The Green Claims Directive was launched by the EU Commission to prevent misleading environmental claims – also known as greenwashing – and to promote clear, transparent communication of environmental benefits. This directive is also part of the EU Green Deals, which includes other sustainability initiatives such as the Corporate Sustainability Reporting Directive (CSRD), the EU taxonomy and other initiatives.
At a time when sustainability has become a decisive criterion for consumers, companies are faced with the challenge of making their environmental claims scientifically sound and verifiable. This blog post gives you a comprehensive overview of the Green Claims Directive, what it means for your business and how you can make compliant environmental claims.
Green Claims Directive
What are green claims?
Green claims refer to environmental statements made by companies that indicate the environmental friendliness of their products, services or business practices. These claims are now ubiquitous – from “climate-neutral products” to “environmentally friendly packaging”. But how reliable are these claims really?
According to a study conducted by the EU, 53% of environmental claims are potentially misleading and 40% of claims are not based on any verifiable evidence. Here, the Green Claims Directive comes into play by ensuring that companies substantiate their environmental claims with solid data and prohibiting certain statements.
Why the 'Anti-Greenwashing' Directive is necessary
Nowadays, it is often difficult for consumers to distinguish which environmental claims are credible and which are not. The Green Claims Directive aims to prevent greenwashing, where companies make unsubstantiated or false environmental claims in order to position themselves as environmentally friendly. This directive should enable consumers to make informed decisions and access reliable environmental information.
The directive is also intended to improve the comparability of environmental claims and oblige companies to communicate their claims clearly and transparently. This protects both consumers and companies that make honest environmental claims.
Which environmental statements are permitted?
In order to meet the requirements of the Green Claims Directive, companies must scientifically substantiate their environmental claims and have them verified by independent third parties. Here are some examples of permitted claims.
Examples of permitted claims
- “This product is made from 100% recycled plastic“: As long as the company can prove that the material is actually recycled and has been tested by independent bodies, this claim is permitted.
- “CO₂-neutral supply chain“: If the company transparently demonstrates the use of certified CO₂ offsetting projects and these projects meet the strict requirements of the directive.
Examples of prohibited claims
- Environmentally friendly“: This statement is too general and forbidden without specific information on how the environmental benefit is proven.
- “Climate-neutral thanks to CO₂ compensation“: If the compensation is not transparent and detailed, this statement is inadmissible.
The Green Claims Checklist
We have created a checklist that companies can use to check whether their environmental claims meet the requirements of the directive.
What does the Green Claims Directive mean for companies?
For companies, the “anti-greenwashing” directive means greater responsibility and transparency in the communication of their environmental statements.
Companies should implement the following five steps:
- Building up expertise on the ‘Green Claims Directive’ in the company
- Collection & review of existing advertising claims for sustainable environmental claims
- Checking the environmental statements for regulatory conformity
- Adaptation of the claims (if necessary)
- Development of internal rules and processes
Companies must ensure that their claims are based on scientific evidence and that all significant environmental impacts of the product or service are taken into account. In addition, every environmental claim must be reviewed regularly – at least every five years – by an independent body.
Important facts for companies
Yes, only micro-enterprises (< 10 employees & < 2 million euros turnover) are not affected for the time being. It also does not apply to the B2B sector.
Expected to be between 500 and 8,000 euros. These costs depend to a large extent on the type of environmental statement the company wishes to make voluntarily and the number of products.
In addition to injunctive relief and claims for damages, fines of at least 4% of annual turnover are to be expected.
Best practice example
With its organic oat drink, the drugstore chain dm is considered a best practice example in the implementation of the directive.
The link to the CSRD (Corporate Sustainability Reporting Directive)
While the Green Claims Directive focuses on specific environmental claims, the CSRD requires holistic sustainability reporting. Under the CSRD, companies must disclose their entire environmental, social and governance (ESG) performance. The focus of the European Sustainability Reporting Standards (ESRS) is on dual materiality, which considers both the impact of a company on the environment and society (inside-out) and the impact of environmental factors on the company (outside-in).
The CSRD collects and makes transparent numerous sustainability data, which can serve as proof of the environmental statements made.
Conclusion: A must for responsible companies
The Green Claims Directive is an important step towards preventing greenwashing and restoring consumer confidence in environmental claims. Companies must ensure that their environmental claims are supported by scientific evidence and stand up to independent scrutiny. For companies that take sustainability seriously, this directive offers an opportunity to differentiate themselves from competitors and build trust with customers before the directive becomes mandatory for all companies.
In order to remain competitive and avoid warnings and high fines, companies should take the necessary steps now to formulate compliant green claims.
