Understanding EU Sustainability Claims Regulation
Introduction: What Are EU Sustainability Claims?
The EU Green Claims Directive is a proposed regulation aimed at eliminating greenwashing, and ensuring consumers can confidently trust information about a product's environmental impact. Companies need to provide clear, verifiable, and science-based environmental claims. This includes claims about goods, services or the company itself that claim positive environmental impacts.
Sustainability claims refer to statements made by businesses about their environmental performance, such as carbon footprint reduction or resource efficiency improvements.
The directive is part of European Green Deal and currently in the approval process and could take effect as early as 2026. Once implemented, companies will need to review and validate their sustainability claims to avoid penalties.
Importance & Target Audience
Businesses: any large company and small and medium-sized enterprises (SMEs) that sell products or services in the EU that makes sustainability claims. SMEs are given a longer transition period, but they are not exempt. Failure can lead to compliance costs, reputational damage, and potential legal issues.
Consumers: Consumers benefit from truthful information as it helps them make informed purchasing decisions.
Requirements and Implications
1. Evidence-Based Environmental Claims
Companies must provide scientific evidence to back up any voluntary environmental claims about their products, services, or business practices.
Claims should be based on recognized environmental impact assessments and include relevant data.
2. Clear and Transparent Communication
Environmental claims must be precise, clear, and not misleading to consumers.
Companies should specify which part of the product or process the claim refers to (e.g., packaging vs. full product lifecycle).
Comparisons with other products must be fair, verifiable, and based on equivalent data.
3. Independent Verification
Before publication, environmental claims and labels must be verified by an independent, accredited third-party body.
This verification ensures compliance with the directive’s requirements and prevents deceptive marketing.
4. Requirements for Environmental Labels
The directive establishes strict criteria for eco-labels to prevent misleading or vague labels.
New private environmental labels will only be allowed if they provide added value compared to existing ones.
Labels from third countries must also meet EU standards.
5. Avoidance of Generic or Unclear Claims
Terms like "eco-friendly," "green," "carbon-neutral," or "climate-positive" cannot be used unless supported by robust evidence and clear methodology.
Claims based on carbon offsetting alone are restricted unless the company provides full transparency.
6. Regular Updates and Compliance Checks
Companies must ensure that their environmental claims remain up to date with the latest scientific knowledge.
EU authorities will conduct market surveillance to check for compliance and penalize non-compliant businesses.
7. Consumer Protection and Legal Consequences
False or misleading green claims can lead to legal consequences, including fines, bans, or mandatory corrections.
Consumers have the right to report misleading claims and request accurate environmental information.
Six steps to start meeting the Green Claims Directive:
Understand the requirements Begin by thoroughly reviewing the Green Claims Directive and any relevant guidance. Make sure you grasp the core elements—such as substantiating claims, applying standardized methods, and verifying data.
Audit existing claims Take stock of your current environmental and sustainability statements. Assess whether each one is backed by credible evidence or certifications, and remove or revise any that aren’t properly supported.
Gather and verify data Partner with independent third parties or recognized certification bodies to bolster the credibility of your claims. This ensures your sustainability assertions can stand up to regulatory scrutiny.
Align communication with action Clearly communicate how your environmental promises match real steps you’re taking - whether that’s investing in greener processes, sourcing eco-friendly materials, or measuring impact. Transparency builds trust.
Stay informed and proactive Keep pace with regulatory updates, industry standards, and best practices. Continuously refine your policies and messaging to stay ahead of evolving expectations and maintain credibility.
Leverage established guidelines Finally, take advantage of the ICC guidelines and checklist to ensure your environmental and climate-related communication meets recognized standards and resonates with stakeholders.
Further Reading & References
Conclusion
Compliance with sustainability claims regulations is essential for businesses to maintain trust, meet climate goals, and drive sustainable development. By understanding these requirements and utilizing available tools, companies can ensure their claims are truthful and beneficial to consumers, stakeholders and the environment. Note: Source for illustrations are from the video EU measures to tackle greenwashing.
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