by Judit Szalatkay
As consumers become increasingly concerned about the environmental impact of their purchasing, companies tend to exploit the commercial possibilities of such worries by advertising their products with certain environmental performance. In several cases, green claims are proved to be misleading in lack of compelling evidence under the UCP Directive. Recently the European Commission has adopted proposals for legal actions in order to tackle false environmental claims more efficiently. But what about those generic claims like ʽclimate-neutral’ or ʽcarbon-neutral’, are the proposals strict enough to deter companies from using such “magic words” without real justification?
Meanwhile I was doing my weekly shopping suffering from the heat, I was wondering how I will bear the forthcoming summers if the average temperature rises. Driving on the way I saw the ad about ʽclimate-neutral’ fuelling, then in the supermarket I tried to pay attention what I put into my basket: ʽcarbon-neutral’ pizza, ʽeco-friendly’ cleaning agent, ʽsustainable’ soft drinks, ʽenvironmental-friendly’ milk. Next time I may ask a ʽ100% electrical’ home-delivery. But are these products indeed more environmental-friendly? Could I really make anything for a more livable, greener Earth?
As it is shown by several studies,[1] consumers are willing to contribute to a greener economy in their everyday lives and take into account the environmental footstep of their consumption in their consumer decisions. Nevertheless, the ubiquity of misleading commercial practices related to greenwashing undermine the trust in the credibility of such environmental claims.
Under the 2005/29/EC Directive (ʽUCP Directive’),[2] when assessing a commercial claim – among others, a claim related to the environmental performance of a product – law enforcement applies average consumers as its benchmark: how would they understand or interpret the claim (a text or a label)? If the trader cannot substantiate its green claim, it will be deemed misleading.
In Europe there are several judgments and on-going proceedings against traders because of unfounded green claims such as ʽeco’, ʽenvironment friendly’ or ʽclimate-neutral’. In Sweden, a dairy company was convicted for a misleading green advertisement because it has advertised its products being climate neutral, despite a lack of solid evidence to support such claims.[3] The UK Advertising Standards Authority has taken enforcement actions against airlines, banks, fashion retailers and energy companies for stating deceptive claims. Germany is also quite active in this field: a raft of decisions from German courts have dealt with greenwashing claims brought by several consumer protection associations. The Hungarian Competition Authority also delivered some decisions in the field of greenwashing. A judicial or administrative procedure is time-consuming, and authorities are fighting against windmills considering the prevalence of using such green claims among traders (and who knows how big its environmental footstep).
As part of the European Green Deal, European lawmakers have committed themselves to fight against global warming by, among others, establishing unambigous and strict legal acts. In order to tackle the false environmental claims more efficiently, the European Commission issued a proposal for the amendment of the UCP Directive[4] in 2022, which was followed by the Green Claims Directive proposal[5] in 2023.
The proposed amendment of the UCP Directive prohibits – in all circumstances – generic environmental claims such as ʽeco-friendly’, ʽcarbon-neutral’, ʽgreen’, ʽclimate-neutral’ which are not based on recognised excellent environmental performance relevant to the claim.
In reality, traders often plan to achieve better environmental performance rather through carbon-offsetting or compensation projects than the effective reduction of their carbon emission. This kind of business approach is questionnable: the verification of a carbon offsetting project is difficult, and I wonder if any exact, clear and equivocal method could exist to calculate the real effect of a compensation scheme. In the beginning of this year, one could read in the newspapers that a nine-month investigation revealed that the activity of a popular US-based company („Verra”) involved in the offsetting business has been practically useless, since evidence showed that 94% of the carbon credits had no benefit to the climate.[6]
Therefore it sounds reasonable that the European Parliament has suggested[7] to add to the proposed amendment of the UCP Directive that the environmental claim should be banned when it is based solely on offsetting of environmental impacts, such as purchasing of carbon credits. This rule would be clear-cut, which gives no room for juggling to substantiate a claim that cannot be verified beyond doubts (in lack of an objective, inarguable scientific method).
Complementing the UCP Directive, the Green Claims Directive Proposal establishes the basic requirements for substantiation of explicit environmental claims.
