Consumers want to hear how brands are transforming both their products and operations. In fact, 90% of consumers indicate it is important for brands to talk about their sustainability programmes. But the EU has found that over half of current communications are vague, misleading or unfounded, leading to a suite of regulatory changes designed to tackle greenwashing and promote clear communication.
The Directive on Empowering Consumers for the Green Transition (nicknamed the greenwashing directive) updates existing directives on consumer rights, tightening the rules on unfair and misleading claims. It also obliges manufacturers trading in the EU to provide clearer information on how long a product is expected to last, including whether the company only plans to support the software used for a defined period. It should also be clear whether the product is repairable. Approved in February 2024, the directive came into force a month later and will be implemented across the EU over the next two years.
The greenwashing directive will be followed by a second directive — the Green Claims Directive — which is currently making its way through the European Parliament. The directive will further tighten the rules on what companies can and cannot say about the green credentials of their products and how to verify those claims. There are also hefty penalties for companies falsely marketing their products — the regulation allows for fines of at least 4% of company turnover in the EU Member State where infringement occurs.
Here are Context’s top tips for avoiding greenwashing in your product communications and updating your strategy.
1. Be specific
Generic and vague statements are out, and highly specific claims are in. The greenwashing directive includes a raft of phrases to avoid, including ‘green’, ‘ecofriendly’, ‘kinder on the environment’ and ‘more environmentally friendly’.
It also prohibits claims relating to the entire product or company. Your company needs to be specific about how you have improved your products and services, e.g. made from organic cotton on an item of clothing.
Terms such as ‘energy efficient’ or ‘biodegradable’ should not be used without clarification, e.g. that a product is certified to be more energy efficient than the previous version or packaging is biodegradable in a home compost bin.
Any claim needs to be clearly evidenced. Specific, but inaccurate or unsubstantiated claims will fall foul of the Green Claims Directive. It focuses on the accuracy of explicit claims, e.g. that a product is made from 30% recycled plastic or cotton.
2. Be clear on lifecycles
Consumers need to know how long a product should last. That means providing clear information on whether the product is repairable and how long your company plans to support the current generation of software, e.g. the operating system used in a mobile phone.
The greenwashing directive has also set its sights on false claims around durability. For example, you cannot claim a washing machine will last for 50,000 washing cycles if it is only achievable in precise laboratory conditions.
3. Move beyond offsetting
The greenwashing directive specifically calls out claims such as ‘carbon neutral’ or ‘reduced climate impact’, which are based on offsetting alone. You must demonstrate that you have reduced the emissions related to the product and the extent of the reduction.
Offsetting can still be used as part of a wider carbon reduction strategy, e.g. to balance unavoidable emissions as part of a net-zero strategy. It cannot be the default solution, compensating for a lack of action.
4. Go above and beyond
Companies should avoid taking credit for actions that are required by law.
For example, manufacturers of coffee or chocolate cannot claim that their products are ‘deforestation free’ — they have to be. Under the Deforestation Regulation, there has been a ban on selling core commodities produced on recently deforested land since June 2023. This applies to cattle, wood, cocoa, soy, palm oil, coffee and rubber and their derivative products.
In this regard, the greenwashing directive reinforces provisions under the Ecodesign for Sustainable Products Regulation. Rolling out in waves from 2024, the regulations establish design principles relating to the durability, reparability and reusability of products, initially electrical goods such as washing machines and mobile phones.
The regulations also pave the way for the EU to introduce mandatory requirements on the amount of recycled material in a product. If it became a requirement to include 30% recycled material in a product, you could no longer advertise a product as containing 30% recycled plastic. You could only make a claim by exceeding this figure.
5. Say ‘goodbye’ to voluntary labels
The EU has identified over 200 sustainability labels and another 100 green energy labels in use across the region — some backed by very stringent standards and others requiring very little verification. The greenwashing directive heralds a clean-up of product labelling, limiting on-pack logos to accredited schemes backed by approved third parties and public bodies. Companies cannot create or maintain their own labelling schemes.
6. Collate evidence
Claims must be based on sound science or the latest technical knowledge and independently reviewed.
In most cases, you will need primary information collected from direct tests on the product. Data cannot be more than five years old. Secondary information is only acceptable in rare instances where direct data are unavailable.
There should also be clear evidence that the product performs significantly better than both what is required by law and what is common practice in the market. Improvements in one area should not lead to greater negative impacts in another, e.g. a shift to recyclable packaging resulting in far higher production or transportation emissions.
7. Be mindful of comparisons
When improving on a previous product or going above and beyond competitors, it is natural to want to make comparisons. Again, the Green Claims Directive sets out what is a fair comparison.
You cannot claim a product has a lower carbon footprint than a competitor or previous version if the two assessments are based on different methodologies or one analysis covers production emissions and the other takes the full supply chain into account.
8. Seek accreditation
Only recognised providers will be able to provide accreditation. When looking for accreditation seek out established, independent and well-respected organisations. They should also have an international reach. The EU Ecolabel is considered the official standard for products. The Eco-Management and Audit Scheme, or EMAS, is the bar for measuring company sustainability initiatives.
The Green Claims Directive seeks to further whittle down the sustainability labels in use in the EU by establishing rules on approved verification and labelling schemes, including how they assess qualification for an award, minimum requirements for transparency and the process for submitting complaints.
It also limits creation of new national or regional schemes, with the view to making EU-wide programmes the standard. To be approved, new schemes will have to offer something extra to the plethora of independent assessments currently available.
The Green Claims Directive focuses specifically on product communications. It does not cover corporate sustainability reporting, but reinforces the need for fair and accurate sustainability communication at all levels, in line with the EU Accounting Directive or the Corporate Sustainability Reporting Directive.
Context supports companies to assess develop, communicate and implement effective sustainability strategies at the company and product level. If you’d like to chat about your organisation’s needs, please get in touch via www.contextsustainability.com or helen.fisher@contexteurope.com (Context Europe) / lisa.nelson@contextamerica.com(Context America).
