Advertising with environmental statements is booming. Advertising companies like to claim that they or their products are “climate neutral”, “CO2 neutral” or even “climate positive”. Such advertising statements are also popular in the fashion industry. Claims such as “nachhaltig”, “conscious”, “sustainable”, “organically grown” or “responsibly sourced”, to name just a few examples, can be found in abundance in the fashion sector. There is also proliferation of the much-used eco-labels and seals.
Against this background, too, the EU Commission has made it its task to prevent “greenwashing” and to regulate environmental advertising more closely. To this end, in March of this year it proposed a new directive on environmental claims.
This proposal for a directive is part of the overall “European Green Deal” initiative. The EU Commission aims to make the EU the first climate-neutral continent by 2050. As an interim goal, emissions are to be reduced by at least 55 percent by 2030 – measured against the emission level in 1990. In this context, the EU Commission has not only launched an action plan for the circular economy, but also proposed various guidelines, including in March 2022 a policy to empower consumers for the green transition – and now said policy on environmental claims.
The aim of the EU Commission: clear regulations for environmental statements and eco-labels
The Commission’s declared goal is to stop greenwashing and misleading consumers through false environmental advertising claims and the proliferation of public and private eco-labels. The new proposed regulations aim to ensure that consumers receive reliable information about the environmental friendliness of the products they buy.
Which advertising claims are affected?
In order to achieve this, the proposed directive aims – in addition to the environmental labels, which are also regulated – to environmentally-related advertising claims (“green claims”), i.e. in principle to all advertising statements by a company with which products or services or the company itself are in any form as be presented in an environmentally friendly way.
How should such advertising statements be regulated in the future?
According to the Commission’s proposal, environmental statements such as “packaging made from x percent recycled plastic”, “climate-neutral” or similar must first be justified. For this purpose, the advertising companies must carry out an evaluation based on specified criteria. Among other things, the evaluation must relate to whether the advertising statement refers to the entire product or only part of the product. It must also be based on generally accepted scientific knowledge and take international standards into account, and it must contain evidence that the environmental impacts are actually relevant with regard to the life cycle of the product. In addition, the company must demonstrate that the product performs significantly better than other products in the same sector in terms of environmental impact.
The justification for the environmental statement must then be checked and certified by a testing body to be set up by the member states. Both the justification and its verification and certification by the testing body must take place before the environmental claim is used.
The justification for environmental claims must be reviewed and, if necessary, updated every five years at the latest. The above procedure – i.e. evaluation by the advertising company and verification and certification by the testing body – must then be carried out again.
How are the requirements to be met?
The proposed directive also regulates the future communication of environmental statements. They should be communicated in a transparent manner and should be supplemented with information on how consumers should use the advertised product in order to achieve the desired environmental impact.
In addition, the information covered by the directive must in future be made available by the company on the product itself, either physically or via an Internet link – for example a QR code – where consumers can find more detailed information on calculation bases, certificates, etc.
Are there exceptions?
However, the proposed directive also provides for exceptions: in order to avoid the regulations having a disproportionate impact on smaller companies, micro-enterprises with fewer than 10 employees and a turnover of less than 2 million euros are exempt from the obligations.
What happens in case of violations?
For violations of the new regulations, the proposed directive provides for fines, the amount of which should be at least 4 percent of the annual turnover of the respective company in the member states concerned.
When do the regulations apply and what should be observed now?
The proposal – which is subject to change – needs to be approved by the European Parliament and Council before member states have two years to implement it. Companies do not yet have to meet the requirements. Nevertheless, caution is required when using “Green Claims”. Numerous German courts have already dealt with this topic and have banned greenwashing in advertising and corporate communications through existing legal regulations. Anyone who wants to avoid a warning (which is subject to a fee) is well advised in the environmental sector to work with unembellished claims and to provide transparent information about the background to the advertising statement.
About the author:
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Janina Wortman is a lawyer and associated partner in the Munich office of the law firm Noerr. She advises companies in all areas of trademark and design law. She also advises on competition and distribution law. One focus is advising companies in the fashion and cosmetics industry. You can reach her at [email protected].