EU companies could soon be fined up to 4% of their profits – or even barred from public procurement contracts – if they are deemed to have made sustainability claims that are “too good to be true”.
The proposed Green Claims Directive aims to limit ‘greenwashing’ by requiring companies to have their green claims independently verified, and quantified using scientific evidence.
The directive will also require any emissions claims to be based on actual emissions reductions and not carbon offsetting.
It follows a study by the European Commission which deemed that 53.3% of environmental claims it examined were “vague, misleading or unfounded”, while 40% were “unsubstantiated”.
As well as facing fines of up to 4% of annual profits, and being barred from public procurement contracts, offending companies could also be denied public funding, including grants and concessions.
However, NGO the Environmental Coalition on Standards (ECOS) has warned the directive does not introduce a single approach to measuring impact, which it claims will result in an array of methodologies being used, creating conflicting reporting standards.
ECOS programme manager for environmental information and assessment, Margaux Le Gallou, said: “Without harmonised methodologies at the EU-level, the new directive will provide little clarity to consumers and business, and will only complicate the job of market surveillance authorities.”
She added: “Today, most green claims are too good to be true and the proposal is far from the real green deal.”
Changing Markets Foundation campaigns director Nusa Urbancic added: “It is disappointing that the Commission stopped short of banning generic climate claims – a prevalent greenwashing tactic.
“Our research shows more than half of dodgy climate claims in food rely on offsets of dubious quality, misleading consumers into believing they’re buying products with reduced emissions.
“The latest Intergovernmental Panel on Climate Change report showed that we must rapidly reduce emissions from all sectors, so it is a shame that the Green Claims Directive is not turbocharging real climate solutions by banning these false claims.”
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