EU Legislation Takes Action Against Greenwashing
Published 6 January 2023
Category: Impact and ESG
Lately, EU has sharpened its focus on preventing greenwashing as well as strengthening the sustainability reporting requirements. One step, among others, is the recent passing of the CSRD. Another is a proposal published in March 2022 by the European Commission with amendments for the Directive 2005/29/EC on Unfair Commercial Practices (UCPD) as well as the Directive 2011/83/EU on Consumer Rights.
The proposed amendments to the EU consumer legislation aim towards a greener EU economy and focus on making it possible for consumers to make informed decisions. The hope is that this will promote a more sustainable consumption as well as prevent unfair commercial practices that might previously have mislead consumers to make less sustainable choices.
Focusing on the UCPD, this directive regulates unfair commercial practices in business-to-consumer transactions. It regulates misleading marketing in general and as such not environmental marketing specifically. However, the proposed amendments will put greater focus on this. The amendments shall help national authorities enforce rules within difficult areas such as misleading environmental claims and sustainability information tools. Further, the amendments will specify when commercial practices qualify as unfair with the purpose of increasing consumer protection.
Specifically, the proposal will add social and environmental impact, reparability and durability to the list of main product characteristics that commercial practices may not mislead about. Further, environmental claims not supported by objective and correct targets and commitments will be prohibited. The proposal will add new practices onto the existing list of prohibited, unfair commercial practices. Among new prohibited commercial practices is displaying sustainability labels which are not established by public authorities or based on certification schemes. Further, it should be prohibited to make generic environmental claims such as “green” and “carbon neutral” when it is not possible to demonstrate this excellent environmental performance or when clear specifications are not given on the same medium. Also, it should be prohibited to make environmental claims concerning the entire product when, in fact, the claim only applies to elements of the product. The European Parliament and Council are still processing the proposal from the European Commission. The proposal can be found here.
The issue of greenwashing and misleading marketing has also been addressed by the Danish Consumer Ombudsman. In 2021 the Consumer Ombudsman published a guide to companies on environmental marketing which can be accessed here. The purpose was to guide companies in their product description and marketing to prevent them from violating the Danish Marketing Act. In the same way as the abovementioned proposal, the guide also underlines that using product statements such as “green” and “sustainable” requires documentation. The guide is a shortened version of a more detailed guide on the use of environmental and ethical claims published in 2014.
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