This Green Claims Directive acknowledges that certain climate-related claims like ʽclimate neutral’, ʽcarbon neutral’, ʽ100% CO2 compensated’ are particularly prone to being unclear and ambiguous and to misleading consumers. These claims are often based on offsetting of greenhouse gas emissions through carbon credits which are generated outside the company’s value chain. The calculations of the efficiency and real value of the offsets are not always transparent, accurate or consistent which „leads to significant risks of overestimations and double counting of avoided or reduced emissions, due to a lack of additionality, permanence, ambitious and dynamic crediting baselines that depart from business as usual, and accurate accounting. These factors result in offset credits of low environmental integrity and credibility that mislead consumers when they are relied upon in explicit environmental claims”.[8] Despite these concerns, the proposal doesn’t establish a clear ban on using carbon-offset or compansation to underpin a green claim. It only declares that the trader shall indicate separately which part of its greenhouse gas emissions stems from it own emission reduction and which part stems only from offsets, as well as shall describe how the offsets relied upon are of high integrity and accounted for correctly to reflect the stated impact on climate. This additional information shall be made available together with the claim in a physical form or in the form of a weblink, QR code in a clear and understandable way.
In practice, it means that if a consumer wants to make a conscious and green decision and wants to know whether the stated carbon-neutrality of a good is originated from a real carbon-reduced production or simply reached by compensating with carbon credits, he or she must read the QR code or hiperlink of the good and read this additional information.[9] This rule shifts more burden to the consumer and isn’t too realistic considering the fact how much time we have for shopping.
In its opinion, the European Economic and Social Committee (EESC) expresses concerns about the proliferation of environmental claims based on compensation via the use of offsetting credits and calls on the Commission to introduce a clear ban on claims based on offsetting.[10]
As scientists say, there’s no time for delay: we must act radically, otherwise it will be late. We can give compromises, we can soften the rules, we can search for legal loopholes, but facts are clear. Average global temperatures have risen significantly since the industrial revolution and the last decade (2011–2020) was the warmest one. Scientists consider an increase of 2°C (compared to the end of the 19th century) as a threshold with dangerous and catastrophic consequences for climate and the environment.[11]
Back to my shopping concerns: if I choose to buy a product which is labelled as ʽclimate-neutral’, I definitely want from the seller (producer or trader) of the product to do his bits for carbon emission reduction in the course of his own business, and not only pays for a vague compensation project. I may not be the one and only consumer with these high expectations.
[1] i.e. European Commission, Behavioural Study on Consumers’ engagement in the circular economy, 2018
[2] Directive of the European Parliament and of the Council concerning unfair business-to-consumer commercial practices in the internal market and amending Council Directive 84/450/EEC, Directives 97/7/EC, 98/27/EC and 2002/65/EC of the European Parliament and of the Council and Regulation (EC) No 2006/2004 of the European Parliament and of the Council
[3] https://www.badverts.org/latest/dairy-company-arla-convicted-for-misleading-green-advertising
[4] Proposal for a directive of the European Parliament and of the Council amending Directives 2005/29/EC and 2011/83/EU as regards empowering consumers for the green transition through better protection against unfair practices and better information COM/2022/143 final
[5] Proposal for a directive of the European Parliament and of the Council on substantiation and communication of explicit environmental claims (Green Claims Directive) COM/2023/166 final
[6]i.e. https://www.theguardian.com/environment/2023/jan/18/revealed-forest-carbon-offsets-biggest-provider-worthless-verra-aoe
[7] https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CONSIL:ST_9374_2023_INIT
[8] Green Claims Directive, recital (21).
[9] See Green Claims Directive, Article 6, paragraph (6)
[10]https://eur-lex.europa.eu/mwg-internal/de5fs23hu73ds/progress?id=hlF-wqkHWDY-fFp-Yqbdri-sxCaO8-LLLJOiZy-JHFE,&dl point 1.4.
[11]https://www.europarl.europa.eu/news/en/headlines/society/20180703STO07123/climate-change-in-europe-facts-and-figures
