The Green Claims Directive

In March 2023, the European Commission adopted the Proposal for a Directive on substantiation and communication of explicit environmental claims (Green Claims Directive). The proposal is one of the most influential additions to the European Green Deal and follows a previous directive aimed at empowering consumers for the green transition. Its main goal is to tackle unfair and unclear communication about environmental performance.

The Green Claims Directive is still in the negotiation phase, with EU countries expected to implement its requirements into law by 2027. But what does this directive mean for a company’s sustainability strategy and marketing practices?

The Green Claims Directive applies to explicit environmental claims made by traders in business-to-consumer commercial practices. Any claim in the form of a text, label, or sign, implying positive impact on the environment or reduced negative environmental impact, and targeting a consumer, would fall under the Green Claims Directive. Claims based on the existing regulations (e.g. energy labels), or existing labelling schemes compliant with the directive, are exempted from the scope.

The directive applies to those selling products to consumers directly, excluding micro-enterprises (companies with fewer than 10 employees and an annual turnover < € 2 million). Small and medium-sized enterprises (SMEs) are required to comply, though member states may offer them additional support and a longer transition period. Manufacturers not supplying products directly to consumer markets do not fall under its scope. However, it is reasonable to assume that if manufacturers wish to promote a green product in their portfolio, they have better positions if they supply traders with the substantiations.

The rules for the claims you are making are straightforward:

1. Cover only aspects, impacts, and performance that are identified and verified as significant.
2. Specify if the claim is related to the whole product, part of a product, or certain aspects of a product.
3. If the use stage is relevant to the performance, you shall provide the use stage information used to achieve the claimed performance.
4. If the claim relates to the future, it must have a time-bound commitment.
5. The expression of different types of impacts in a single score (such as points, stars, etc.) is not allowed unless the applied scheme is under the European Union law rules.
6. All claims shall be verified by an accredited verifier, and have a certificate of compliance before placing the product with the claim on the market.
7. Claims shall provide the necessary background information for substantiation. A link or a QR code can be used.
8. Comparison with a product not on the consumer market or a company’s own product is not allowed unless proven that the improvement is significant and was realised in the last 5 years

You must substantiate all your environmental claims. That means conducting a fair, accurate, scientifically solid study with an accompanying comprehensive report on it. The study and the report must examine and validate that you:

• consider all significant environmental aspects or impacts
• demonstrate that the impacts, aspects, or performance in the claim are significant
• demonstrate that what you claim goes beyond regulatory requirements
• provide information on whether claimed performance is significantly better than common practice
• Identify if and how they achieved better performance in the claimed aspect and increased harm in other aspects
• Include necessary primary information or, when not possible – relevant secondary information
• In claims on greenhouse gas (GHG) emissions: separate any offsets from GHG reductions, describe the reliability and correctness of the offsets and if they relate to reductions or removals
• For comparative claims: prove that the two products compared are assessed on equivalent data sources, data quality, scopes and coverages, and assumptions

In general, all the aspects of substantiation hint at the application of life cycle approaches in the respective study. The most common method to analyse the environmental impact of products is Life Cycle Assessment (LCA). Although not all environmental aspects can be analysed with LCA, it is clear that life cycle thinking needs to be adopted to meet the requirements of the Green Claims Directive.

Before being put on the market, the claims and the substantiating studies need to be verified by an accredited independent third-party reviewer. A certificate, recognised across the EU, will be publicly available, and include information about the reviewer. Currently, it is not clear which bodies will take on accreditation (this will be decided by the member states), and the pool of potential reviewers is unknown.

When a claim is published on the market, adherence to the Green Claims Directive will be monitored by the member states, the European Commission, and the public. Anyone will be able to submit a substantiated complaint about a claim, which would then be investigated by the authorities assigned by the states. If found breaching the directive, the trader putting out the claim can face serious consequences, including fines, confiscations of revenues, and exclusion from public procurement.

The existing labels can stay, as long as they comply with the requirements:

• On the claims (see above);
• On the organisation and management of the labelling scheme.

Any new labelling scheme shall be:

• Approved by the Commission (public) or Member state(s) (private);
• Meet the requirements on the claims quality, scheme organisation, and management;
• Certified by an independent reviewer;
• Proven to have added value, e.g. specific coverage of a certain product group or sector.

In June 2024, the European Council adopted its position (‘general approach’) on the green claims directive. This will form the basis of negotiations with the European Parliament regarding the final shape of the directive. When negotiations are done, member states will have 18 months to transpose the directive, and 24 months to launch it full force. After that, the Commission will start a 5-year run in monitoring the effectiveness of the directive. If found that the claims and labels are still misleading or incomparable, additional and more detailed rules can be expected.

In June 2024, the European Council adopted its position (‘general approach’) on the green claims directive. This will form the basis of negotiations with the European Parliament regarding the final shape of the directive. When negotiations are done, member states will have 18 months to transpose the directive, and 24 months to launch it full force. After that, the Commission will start a 5-year run in monitoring the effectiveness of the directive. If found that the claims and labels are still misleading or incomparable, additional and more detailed rules can be expected.

The Green Claims Directive highlights the importance of substantiating your environmental claims. At Ecomatters, we can support you with:

• The completion of comprehensive background studies to validate your environmental claim
• Assessing your current claims to ensure they are correct, clear, specific, and complete
• Advising on when you should, and should not, make a claim
• Identifying potential claims that you could make based on evidence
• Running workshops on sustainability for your product managers and marketing specialists

If you would like to discuss support with making green claims you can contact us or plan an appointment with one of our experts.