On 17 January the European Parliament adopted a new law against misleading sustainability information for products: the Directive on empowering consumers for the green transition (Green Transition Directive). The European Commission Proposal for a Green Transition Directive was published on 30 March 2022, as one of the initiatives of the European Green Deal. The proposal focuses on how companies communicate the sustainability, repairability, or environmental impact of their products. The Green Transition Directive means to work alongside the Proposal for a Green Claims Directive that will be more specific and elaborate on the conditions and requirements for substantiating environmental claims.
What is the Green Transition Directive about?
The Green Transition Directive aims to better inform consumers on the sustainability aspects of products and more specifically seeks to tackle greenwashing practices (i.e. misleading environmental claims), practices against premature ageing (i.e. practices of early obsolescence of goods) and the use of unreliable and unclear sustainability labels and information methods.
What will change?
The current legislative framework relevant for assessing environmental claims and misleading product information exists of rules on unfair commercial practices and misleading advertising laid down in local law of EU Member States. Consumer protection authorities furthermore often provide guidelines for the use of sustainability claims, such as the Dutch Consumer Protection Authorities Guidelines for Sustainability Claims.
The Green Transition Directive will:
- Prohibit the use of general environmental claims such as “environmentally friendly”, “natural”, “biodegradable”, “climate neutral” or “eco” without proof.
- Prohibit the use of compensation claims. This means that traders cannot claim that a product has a neutral, reduced or improved environmental impact based on carbon offsetting. Make producers and consumers focus more on the durability of goods.
- Ban unfounded durability claims which cover several practices including the inducing of consumers to replace products or parts of their products earlier than strictly necessary for technical reasons (e.g. presenting software updates as necessary when they only enhance functionality or the need to replace printer ink before the ink has run out), presenting goods as repairable when they are not or withholding information on the reduced functionality (e.g. saying that a washing machine will last for 5,000 washing cycles if this is not true under normal conditions) or when spare parts cannot be supplied or falsely claiming that repair is possible. In the future, guarantee information has to be more visible and a new, harmonised label will be created to give more prominence to goods with an extended guarantee period.
- Regulate and harmonize the use of sustainability labels, given the confusion caused by their proliferation and failure to use comparative data. In the future, only sustainability labels based on official certification schemes or established by public authorities will be allowed in the EU.
- Require that future environmental performance claims, such as "net zero by 2050," relate to clear, objective, and publicly available verifiable commitments. These future environmental performance claims must be based on detailed and realistic implementation plans that include measurable and time-bound targets and other relevant elements necessary to support its implementation (e.g. allocation of resources). Future environmental performance claims should be regularly verified by expert independent third parties and this information must be made available to consumers.
Next steps
The Green Transition Directive still needs to be approved by the EU Council, after which it will be published in the Official Journal. Member States will have 24 months to transpose the rules into national law.
Broader context of EU regulations in the field of ESG
The Green Transition Directive is accompanied by other important EU legislative initiatives and updates part of EU's broader policy and strategy toward a more sustainable, circular, and socially responsible economy that together will significantly impact the trading and marketing of goods in EU markets. This includes amongst others the Proposal for a Directive on common rules promoting the repair of goods (introducing new consumer rights for repairs), Green Claims Directive and the Proposal for an Ecodesign Regulation for Sustainable Products.
Contact our team
As the regulatory framework and monitoring/enforcement by authorities are reinforced, sustainability and compliance become top of mind. The European Commission
continues to pursue sustainability goals by updating multiple areas of law, including Consumer Protection rules, Competition Law, but also many Product Requirements- and Waste Management legislations.
Our Kennedy Van der Laan team guides companies through the multidisciplinary legal framework applicable to sustainability strategies and claims. Feel free to reach out to Renske Sinke and/or Tosca Bokhove if you have any questions.
