Green Claims Directive: European Union says stop to Greenwashing

The numbers of green washing

At the origins of the EU Commission’s proposal are two surveys conducted on sustainability claims in 2014 and 2020. A sample of 150 environmental claims referring to products of different types was considered and evaluated according to four parameters: clarity, unambiguousness, accuracy and verifiability.
According to the 2020 survey, 53.3 percent of the claims provided vague, misleading or unfounded information about the characteristics of the products under consideration. In 40 percent of cases, data support was lacking: impossible to prove the truthfulness of what was claimed.

Confirmation also comes to us from a Consumer Protection Cooperation Authority study carried out in the same year, which analyzed 344 sustainability claims. In 57.5 percent of the cases, it was found that there was not enough evidence to judge the correctness of the claim, in 50 percent it was difficult to determine whether the claim referred to the whole product or only to a component of it, to the company or only to certain products (36 percent), and which stage of the product life cycle it actually covered.

The expected benefits

Nothing counteracts green washing exercises like clarity, reliability and verifiability of data. Preventing green washing in its various expressions promotes the spread of circular economy models because it directs purchasing behavior in a way that influences companies’ production strategies: more awareness, more responsible purchasing, more push on companies to implement concrete sustainability projects.

Another benefit comes from the introduction of shared parameters for the inclusion of sustainability data on the label, which obviously must also be verifiable. Standardization helps clarity and limits the proliferation of environmental labels and eco-labels that cover different aspects, take different operational approaches and are subject to different forms of control.

The impacts on the enterprise

The targets of the proposal are all enterprises operating in the EU territory with more than 10 employees and a turnover of more than 2 million euros.
For micro-enterprises that would still want to be part of the green transition, suitable measures of access to credit and technical-organizational assistance are provided. For all others, it is clear that they will have to bear the cost of upstream investment, but this will largely depend on the type of environmental declaration applied to how many products. It can be guessed, for example, that a claim on the entire life cycle a product will require significantly more investment than a claim focused on a single product attribute: ecological packaging, for example.

Minimum requirements

To avoid vague, misleading or deceptive claims, the proposed Directive requires that the substantiation of explicit environmental claims rest on an assessment that meets a set of minimum requirements. The assessment will have to, for each product:

• prove the relevance of impacts and performance from a life-cycle perspective
• be based on recognized scientific evidence and state-of-the-art technical knowledge
• demonstrate whether the claim is accurate for the entire product or only for parts of it
• taking into account all significant aspects and impacts to evaluate performance
• determine whether a positive outcome implies a significant worsening of another impact (climate change, resource consumption and circularity, sustainable use and protection of water and marine resources, pollution, biodiversity, animal and ecosystem welfare)
• provide information on whether the product has significantly better environmental performance than common practice
• communicate greenhouse gas offsets in a transparent and detailed manner, specifying, for example, whether such offsets relate to emission reductions or removals, and describing how offsets are accounted for to reflect the stated climate impact.

Limits…

The EU Green Claims Directive is good news in itself, but the ranks of the disappointed swell as its details are “digested.” Indeed, it seems that the version circulated days earlier unofficially referred to a specified scientific method to be able to substantiate environmental disclosures, a reference that disappears in the official text. Companies are simply recommended to base their claims on generic scientific evidence, leaving a discretion that clearly does not help harmonization of criteria.

The observation is basically correct, but context must be taken into account. There are sectors that are more ready than others, and fashion is not among them. A major obstacle, in addition to its congenital fragmentation, lies in the extreme difficulty of collecting impact data related to the various processes and realities involved in production. Obtaining evidence-based measurements and primary data – that is, shared by suppliers who directly contribute to the product manufacturing – is a tough challenge to multiply, moreover, for hundreds of different products included in the collection.

…and opportunities

For the fashion & luxury industry, the Green Claims Directive is an opportunity and a push to tighten up. Indeed, by the time it finally comes into effect, companies will have to have a system for engaging their suppliers and collecting and managing impact data based on recognized methodologies.

“Brands will only be able to credibly respond to incoming legislation by turning permanently to suppliers who are prepared, collaborative, and supported by IT data collection methods and platforms,” notes Francesca Rulli. “With 4sustainability® we are going in exactly this direction: structuring sustainable supply chains, applying recognized methods for measuring impacts and sharing data with customers. And build sustainability claims in accordance with the law.”