Changed rules on green claims – does your marketing contain claims about environmental objectives or emissions compensation?

The Consumer Package will become applicable in less than three years

Several significant amendments are to be expected at EU level to the rules on green claims. One of these amendments is the Green Claims Directive, which is currently being handled by the European Parliament.

Another amendment concerns the Consumer Package, i.e. the future changes to the Consumer Rights Directive (2011/83) and the Unfair Commercial Practices Directive (2005/29). The Council of the European Union approved the Consumer Package in February 2024, and the amendments in accordance with the Directive will become applicable in EU Member States in two and a half years from the publication of the Directive in the Official Journal of the European Union.

Directive 2005/29 has an Annex that includes a blacklist of commercial practices which are considered unfair under all circumstances. The Consumer Package brings new additions to the list. The additions make it vital for an undertaking engaging in consumer business and using green claims to identify any needs to change their marketing. Now is the right time to prepare for the changes caused by the Consumer Package.

What can constitute misleading marketing?

You should be careful when communicating environmental objectives for the future. If you want to present a claim concerning your future level of environmental protection, such as ‘we will be carbon-neutral by 2040’, you should have clear, objective, publicly available and verifiable commitments in order for the marketing not to be considered misleading. The commitments should be presented in a detailed and realistic implementation plan that includes, for example, measurable objectives to achieve the improvement presented in the environmental claim as well as a timetable for them. An independent expert should monitor the undertaking’s progress in achieving the commitments and objectives.

The change is significant. It is very common that marketing presents claims about future objectives to achieve carbon-neutrality without any concrete plans for achieving them. In practice, this kind of marketing can already be deemed misleading, but the Consumer Package creates the legislative basis in the EU for requiring that, for example, a separate implementation plan be prepared for achieving the improvements. Without such a plan, marketing is not in accordance with the Consumer Package.

What does the blacklist prohibit?

The use of environmental claims, such as ‘green’, ‘environmentally friendly’, ‘gentle for the environment’ and other corresponding vague claims will be completely prohibited, unless the marketer can demonstrate recognised excellent level of environmental protection and thus justify the use of this kind of very general claim.

An environmental claim is vague under the Consumer Package if it is not clearly and visibly specified when used in marketing. An example of a generic environmental claim under the Consumer Package would be ‘environmentally friendly packaging’, while the claim that ‘100% of the energy used to manufacture this packaging comes from renewable sources’ would generally be considered a specified environmental claim. In light of this example, using a claim that concerns environmentally friendly packaging would require that the undertaking can actually demonstrate that the packaging has a recognised excellent level of environmental protection. Otherwise, the question is of inappropriate marketing.

Claims concerning compensation of greenhouse gas emissions, according to which the product’s environmental impact is neutral, lower than usual or positive with respect to the greenhouse gas emissions will also be added to the blacklist that includes prohibitions. For example, the claim ‘lower environmental impact’ would only be allowed if it is based on the product’s actual impact during its life cycle and not on compensating greenhouse gas emissions outside the product’s value chain.

What is the current status of the Green Claims Directive?

It is worth keeping in mind that the Consumer Package and the Green Claims Directive are two separate things. The Consumer Package has already been approved by the appropriate instances in the EU, while the proposal for Green Claims Directive is to be discussed in a plenary session of the European Commission in March 2024. Some amendments have so far been proposed to the originally proposed Directive, but the basic logic of the proposal is largely in accordance with the original.

The objective of the Green Claims Directive is to create common rules for how explicit environmental claims should be substantiated and how they should be communicated in marketing. The most significant change brought about by the proposed Directive is that a third party must approve any environmental claims in advance.

If the Green Claims Directive is approved, the time for marketing campaigns with spontaneous environmental claims is over. In practice, it is advisable to get ready for these changes now. The environmental claims used in your marketing must be research-based and sufficiently unambiguous and specific so that you can provide enough proof to support them and that verifying the claim in the future would be as simple as possible.

In short, the Consumer Package can be deemed very essential with respect to the changes and clarifications of the substance concerning environmental claims. The Green Claims Directive, in contrast, creates mainly procedural and administrative rules for how the claim must be justified, approved before publishing the marketing material and presented in marketing.

What to do?

Now is the time to pay attention to your green marketing and ensure that the whole organisation knows the basic principles for prohibitions against misleading and false marketing in particular. Knowing the rules for environmental claims and presenting only justified environmental claims gives the company competitive advantage. In addition to legal consequences, illegal marketing can also substantially damage the company’s brand.