both proposals for directives support the objectives of the European Green Deal. Both proposals also play an important role in delivering on the circular economy objectives defined in the Circular Economy Action Plan of the EU.
Following the ordinary legislative procedure, both Directive proposals are subject to the approval, as well as possible amendments, of the European Parliament and Council. If the Directives are adopted, each Directive is proposed to be implemented by the Member States within a period of two years after the Directive has entered into force.
Borenius’ lawyers are available to assist in addressing any questions you may have regarding the matter.