Picture this: a world where businesses don’t just thrive financially, but leave a positive impact on the natural world around us.  

That’s the crux of the ongoing drive for sustainability, which is still gaining momentum with each passing month. In a bid to accelerate the rate of meaningful change, the European Commission has proposed the Green Claims Directive – but what is it for? 

This directive aims to combat greenwashing and establish clear rules for companies operating in the European Union (EU) regarding their environmental claims, designed with B2B and B2C protections in mind. The initiative, and its goals, are similar to the UK Green Claims Code – click here to read our perspective. 

The proposed requirements will have far-reaching implications for businesses across various industries, including the print and packaging sector. For businesses that operate across the European continent, it’s vital that this new directive, and its scope, are clearly understood. 

Understanding the EU Green Claims Directive 

On March 22, 2023, the European Commission proposed the Green Claims Directive to address concerns regarding misleading environmental messaging and greenwashing. Greenwashing is the term used to describe exaggerated or distorted sustainability claims, which ultimately harm consumer trust as well as being a poor reflection of a company’s true environmental impacts.  

In short, the directive sets out comprehensive guidelines on how companies should market their environmental performance. Notably, compliance with these guidelines will require companies to adhere to tight regulation in how they substantiate, communicate, and verify their environmental claims. 

So, what constitutes an environmental claim? To quote the European Commission, 

“The proposal on empowering consumers for the green transition defines an environmental claim as any message or representation, which is not mandatory under Union law or national law, including text, pictorial, graphic or symbolic representation, in any form, including labels, brand names, company names or product names, in the context of a commercial communication, which states or implies that a product or trader has a positive or no impact on the environment or is less damaging to the environment than other products or traders, respectively, or has improved their impact over time.” 

Click here to read the proposed directive in full. 

The scope of the directive 

The Green Claims Directive encompasses a wide range of claims made to EU consumers regarding products, services, or organisations that imply a positive effect on the environment or the natural world.  

This includes phrases that are often saturated in marketing, such as “carbon neutral,” “net zero,” and “made from recycled plastic.” However, it does not cover mandatory claims or claims already regulated, such as labels for organic food, fuel economy, carbon emissions of cars, energy efficiency of products, and annual sustainability reporting.  

Similar to the pillars of the UK Green Claims Code, the EU initiative sets out nine minimum criteria that must be met. These are that the assessment must: 

• Use recognised and substantiated scientific evidence, and state-of-the-art technical knowledge 
• Demonstrate the significance of impacts from a lifecycle perspective 
• Take into account all significant aspects and impacts to assess performance 
• Demonstrate whether the claim is accurate for the whole product, or certain parts of it 
• Show that the claim is not equivalent to requirements imposed by law 
• Provide information on whether environmentally, the product performs significantly better than common practice 
• Identify whether a positive achievement leads to significant worsening of another impact 
• Reported greenhouse gas offsets in a transparent manner 
• Include accurate primary or secondary information 

The Green Claims Directive will apply to most EU operating companies, from small and medium-sized enterprises (SMEs) to large public companies, and even companies outside the EU that target EU consumers. Under the proposal, businesses with fewer than 10 employees or generating less than €2 million in annual turnover, will be exempt. 

Preparing for compliance 

Preparation is key, so businesses must establish a robust environmental claims management framework centred around integrity, transparency, and data verification.  

The penalty for non-compliance will be determined individually by the relevant EU Member State, but the initial guideline from the European Commission states: 

“When setting penalties and measures for infringements, the Member States should foresee that, based on the gravity of the infringement, the level of fines should effectively deprive the non-compliant trader from the economic benefit derived from using the misleading or unsubstantiated explicit environmental claim or non-compliant environmental labelling scheme, including in cases of repeated infringements.” 

A comprehensive claims management system will include processes to gather and analyse environmental data across the value chain, conduct product life cycle assessments (LCAs), and update internal guidelines for communication.  

Moving conversation forwards 

From our perspective at PHD Marketing, one of the most noteworthy aspects is this focus on life cycles. Real clarity and honesty in sustainability claims mean that the entire end-to-end journey of a product must be understood, and that today we cannot view sustainability in small, siloed parts.  

Instead, it’s a connected whole.  

While for businesses operating in the EU, the proposed Green Claims Directive presents significant compliance challenges and costs, it’s also an opportunity to shore up CSR initiatives and, like the UK Green Claims Code, bring meaning and significance back to sustainability.   

It remains to be seen whether the EU Green Claims Directive will move beyond the proposal stage to become legislation and what that looks like in practice for businesses.  

Clear communications begin with outstanding support. At PHD Marketing, we support our clients in print, packaging, life sciences, technology and beyond, with communications services that are thoughtful, reach the right audience, and cut through endless market noise. 

Looking to boost your signal or find your brand voice in a changing market? Trust the PHD team to help. Get in touch with our team today at [email protected]