As consumers become more conscious of their impact on the planet, companies are under mounting pressure to demonstrate progress across sustainability dimensions and commit to increasingly ambitious targets. The European Union wants to make sure this doesn’t lead to overpromising as well — a phenomenon known as greenwashing where companies mislead consumers about how sustainable and green their products are.

The challenge of greenwashing

Currently, there are more than 230 active eco-friendly labels in the European Union — half of them only received weak verification or no verification at all to confirm their green status. In its latest attempt to tackle greenwashing and the proliferation of green labels, the EU introduced the Green Claims Directive.

Still in the proposal stage, the directive would go beyond inaccurate or exaggerated labelling to address all potential misrepresentations in any voluntary claim or statement that talks about the environmental impact of a product or service. This kind of EU action has been much anticipated since a 2020 EU study found that 53% of the environmental claims made about products it examined were vague, misleading, or unfounded; 40% were completely unsubstantiated by data or other evidence.

Reliable and verifiable information for consumers

Aiming to reduce the number of misleading or false environmental claims, the proposed Green Claims Directive focuses on ensuring that all the information on products or services provided to consumers is reliable, comparable and verifiable. The proposed directive is aimed at policing any messaging for consumers relating to the green or sustainable nature of a service or product. This would include claims, labels, and visualizations.  

The European Union's draft directive would establish a minimum standard for environmental claims, mandating that they are supported by recognized scientific evidence verified by a third party. However, the process of verifying claims should not be underestimated, as it involves coordinating numerous stakeholders in the verification landscape.

Stronger collaboration to reach sustainability goals

The Green Claims Directive would increase regulatory pressure on consumer communications and place additional pressure on upstream sustainability improvements. A notable trend is emerging, where companies recognize the importance of extending their sustainability efforts beyond their own operations and forging partnerships with suppliers. This collaborative approach enables companies to work collectively toward their own goals for cutting Scope 3 emissions and on their suppliers’ Scope 1 and 2 emissions. They also would be able to coordinate efforts to preserve nature.

Establishing consistent and verifiable messages compliant with the proposed legislation will necessitate collaboration among all business units on sustainability initiatives and policies. Companies can no longer rely solely on their own product teams to develop and bring to market sustainable offerings. All departments must become key stakeholders in achieving the overarching sustainability objectives. Particularly procurement needs to shift gears and work more closely with upstream suppliers to enable the transition.