The EU is transforming the green claims landscape
It’s easy to claim a product or service is greener than others. It’s more difficult to prove it.
The European Commission has begun to prioritize firmer regulations and checks on companies who make “green claims” about the positive – or less damaging – environmental impact of their products. According to the Green Deal passed in March 2020, “companies making ‘green claims’ should substantiate these against a standard methodology to assess their impact on the environment”.
But backing up green claims is still a minefield right now. Different ways of measuring sustainability lead to a cluttered landscape and problems comparing results.There are currently over 200 environmental labels active in the EU as well as more than 80 key reporting methods for carbon emissions alone – and some are more reliable than others.
This information overload makes life difficult for consumers trying to make informed choices, for organizations trying to determine the best sustainability strategy, and for countries and societies trying to meet climate and energy efficiency goals with the ultimate aim of achieving climate neutrality by 2050. Without a proper framework to evaluate and substantiate green claims, it’s easy for “greenwashing” to happen: companies could make false, misleading or deliberately vague claims about their commitment to sustainability.
Several new EU policies are in development to address these issues and support industries in developing, measuring and communicating sustainable practices. In 2020, the Commission presented the Sustainable Products Initiative and the New Consumer Agenda, which include legislation by the Directorate-General for Justice and the Directorate-General for Environment, the departments heading up the effort to tighten green claims. Stakeholders have the opportunity to provide input in Q1-Q2 2021, which the EU Commission will take into consideration before it publishes draft legislation on both green claims and empowering consumers in the second half of the year.
A game-changer for sustainability communications
This will change the game entirely. The policy accelerates the race to sustainability and reminds companies that environmentally-friendly practices are no longer extras. Instead, they are necessary to compete and thrive in the new consumer environment promised by the Green Deal and Circular Economy Action Plan. This requires a radical rethink of organizational sustainability, from design and development to manufacturing and marketing. To comply with new regulations, firms will have to reframe every aspect of their communication with consumers.
This article will help you to navigate the choppy, changing waters of green claims policy, with an overview of key players and initiatives. For more in-depth advice on preparing your company for the shift, get in touch with Ohana Consultancy. We specialize in staying on top of emerging legislation and developing effective sustainability strategies.
Who, what and when: the new initiatives in a nutshell
The new initiatives by DG-Justice and DG-Environment respond to requests from industry and member states to clarify, substantiate and incentivize green claims. Though the legislation offered might not overlap on paper, both Directorate-Generals are in close contact so that the initiatives complement each other to achieve their shared climate goals.
The New Consumer Agenda aims to empower and protect
DG-Justice is focused on empowering consumers with sustainability-focused initiatives announced in its New Consumer Agenda. The Agenda seeks to protect consumer rights as well as to support European consumers to “be empowered to make informed choices and play an active role in the green and digital transition whenever and wherever they are in the EU”. The Commission will hold consultations on the content, so that stakeholders can have their voices heard and influence the final Agenda.
The Agenda draws on the Circular Economy Action Plan and tackles growing consumer concerns around products’ negative environmental impacts and the waste produced by throwaway goods or products that quickly become obsolete. The sustainability initiative fights early obsolescence and promotes durability, recyclability and repairability of products. This will require a radical overhaul of how goods are produced and marketed. Consumer expectations will change. More and more customers will expect to buy a service, rather than just a product, including replacement, repair, and re-use – and brands will need to communicate the sustainability service they provide.
Another core focus is providing consumers with better and more reliable information on product sustainability. Building on the EU Ecolabel, the agenda calls for standardized and effective product labelling practices. It also highlights the role of digital tools in empowering consumers to compare products according to sustainability criteria and check the reliability of green claims.
This consumer-centric legislation is Lex-Generalis, meaning it provides a general framework of rules and acts as a safety net for issues not directly addressed by more specialised law.
Measuring product sustainability
Stakeholder consultation took place in late 2020 on DG-Environment’s initiative, which focuses on substantiating green claims and improving the environmental performance of goods, and the draft publication is expected in mid-2021. The policy establishes product sustainability principles to measure the impacts of goods, primarily through life cycle analysis methodologies including Life Cycle Assessment and Product Environmental Footprint Category Rules. However, there are concerns among several stakeholders, including both NGOs and industry players, that this Life Cycle Analysis focus is too limited, and that it fails to provide a framework for evaluating green claims more generally.
This detailed legislation is Lex-Specialis. It has a narrower scope, governs specific product claims, and will be the prevailing legislation on the topic.
The initiative aims to make sustainable products the norm by addressing three obstacles in the current landscape:
- A lack of reliable sustainability information on products
- No comprehensive, unified set of products requirements
- Insufficient incentives for sustainable production
The part that deals with green claims focuses on improving information flow to communicate product sustainability to consumers. It establishes EU requirements for mandatory sustainability labelling and looks at different possibilities for communicating environmental impact, for example through labels that compare a product’s performance with the average.
Digital information flow is also a key area for improvement through increased use of digital passports – which trace the journey of goods across the entire value chain – as well as other tools like tagging. A new piece of legislation within the Sustainable Product Initiative will deal with this process in more depth, with consultation for this sub-initiative expected to open in early 2021.
So what does this mean for companies?
Companies should prepare to radically rethink their sustainability communication and marketing practices. They will need to get serious about implementing circular environmental practices at every stage of development and commit to full transparency in sharing their sustainability performance throughout the value chain with consumers. Organizations will need to stay on their toes and keep up with the latest EU policy to market their goods and stay competitive in a changing consumer landscape.
A good public affairs consultant can translate complex policy into effective corporate sustainability strategy. Ohana Consultancy can streamline the process of making impactful, reliable green claims.