Green Claims Directive: Implications and opportunities for business

Within the sustainability landscape, the Green Claims Directive is becoming a crucial milestone. This EU proposal, which aims to regulate environmental claims, is redefining the rules of the game for companies and sustainability professionals.

In this article, we will explore in depth the Green Claims Directive, its implications and how companies can prepare for its implementation.

This analysis will provide you with a clear and detailed overview of this important regulatory development.

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What is the EU Green Claims Directive?

The Green Claims Directive or European Green Claims Directive is a legislative proposal of the European Union that aims to regulate the environmental claims, known as «green claims», that companies make about their products or services.

These claims can relate to any environmental aspect of a product or service, such as its carbon footprint, energy efficiency, recycled content or impact on biodiversity.

In March 2023 the European Commission proposed the Directive whose main objective is to ensure that these claims are accurate, verifiable and not misleading. In other words, it seeks to ensure that companies back up their environmental claims with solid and reliable evidence.

In this way, the Directive aims to combat the phenomenon of greenwashing, a practice whereby companies exaggerate or misrepresent the environmental performance of their products or services in order to appear «greener» than they really are.

The Green Claims Directive therefore aims to create a more level and transparent playing field for all businesses and to protect consumers from misinformation.

Proposal for a European Green Claims Directive

The proposed European Green Claims Directive sets out a number of requirements that companies must meet when making environmental claims:

Companies must be able to back up their claims with sound and reliable scientific evidence.
In addition, they should present their claims in a way that is clear and understandable to consumers, avoiding the use of vague or misleading terms.
The Directive also proposes the establishment of an independent verification system for environmental claims. This system would allow authorities or independent third parties to verify the accuracy of companies’ environmental claims.

In this way, the Directive hopes to give consumers greater confidence in environmental claims and help honest companies differentiate themselves from greenwashers.

Who is affected by the European Green Claims Directive?

The Directive will affect all companies making environmental claims about their products or services on the EU market.

This includes companies of all sizes and sectors, from manufacturers of consumer products to service providers. Companies with less than 10 employees are excluded.

It is important to note that the Directive is not limited to companies based in the European Union. Any company selling products or services on the EU market, regardless of its location, will be subject to the Directive if it makes environmental claims.

Key requirements of the Green Claims Directive

The Directive sets out a number of key requirements to ensure that claims are accurate, verifiable and not misleading.

In order to comply with the requirements of the Directive, companies will have to take steps to validate their environmental claims. This involves the collection of data or the use of recognised assessment methods.

In addition, companies may have to work with independent third parties to verify their claims, such as consultants, laboratories or certification companies to conduct independent audits or tests.

Validation of environmental claims will be a rigorous process that will require serious commitment from companies. However, this effort will be essential to ensure the credibility of environmental claims and to build consumer confidence in sustainable products and services.

Steps to comply with the new Green Claims Directive requirements

To comply with the requirements of the European Green Claims Directive, companies will need to take a number of steps. Here are some of the key steps that companies may need to take:

Understand our claims: First, we need to understand our own environmental claims. Do they relate to all our product or only part of it? Do they relate to all our activities or only some of them?
Assure our claims: Our claims must be supported by sound and accurate scientific evidence. You should demonstrate that the claims are supported by life cycle assessments.
Verify our claims: All environmental claims shall be independently verified. Once the verification is completed, the verifier must produce a certificate of compliance stating that the environmental claim complies with the Directive.
Communicate our claims: When we make environmental claims, we should communicate them clearly, along with their «substantiation». This can be in physical or digital form, such as a web link or QR code.
Review our governance: We need to review our governance to ensure that we are prepared to meet the requirements. This includes roles, responsibilities, management information and executive remuneration.
Preparing for implementation: Once the Directive is adopted, Member States will have to transpose it into their national legal systems within 18 months after the Directive enters into force, and implement it within 24 months after the Directive enters into force.

To comply with the requirements of the Directive, companies may have to make significant changes to their operating models, such as implementing new processes for evidence collection and verification, as well as training staff in these new processes.

In addition, companies may need to invest in new technologies or services to help them comply with the requirements. For example, they may need to invest in data management systems to collect and store the evidence needed to support their environmental claims.

Conclusion

The Green Claims Directive represents an important milestone in the European Union’s efforts to promote a more sustainable and transparent economy.

By regulating companies’ environmental claims, the Directive has the potential to combat greenwashing, protect consumers and create a more level playing field for companies.

It will undoubtedly help combat greenwashing by requiring companies to back up their environmental claims with solid, verifiable evidence. This will prevent companies from exaggerating or misrepresenting the environmental performance of their products or services, and provide consumers with greater confidence in environmental claims.

For example, a company claiming that its product is «100% recyclable» will have to demonstrate that all parts of the product can be effectively recycled in existing recycling facilities. If it cannot provide this evidence, it will not be able to make this claim.

However, complying with the requirements of the Directive will also pose challenges for companies. Collecting and managing the data needed to support environmental claims can be a complex and time-consuming task.

This is where APLANET software can be of great help. Our solution enables companies to collect and manage their sustainability data for efficient and effective reporting.

With APLANET, companies can be confident that they are backing up their environmental claims with accurate and verifiable data, facilitating verification and communication. For more information you can speak to a specialist right here.

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