The European Commission’s draft Green Claims Directive (COM(2023) 166 final) has the potential to significantly change the field of environmental advertising and labeling. With a focus on transparency, consumer protection and climate protection, this regulation is intended to drive forward the fight against greenwashing and promote sustainable corporate behavior.
Content of the draft Green Claims Directive
The aim of the directive is to regulate explicit environmental claims made by companies about their products. The regulation takes the form that these environmental claims must be substantiated by the company. An example would be the statement: “This product is climate neutral”. According to the directive, the company would have to justify this statement and provide scientific evidence. This should also apply to comparative environmental claims between two products from different companies. In addition, so-called eco-labels are to be controlled by the member states.
In summary, it should be noted that it should no longer be possible for companies to carry certificates and environmental statements without these being checked by a public body or without the company itself providing justification for the statements.
Transparency, trust and climate protection
The Green Claims Directive would benefit consumers, competitors and the climate in equal measure:
1. consumer protection and transparency: One of the key strengths of this directive is consumer protection. By ensuring that environmental claims and labels must be certified by an independent testing body, consumers receive reliable information. This transparency enables them to make informed purchasing decisions and rely on trustworthy information about the environmental impact of products and services.
2. combating greenwashing: Another significant advantage of the directive is that it effectively combats greenwashing. Companies are now obliged to back up their environmental claims with scientific evidence. This will increase consumer confidence in sustainable products and services by avoiding misleading advertising claims.
3. incentive for more environmental protection: The directive creates incentives for companies to actively take measures to reduce their environmental impact. The prospect of certification serves as motivation to implement environmentally friendly practices and thus make a positive contribution to climate protection. This incentive promotes a more sustainable approach to business activities and contributes to the achievement of climate targets.
The directive can therefore be an important step towards transparent and responsible advertising that benefits both consumers and climate protection. Promoting consumer protection, curbing greenwashing and strengthening incentives for greater environmental protection are key elements of this regulation. It is therefore a further measure within the framework of the European Green Deal, which aims to make the EU climate-neutral by 2050.
The challenge of excessive regulation
The potential benefits of regulating environmental claims and ecolabels are undoubtedly promising. However, concerns about potential over-regulation should not be ignored. Such regulation could impose a significant bureaucratic burden on companies, especially smaller ones. Additional regulations and requirements could lead to an increase in costs and administrative burdens, which could affect the economic performance of small businesses.
Another risk of over-regulation is that companies are restricted in their scope for action. Strict regulations could lead to companies limiting themselves to already regulated methods and best practices instead of developing innovative solutions. A lack of flexibility could impair companies’ ability to adapt to changing environmental conditions and technological developments, which in turn could hinder progress.
A balanced approach
In view of these concerns, a balanced regulatory approach is crucial. The benefits of transparent and responsible advertising must be reaped without jeopardizing the competitiveness and innovative strength of companies. Appropriate regulation should aim to achieve the goals of consumer protection and climate change mitigation without creating unnecessary hurdles for businesses. A balance between regulation and entrepreneurial freedom can help ensure that the Green Claims Directive achieves its intended benefits while minimizing potential disadvantages. This is the only way to promote a sustainable and future-oriented economy.
Farewell to green claims
The directive offers a perspective to combat greenwashing and promote sustainable business practices. Balanced regulation that keeps consumer protection, transparency and climate protection in mind can help pave the way for a green and responsible economy. In this context, it is important to address concerns about overregulation and find a balance between benefits and challenges.
The “Environmental Claims Directive” may be a step in the right direction towards shaping a sustainable future and increasing consumer confidence in environmental claims. However, the directive is still at the draft stage, i.e. it has yet to be adopted and then requires national implementation, so its concrete form remains to be seen.
Focus on competition law
In our focus topic “Requirements in competition law“, we look at the changes resulting from the latest amendment to the UWG and present the challenges for companies and entrepreneurs. So far, this series has included an overview of consumer compensation and fines regulations, influencer case law and the associated changes to the UWG (also) for influencers, necessary adjustments in e-commerce and restrictions on the sale of dual quality products.