A sudden rush towards regulating claims of sustainability
In one of the EU Commissions latest screeningson greenwashing in digital communication, 344 seemingly dubious claims were evaluated.
Many claims contained vague, misleading or unfounded information about the environmental impact of a product. Some lacked proof, but could theoretically be proven.
Some aimed even higher with emotional manipulation by vague and general claims like climate positive, pressing the button on today’s hot topic.
Main findings from the 2021 EC screening
We're all aware that talking the talk is easier than walking the walk, and a widespread understanding of what greenwashing means is a testament to that.
There was a definite need to regulate what’s allowed to claim and communicate.
What is the EU Green Claims Directive?
Let’s start with a definition: What is the EU Green Claims Directive and what are the goals?
The goal of the EU Green Claims Directive is to create a common methodology for the substantiation of green claims about the environmental footprint of products, services and companies. The idea is to sort out greenwashing and protect people from paying a premium for fake ‘eco-friendly’ products.
It is an amendment to earlier directives, 2005/29/EC and 2011/83/EU, and it prohibits the use of green claims unless companies and their marketers can provide evidence that the claim applies to the entire lifecycle of the product or service, from manufacture to disposal.
While targeting greenwashing, it affects everyone in the market. True green pioneers have to find a legally secure way to advertise with green claims on products in future – but shall get a tailwind from the regulation – and deceptive claims will hopefully sorted out systematically.
There’s room for differentiation, tho.
The difference between Green Claiming and Greenwashing
Since not all claims are made equal, especially in the regulatory space, there’s a distinction between two types of regulatory violation.
Green Claiming is referring to statements about the environmenal impact of goods and services that could be backed by edivence, and soon have to. These revolve around how the product and it’s parts are manufactured, packaged, distributed, used, and disposed of.
Greenwashing instead refers to an improvable and more general way of using misleading or unsubstantiated communication of a companies green standards and principles to polish their image – or that of it’s products and services – with hardly any actions taken.
Talking about taking action, what do the first drafts of the proposal say about actions to be taken?
1/ Independent Verification of Claims
Time to get all our ducks in a row, mandatory independent audits seem to be on the way.
Those will determine whether the claims your bring up in your communication are substantiated. You won’t be allowed to use sustainability labels that are outside of any established certification system. In other words: You can’t make up your own labels anymore, no matter how neatly your nephew has designed them.
The declared requirements and procedures for monitoring adherence to the eco-label framework must be documented and published. They are required to be accessible – free of charge – in a clear, easily understandable and sufficiently detailed manner.
2/ Independend Monitoring of Progress
Think of claims like climate neutral by 2028 or 100% recycled by 2023.
Sounds unconflicting, right? I mean, we’re only communicating our goals, noone can take that from us. Well, according to the first drafts of the proposal, companies may only make environmental statements with clear obligations and realistic targets, while having an independend monitoring system in place.
To keep up accountability, an annual report on progress and achieved sustainability goals is mandatory. Every five years, the proposal requires a review of the accuracy of environmental claims in relation to the underlying studies and calculations.
If a review calls the accuracy of a claim into question, like a change in the scientific methodology substantiating it, it is to be updated immediately.
3/ Generalized Claims
Think of eco, green, environmentally friendly, CO₂-neutral or climate-positive.
These are the types of claims where the outstanding environmental performance of the company or product, all too often, can not be demonstrated. This is about to be outlawed. For a while, being vague was a safe play – you can’t really be held accountable. Emotional buttons were pushed left and right, trying to nudge people into buying a product that likely talked better than it walked.
Soon, going vague with generalized environmental claims to sell your product becomes a violation of a EU-level regulatory framework.
4/ Pars Pro Toto
The latin phrase pars pro toto means that a part of something is used representatively of the whole.
This has it's place in texting when you evoke a more concrete image in some's head by talking about sheep, pigs and cows instead of farm animals.
In terms of the GCD, it refers to deliberate half-truths, and it’s not hard to imagine how that one went down: We have managed to produce 40% of the product from recycled plastics and it wasn’t easy – so let’s make it subtly sound like the whole thing is recycled!
