1. December 2023.
EU Parliament representative on greenwashing: generic green labels like ‘bio’ and ‘eco’ becoming a thing of the past
Sustainability has become a ‘must have’ direction in the economic and business world. According to a report by the global consulting firm Horváth, European companies have allocated an average of 27 percent of their total budget in 2023 for investments in sustainability improvements. Several factors are driving them towards green transition – primarily the desire to preserve the environment, while less concerned companies are pressured by numerous national regulations, as well as consumers themselves demanding sustainable products and services.
Due to market pressure, many companies that do not independently decide to invest in sustainability resort to a ‘cheaper’ solution, namely manipulative green marketing, or greenwashing. They present their operations as more sustainable than they actually are, i.e., they portray their products as environmentally friendly, even when this is not the case. This often includes marketing tricks, PR maneuvers, or outright disinformation. In other words, companies mislead their stakeholders into thinking that the company is doing something good for the environment and fighting climate change, which is not actually the case.
Biljana Borzan, a representative from the EU Parliament, says that for this reason, we currently live in a jungle of different claims. Since more than half of European consumers consider the environment when shopping, claims about a positive environmental impact are increasingly found on products. At the EU level, as many as 80 percent of online ads have such a green claim, however, 56 percent of European consumers say these claims are false or misleading.
“According to my research, the situation in Croatia is even worse. As many as 89 percent of consumers noticed ecological labels and claims when shopping, but 69.5 percent of citizens do not believe them. In addition, 81 percent of citizens have never checked the veracity of green claims they encountered while shopping,” says Borzan.
Bearing in mind how important it is for citizens to buy products that do not negatively impact the environment and the increasing occurrence of manipulative or even false green claims, the European Commission launched the legislative initiative ‘Empowering Consumers for the Green Transition’ in March 2022. This involves the revision of two directives: the Unfair Commercial Practices Directive and the Consumer Rights Directive. Borzan was appointed the European Parliament’s Rapporteur for this law, meaning she is the main author and negotiator for the Parliament.
“We concluded negotiations in September 2023. The result is significant market changes that will protect consumers from false advertising,” emphasizes the MEP.
They ensured that all sustainability labels and markings go through a system that will guarantee their truthfulness. Now, you can notice how, for example, various brands have their own labels like ‘conscious’, ‘sustainable’, etc., without them meaning anything, allowing the manufacturer to control what is written on them and which products they are placed on. The new law introduces a system whereby a third party will check each such label or claim. Likewise, green claims related to future goals, such as a label saying that a company will reduce CO2 emissions or recycle part of its waste, must be backed by a scientifically grounded implementation plan, which has its budget and resources and is regularly controlled by independent experts.
“More than half of European consumers believe that green claims on products are often too general and misleading. These are so-called generic claims that have flooded products like ‘bio’, ‘eco’, ‘sustainable’, ‘biodegradable’, ‘natural’. We have banned these with this law. Namely, they are largely misleading because it is not indicated what they refer to,” states Borzan.
For example, a ‘biodegradable’ label on a shower gel leads the consumer to think that the entire product is biodegradable, or at least the gel itself, when in fact it may only refer to the cap on the packaging. Therefore, generic claims will be banned, and if someone wants to promote a green claim, they will have to describe in detail on the same packaging what and how it relates.
A significant victory for the Parliament in this document is the ban on claims based on carbon offset compensation. These are claims like ‘climate neutral’, ‘climate compensated’, or ‘climate positive’. The scientific fact is that nothing can be produced without having a smaller or greater negative impact on the climate, Borzan points out. Therefore, such claims are always false. Manufacturers use them in a way that says a product is climate neutral because they estimated that a forest they planted in Chile produced enough oxygen to neutralize the pollution caused by their production in Germany.
“Such claims are deeply misleading because they have nothing to do with the product itself. Legislation on carbon emission compensation is in its infancy, so there is no way to check if they are even partly true,” warns Borzan.
However, the Law on Empowering Consumers for the Green Transition is comprehensive and brings many positive changes. Borzan emphasizes that with an ambitious approach, they ensured a good direction for the new lex specialis Directive on Green Claims, which will go into much more detailed regulation of greenwashing.
“This law is still in the procedure and unfortunately probably will not be completed by the end of the term. That’s why I insisted on such comprehensive changes in my law, to ensure faster protection of citizens from false and manipulative advertising,” concludes Borzan.