The directive (draft available HERE) is intended to create EU-wide standards for the identification, substantiation and advertising of green claims. What new elements does the draft contain?
A. Scope of application and exceptions
The new rules are intended to apply to all voluntary advertising claims made by traders to consumers (B2C) regarding environmental claims in text form or in the form of an environmental label, including corresponding “green” brand names and product names. This includes classic green claims such as “CO2-neutral” and “climate-neutral” as well as “recyclable” or “reef-friendly” (for sunscreen products). Both product-related and company-related advertising claims are to be included.
The new requirements should not apply to micro-enterprises (with the possibility of opting in), i.e. to companies with fewer than 10 employees or with annual sales or total assets of up to EUR 2 million.
B. Substantiation of and Advertising with Green Claims
Art. 3 of the draft contains numerous requirements for the substantiation of environmental advertising claims. The trader shall be obliged to subject these statements to an evaluation. In particular, it is to be specified whether the claim refers to the entire product, only to parts or partial aspects of the product, or to the trader as a whole, or only to individual parts of his activities. The assessment must be based on accepted scientific evidence and must also demonstrate that the advertised environmental impacts are significant over the life cycle. Part of the assessment is also whether the improvement of the advertised parameter is accompanied by a deterioration of other environmental parameters. Also, offsets of greenhouse gas emissions must be separated from the corresponding emissions, and it must be stated whether such offsets are achieved by reducing or removing the emissions.
Special provisions have been made for the group of cases in which a trader attributes better environmental performance to itself or its product (Art. 4 of the draft). Here, it must be ensured, among other things, that the comparison is based on equivalent information and data on both sides or that these are obtained by comparable means. In addition, any assumptions for such a comparison must be made uniformly for all objects of comparison.
Green claims in this sense may only be communicated if the statements they contain have been substantiated in accordance with the methodology just briefly outlined and if they are sustantial. What is also new is that advertising claims referring to a final product must contain information on how the consumer should use it in order to achieve the advertised environmental performance.
In case of an advertisement with future environmental benefits, it must contain a time-bound commitment regarding improvements in the advertiser’s own processes.
The specific information on the environmental claim must be published together with it, either in physical form, via a link to a website or by means of a QR code. At a minimum, this must include the following:
- environmental aspects, environmental impacts or environmental performance that are the subject of the advertisement,
- the relevant European standards or, where applicable, relevant international standards,
- the underlying studies or calculations for the identification and monitoring of the relevant environmental aspects, including their results, and explanations of their scope, assumptions and limitations, unless they are a trade secret,
- a brief explanation of how the advertised improvements will be achieved,
- a specific certificate of compliance supporting the claim (see below) and the contact details of the issuer of the certificate,
- for explicit environmental claims that are climate-related and that rely on offsets of greenhouse gas emissions, information on the extent to which they rely on offsets and whether they relate to reductions or removals of emissions and
- an understandable summary of the assessment in at least one of the official languages of the Member State in which the claim is used.
C. Regulations on environmental labels
The creation of new environmental labels is to be curbed in the future. In the future, no such labels are to be created at the national level. Labels from public bodies will require the approval of the European Commission. New private labels can only be created if they bring additional benefits for the environment. All labels must contain substantiated criteria, provide certain information and also be certified by an independent third party.
D. Conformity assessment for green claims
Completely new and of great importance are the regulations in Art. 10 and 11 on the verification of certification of environmental claims to be introduced by the Member States. In future, before a green claim can be used, it must have been verified by an independent third party, the verifier. The same applies to the use of an environmental label. This verification includes in particular the substantiation of the corresponding claim(s) by the trader. If the result of the verification is positive, a special certificate of conformity shall be issued, certifying compliance with the requirements of this Directive. This certificate shall then be recognized by the competent authorities of all Member States.
The sanctions provided for in the draft in the event of violations of the new regulations are also worth a look. Member States are required to impose fines for such violations, to siphon off the revenues generated by such violations and to exclude companies from public contracts for a period of up to one year. It is noteworthy that the maximum amount of such a fine is to be at least 4 percent of the trader’s annual turnover in the member states concerned.
The new draft will noticeably restrict the possibilities of advertising with the green claims, which are becoming more and more important in practice. The company will not only have to substantiate corresponding claims, as it has already done to a certain extent. It will also have to commission an external third party to have its planned green claim checked and certified in advance. This will lead to new costs in order to meet these requirements.
Otherwise, there is the threat not only of competition law “thumbscrews” but also of further severe sanctions. On the plus side, however, there is a certain legal certainty that such certificates provide (vis-à-vis authorities) throughout the EU.
Companies that are planning green claims or for which such advertising claims are already central today, should prepare themselves for the foreseeable new requirements. In particular, the substantiation of the corresponding advertising claims can already be addressed today, which is of course already advantageous in corresponding competition law proceedings. This should then also facilitate the future formal step of certifying such a claim.
Do you have any questions about this news, or would you like to discuss it with the author? Please contact: Dr. Florian Niermeier