Engerer report on business greenwashing claims heads for plenary vote

A report by Labour MEP Cyrus Engerer proposing penalties and even confiscation of revenues on false environmental claims, will go to the plenary for a vote after the Internal Market and Environment committees adopted the proposal on how firms validate their environmental marketing claims.

The so-called Green Claims Directive complements the already-approved EU ban on greenwashing by defining what kind of information companies have to provide to justify their environmental marketing claims in the future. It also creates a framework and deadlines for checking evidence and approving claims, and specifies what happens to companies who break the law.

Studies show that 50% of companies’ environmental claims are misleading. MEPs now want companies to submit any future environmental marketing claims for approval before using them.

The claims would be assessed by accredited verifiers within 30 days, according to adopted text. Companies who break the rules may be excluded from procurements, lose their revenues and face a fine of at least at 4% of their annual turnover.

“It is time to put an end to greenwashing. Our agreement on this text ends the proliferation of deceitful green claims which have tricked consumers for far too long,” said Labour MEP Cyrus Engerer (S&D). “It also ensures that businesses have the right tools to embrace genuine sustainability practices. European consumers want to make environmental and sustainable choices and all those offering products or services must guarantee that their green claims are scientifically verified.”

The Commission can draw up a list of less complex claims and products that could benefit from faster or simpler verification, and decide whether green claims about products containing hazardous substances should remain possible.

MEPs also agreed that micro-enterprises should be excluded from the new obligations and SMEs should get one extra year before applying the rules.

And while a recent EU ban disallows green claims based solely on so-called carbon offsetting schemes, companies will now be able to mention offsetting schemes if they have already reduced their emissions as much as possible and use these schemes for residual emissions only. The carbon credits of the schemes must be certified, as established under the Carbon Removals Certification Framework.

Special rules would also apply to comparative claims – ads comparing two different goods –  including if the two products are made by the same producer. Among other provisions, companies should demonstrate they have used the same methods to compare relevant aspects of the products. Also, claims that products have been improved cannot be based on data that are more than five years old.

Estonian co-rapporteur Andrus Ansip (Renew) said consumers and entrepreneurs deserve transparency, legal clarity and equal conditions of competition. “Traders are willing to pay for it, but not more than they gain from it. I am pleased that the solution proposed by the committees is balanced, brings more clarity to consumers and at the same time is, in many cases, less burdensome for businesses than the solution originally proposed by the Commission.”