The part stands for the whole, and it’s not exactly as innocent as using sheep, pigs and cows to get your text more imaginative.
How many sales messages have been phrased just vague enough so that it’s not a full lie, but enough to pinch people's growing conscience around their own environmental footprint? That’s why environmental claims about the entire product, if they in fact only relate to a specific aspect of that product, will be outlawed.
Again, independent auditing is supposed to take care of that.
Asked to pick from both positive and negative environmental impacts of your product – which do you communicate to people?
I thought so. But you won’t be allowed to sell the cherry on a moldy cake.
Companies may communicate the positive claim only if they also communicate the negative impact in a clear and understandable way. For example, if less environmental pollution involves a hefty spike in water consumption, or some positive environmental impact in production leads to a significant negative effect down the line, then both facts have to be disclosed with the claim.
Auditors are supposed to make sure that these claims encapsulate the full picture.
6/ Comparative Claims
Are you doing better than your competitor?
Good, but take care – the upcoming regulation is also expected to include rules on comparative environmental claims.
It’s required that a comparative claim is backed by the same data and methodology on both sides to arrive at the claim, with the most significant stages along the value chain taken into account. For example, if one company makes an environmental claim that only considers direct environmental impacts, but a competitors analysis is more thorough and also considers indirect effects, then the results are not comparable.
If adopted, these requirements will increase the difficulty of environmental comparative advertising. Head-to-head studies would be necessary to legally claim any comparative advantage – at higher costs to the company.
Broad and generalized claims that agitate the whole sector, based on publicly available studies, would no longer be acceptable.
And there are a few additional aspects to be aware of.
It’s not just about text
If claims (= text) is under scrutiny, some might be temped to cheat in suggestive images.
Well, bad news.
According to Article 1 of the proposal it’s not allowed to use »any message or representation, including text, pictorial, graphic or symbolic representation (e.g., labels, brand names, company names or product names), which states or implies that a product or trader has a positive or no impact on the environment or is less damaging to the environment than other products or traders, respectively, or has improved their impact over time.«
We will see to what extent imagery will be banned. There’s a danger that the regulation could get too restrictive.
At the same time, it seems fit that blatant overuse of deceptive imagery is getting outlawed.
Action on short notice
Should something around your environmental claims judged to not be right, you are expected to act quickly.
After receiving a notification, companies are given a deadline of 10 business days to provide an answer. Without a timely or satisfactory answer, they will be asked to correct the claim or immediately stop its communication. According to the current proposal, the given timeframe for taking action on the necessary changes is 30 business days.
The proposal is also expected to allow for third-party complaints that may lead to legal action. In other words: Eyeballs from all sides are expected.
Make up your own mind around possible opportunities for abuse around this.
Implementation on short notice
The EU-level move toward regulating green claims is in proposal4 stage right now (Q1 2023).
But as it stands, there’s a whole catalog of concrete proposals and bans as part of the EU Green Deal on the table. These will be presented to the European Council to the end of March 2023. After that, I have found conflicting information on the timeline. One source* said that it’s planned to be enforced only six months later, to the end of October 2023.
Another source claimed that »once presented, the European Parliament and Council will consider the Proposal for adoption through the ordinary legislative procedure. This process will allow for the introduction of amendments and will take at least 18 months.«
I had troubles conclusively confirming any of those dates and will update the article as soon as I can. In any instance, there’s not much time left before greenwashing will be prohibited.
Start to prepare and position yourself now.
*Read that and didn’t save it, only took a mental note – to be taken with a grain of salt.
Potentials – and dangers
The EU Green Claims Directive holds the opportunity to reduce deceptive claims and corporate greenwashing.
Under threat of legal action, companies can’t fumble around anymore with half-truths or outright lies around environmental impact. At best, it will enable consumers to take informed purchasing decisions based on reliable information about the sustainability of products and companies.
We might get a legal tool to ensure not being fooled by fake claims of green excellence. If everything turns out right, we might actually see a collective effort to finally think things through to the end and a major push towards a circular economy.
But next to this long awaited potential, there are also dangers – discussed here.