Not every piece of regulation is bad news for brands. WFA Policy Manager Fraser Bridges explains why the EU’s latest green claims rules could help the industry and why legislators need to be wary of ‘disempowering’ consumers when it comes to the Green Transition.
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Companies have long been challenged on some of the sustainability claims they make about their brands, but the pressure is getting more intense.
There is now increased scrutiny from both society and regulators alike about what is said and how it is said when it comes to environmental sustainability.
Back in 2020, an EU study found that 53% of environmental claims made by brands were vague, misleading or unfounded.
Leading brands are already taking action to ensure green claims are correctly made – WFA research in December 2023 found 8 in 10 of those who responded had specific policies for environmental claims in place. Nevertheless, policymakers are keen to regulate to level the playing-field.
As a result, there will be new rules, under the so-called “Empowering Consumers for the Green Transition” directive coming into force in the second half of 2026. This will amend and reinforce existing EU consumer law when it comes to ‘greenwashing’. In addition, brands will no longer be able to:
- Use generic environmental claims, such as “green” or “eco-friendly”, unless supported by state-owned eco-label.
- Use company-owned sustainability labels, even if it is third-party verified.
- Claim that products are carbon offset. Companies will be able to talk about company-wide net zero commitments, however, but only if they have implementation plans with dates. These will have to be regularly monitored by third-party experts, with the findings made available to consumers.
Under the accompanying so-called “Green Claims Directive”, a further new set of rules is still under discussion, which could, from 2028 onwards, require brands to secure third-party verification of any green claim before it can be used in marketing.
WFA believes that it is essential that brands retain the ability to nudge consumers towards more sustainable products or consumption patterns. If new rules make it hugely complicated, with an onerous claim-by claim pre-approval process for example, as well as conditions on the way messages are conveyed to consumers, that will make brands more reluctant to promote these important messages. Far from empowering consumers to make more sustainable choices, this could lead to increased consumer confusion and apathy.
In recent months, WFA has engaged with EU policymakers to argue for a credible alternative to claim-by-claim pre-approval. An idea which is gaining traction is the concept of a “presumption of conformity” – already widely applied in EU legislation regulating areas of real potential risk to the consumer, including on product safety, machinery, and medical devices. This could apply to claims that use substantiation methodologies recognised as robust and proven by legislators with the capability to add to these as new innovations in methodologies arise. The aim is to keep the barrier high but the entry cost reasonably low. We will continue to push this important point throughout 2024.