New Rules for Environmental Claims
The EU Green Claims Directive is a new legislation that aims to regulate the way companies in the European Union advertise their environmental claims.
This directive requires companies to provide clear and transparent evidence to support any environmental claims they make. This also prohibits false or misleading statements about the environmental impact of their products or services.
This comes as a result that over half of environmental claims on products are misleading or unsupported in the EU, and 40% of claims do not have any evidence supporting their green credentials.
Companies, from now on, must provide proof to support any environmental claims they make, including claims about biodegradability, recyclability, or energy efficiency of their products.
To find out if your company is required to comply with CSRD, try out our CSRD Quick Check and discover more.
What are the new laws for commercial claims?
Starting from 2024 to 2027, all claims must be verified by an accredited third party and based on scientific evidence and technical knowledge from a life cycle perspective before being used.
Companies must back up their environmental claims with company-specific data and revisit them every 5 years. Traditional manual methods are no longer valid.
What are the penalties for non-compliance?
Companies that fail to comply with the directive may face penalties, such as fines or legal action.
Penalties can be significant, with fines of at least 4% of a company’s annual turnover, confiscation of revenue gained from related products, ban from access to public funding, and exclusion from public procurement processes for up to 12 months.
What is the enforcement process for the EU Green Claims Directive?
The new directive will be applied to all businesses selling in the EU except for micro-enterprises with an annual turnover of less than €2 million and fewer than ten employees. This directive is enforced by member states.
However, even small businesses are subject to the Unfair Commercial Practices Directive, which means that consumers can make complaints and seek legal action if they are affected by any misleading claims.
Final Words
The EU Green Claims Directive is a significant step towards ensuring that environmental claims made by companies are accurate and substantiated.
To avoid penalties, businesses and organizations need to ensure they comply with these new rules. On the other side, consumers can now gain trust in the environmental claims made by companies.
