On February 14, 2024, the EU Parliament's Internal Market and Environment Committee adopted new rules on how companies can validate their environmental marketing claims.
The EU Green Claims Directive complements the EU ban on "greenwashing". It defines what information companies must provide to substantiate their environmental marketing claims. It also creates a framework and deadlines for checking evidence and approving claims, and sets out penalties for companies that break the law. Penalties include a ban on purchases, forfeiture of income and a fine of 4 per cent of annual turnover.
Verification regime and penalties
MEPs agree with the Commission that companies should submit for approval any future environmental marketing statements before using them. According to the adopted text, these statements will be evaluated by certified verifiers within 30 days. Companies in breach of the rules could be excluded from procurement, forfeit revenue and face fines of at least 4% of their annual turnover.
MEPs said the European Commission should come up with a list of less complex declarations and products that could benefit from faster or simpler validation. It should also decide whether green declarations can continue to be made for products containing hazardous substances. MEPs also agreed that micro-enterprises should be excluded from the new obligations and that SMEs should be given an additional year before the rules are applied.
Carbon Offsetting and Comparison Statement
MEPs have confirmed that the EU has recently banned green claims based solely on so-called carbon offsetting schemes. They now stipulate that companies can still refer to offset schemes if they have already reduced their emissions as much as possible and only use these schemes for their remaining emissions. Carbon credits from these schemes must be certified, such as the Carbon Removal Certification Framework.
Special rules will also apply to comparative statements (i.e., advertisements comparing two different goods), including whether the two products are produced by the same manufacturer. Among other provisions, companies should demonstrate that they have used the same methodology to compare relevant aspects of the products. In addition, claims that a product has been improved cannot be based on data older than five years.
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Andrus Ansip (Renew, EE), the Parliamentary Commission for the Internal Market, says: "Research shows that 50% of companies have misleading environmental statements. Consumers and entrepreneurs deserve transparency, legal clarity and equal conditions for competition. Traders are willing to pay for this, but not more than they gain from it. I am pleased that the Commission's proposed solution is balanced and brings greater clarity to consumers while, in many cases, placing less of a burden on businesses than the Commission's original proposed solution."
Cyrus Engerer (S&D, MT), Rapporteur of the Parliamentary Environment Committee, said, "It's time to end greenwashing. The agreement we have reached on this text ends the proliferation of false green claims that have deceived consumers for too long. It also ensures that companies have the right tools to adopt real sustainability practices. European consumers want to make environmentally friendly and sustainable choices, and all those who offer products or services must ensure that their green claims are scientifically validated."
Next steps
The draft report was adopted by 85 votes in favor, 2 against and 14 abstentions. It will be put to a vote in the forthcoming plenary session and will form the Parliament's position at the first reading (most likely in March.) The document will be followed up by the new Parliament after the June 6-9 European elections.
