People are losing trust in companies’ environmental claims, and it’s not hard to see why. Reports from the European Commission show that more than half of these claims in the EU are vague or lack solid evidence. To address this issue, the EU is preparing to roll out the Green Claims Directive (GCD) by February 2026.
This Directive focuses on the explicit environmental claims that companies make about their products and services when selling directly to consumers. Its purpose is to ensure that these claims are accurate, transparent, and based on credible evidence. It also introduces new labelling guidelines to make sustainability information easier to trust, helping consumers make better-informed choices.
Ultimately, the GCD aims to improve transparency for consumers, strengthen the environmental impact of products, and give businesses legal guidelines.
Let’s take a look at a brief overview at how companies and communication agencies can start applying best practices before the Directive is in force.
Key Requirements for Environmental Claims
Companies must assess and verify any environmental statements they make.
Here are the main points they need to consider:
Clarity of Claims: Companies should clearly state whether their claim refers to the entire product or just a part of it.
Scientific Evidence: All claims must be backed by reliable scientific evidence that aligns with international standards.
Life-Cycle Impact: Businesses should evaluate the environmental impact of their products over their entire life cycle, from production to disposal.
Actual Improvement: Claims must demonstrate real improvements over typical industry practices. They shouldn’t just fulfill existing legal requirements.
Avoiding Harm: Companies must ensure that their claims do not negatively impact other environmental areas, such as biodiversity or water usage.
Greenhouse Gas Offsets: If claims involve offsets for greenhouse gas emissions, these must be credible and well-documented.
Key Requirements for Communication
Moving on to how these claims are communicated, several requirements must be met:
Significant Impacts Only: Claims should only include significant environmental impacts and performance metrics supported by solid data.
Guidance for Consumers: If it’s relevant, companies need to inform consumers how to use the product to achieve the claimed environmental benefits.
Future Commitments: Any statements about future improvements must come with specific goals and timelines.
Supporting Information: Businesses should provide access to underlying data, studies, and standards via links or QR codes when making claims.
Clear Communication: The role of greenhouse gas offsets in any climate-related claims should be explicitly stated.
Consumer Understanding: A brief, clear summary of the claim’s substantiation should be provided, making it easy for consumers to understand.
Verification
The Directive requires independent third-party experts to check environmental claims and labels before they are made public. After verification, the company gets a Certificate of Conformity.
Monitoring and Penalties
Now, let’s take a look into how compliance with these regulations is monitored and the penalties for violations.
Regular Monitoring: Authorities in each EU Member State are responsible for regularly checking environmental claims and labeling schemes. They must publish their findings online to keep the public informed.
Addressing Violations: If authorities find a violation, they will evaluate the situation and notify the company involved.
Corrective Actions: Companies must correct any non-compliance within 30 days or stop using the claim altogether. These actions should be prompt and proportionate to the issue at hand.
When determining penalties, authorities will consider factors such as the seriousness of the violation, whether it was intentional or accidental, the duration of the infringement, and any economic benefits gained from it.
Types of Possible Penalties:
– Fines: These should deprive traders of any economic benefits from the violation, with higher fines for repeated offenses.
– Confiscation: Authorities may confiscate any revenue gained from transactions involving the products in question.
– Temporary Exclusion: Companies may be temporarily banned (for up to 12 months) from participating in public procurement or receiving public funding.
In cases involving multiple EU Member States, penalties can reach up to 4% of the trader’s annual turnover in those areas.
Access the Green Claims Directive (GCD) here: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM%3A2023%3A0166%3AFIN