With its European Green Deal presented in 2019, the European Commission (the “Commission”) aims to transform the EU into a modern, resource-efficient, and competitive economy, ensuring no net emissions of greenhouse gases by 2050 and economic growth decoupled from resource use.
Part of this Green Deal is a proposed update of EU consumer law to ensure that consumers are protected and to empower them to contribute actively to the green transition. After the EU Commission presented a proposal for a directive in March 2022 to address these points, the European Council and Parliament have now provisionally agreed to this proposal (press releases see Council and Parliament reach provisional agreement to empower consumers for the green transition and EU to ban greenwashing and improve consumer information on product durability). This paves the way for an EU-wide ban of unfair greenwashing practices (i.e., misleading environmental claims) and improved consumer information on product durability. For more information on this topic, please also refer to our December 2022 blog post “Green, Greener, Greenwashing – Green Claims Marketing in the EU and Germany,” where we explain the requirements for green claims under current law, including enforcement risks.
Ban on Greenwashing as an Unfair Business Practice
The Commission, now officially supported by the European Council and the Parliament, aims to protect consumers against unfair greenwashing practices by amending the Unfair Commercial Practices Directive 2005/29/EC (“UCP-Directive”).
The UCP-Directive regulates misleading practices in business-to-consumer transactions when they negatively affect consumers’ transactional decisions. Even under current law, these provisions can already be applied to environmental or so-called green claims. This has also been done by courts in numerous Member States.
To further protect consumers from misleading environmental claims and unreliable sustainability labels, the proposal to amend the UCP-Directive contains, among others, the following changes:
1. The list of product characteristics about which a trader should not deceive a consumer is amended to include “environmental or social impact,” “durability” and “reparability.”
2. The list of actions considered misleading is amended to include “making an environmental claim related to future environmental performance without clear, objective and verifiable commitments and targets and an independent monitoring system.”
3. The list of commercial practices considered unfair in all circumstances is extended to certain practices associated with greenwashing (e.g., displaying a sustainability label not based on a certification scheme or not established by public authorities or making an environmental claim about the entire product when that claim concerns only a certain aspect of the product).
These amendments would be the EU’s first step towards a ban on greenwashing and strict regulation of green claims. In March 2023, the Commission also announced a further step: a proposal for a directive on substantiation and communication of explicit environmental claims (Green Claims Directive).
Providing Consumers with Better Product Information
Next to the greenwashing ban, the Commission also proposed amendments to the Consumer Rights Directive 2011/83/EU. The proposal aims to enable consumers to make informed purchasing decisions and therefore contribute to more sustainable consumption. Among others, the proposal aims at
1. providing information on the existence and length of a producer’s commercial guarantee of durability;
2. providing information on the availability of free software updates for all goods with digital elements, digital content, and digital services;
3. providing information on the reparability of products, through a reparability score or other relevant repair information, where available, for all types of goods; and
4. ensuring that traders do not mislead consumers about environmental and social impacts, durability, and reparability of products.
Outlook
The Commission’s proposal is supported by the Council and the Parliament. It can therefore be assumed that the proposed amendments will actually enter into force. A vote in Parliament is expected in November. If the proposal receives the expected majority, the directive will enter into force. Member states will then have 24 months to implement the directive.
Stakeholders should not wait until then to align their environmental or green claim marketing practices with the standards described above. Most of these requirements are already implicitly required by applicable law today. Consumer associations and competent authorities in many EU member have successfully brought legal actions and initiated administrative proceedings against companies using potentially misleading green claims. Even before the UCP-Directive is amended, it is therefore important to assure that green claims are not misleading in any way and that there is sufficient evidence in place to substantiate the green claim further if it is challenged.
Research assistant Tim Stripling contributed to this article.