On 22nd of March 2023 a proposal of the Directive of the European Parliament and of the Council on substantiation and communication of explicit environmental claims (Green Claims Directive) has been published. This Directive intends to to harmonise further the regulation of environmental claims. Such harmonisation will strengthen the market for more sustainable products and traders by avoiding market fragmentation due to diverging national approaches. The Proposale of the Directive states that penalties can be imposed: Member States shall ensure that when penalties are to be imposed in accordance with Article 21 of Regulation (EU) 2017/239449, the maximum amount of such fines being at least at 4 % of the trader’s annual turnover in the Member State or Member States concerned.
The Directive shall not apply to sustainability information involving messages or representations that may be either mandatory or voluntary pursuant to the Union or national rules for financial services, such as rules relating to banking, credit, insurance and re-insurance, occupational or personal pensions, securities, investment funds, investment firms, payment, portfolio management and investment advice, Furthermore, this Directive should not apply to environmental information reported by undertakings that apply European sustainability reporting standards on a mandatory or voluntary basis.
The Proposal of the Directive can be found here.
Substantiation of explicit environmental claims
Member States shall ensure that traders carry out an assessment to substantiate explicit environmental claims. This assessment shall:
(a) specify if the claim is related to the whole product, part of a product or certain aspects of a product, or to all activities of a trader or a certain part or aspect of these activities, as relevant to the claim;
(b) rely on widely recognised scientific evidence, use accurate information and take into account relevant international standards;
(c) demonstrate that environmental impacts, environmental aspects or environmental performance that are subject to the claim are significant from a life-cycle perspective;
(d) where a claim is made on environmental performance, take into account all environmental aspects or environmental impacts which are significant to assessing the environmental performance;
(e) demonstrate that the claim is not equivalent to requirements imposed by law on products within the product group, or traders within the sector;
(f) provide information whether the product or trader which is subject to the claim performs significantly better regarding environmental impacts, environmental aspects or environmental performance which is subject to the claim than what is common practice for products in the relevant product group or traders in the relevant sector;
(g) identify whether improving environmental impacts, environmental aspects or environmental performance subject to the claim leads to significant harm in relation to environmental impacts on climate change, resource consumption and circularity, sustainable use and protection of water and marine resources, pollution, biodiversity, animal welfare and ecosystems;
(h) separate any greenhouse gas emissions offsets used from greenhouse gas emissions as additional environmental information, specify whether those offsets relate to emission reductions or removals, and describe how the offsets relied upon are of high integrity and accounted for correctly to reflect the claimed impact on climate;
(i) include primary information available to the trader for environmental impacts, environmental aspects or environmental performance, which are subject to the claim;
(j) include relevant secondary information for environmental impacts, environmental aspects, or environmental performance which is representative of the specific value chain of the product or the trader on which a claim is made, in cases where no primary information is available.
Substantiation of comparative explicit environmental claims
The substantiation of explicit environmental claims that state or imply that a product or trader has less environmental impacts or a better environmental performance than other products or traders (‘comparative environmental claims’) shall, in addition to the requirements set out in Article 3, comply with the following requirements:
(a) the information and data used for assessing the environmental impacts, environmental aspects or environmental performance of the products or traders against which the comparison is made, are equivalent to the information and data used for assessing the environmental impacts, environmental aspects or environmental performance of the product or trader which is subject to the claim;
(b) the data used for assessing the environmental impacts, environmental aspects or environmental performance of the products or traders is generated or sourced in an equivalent manner as the data used for assessing the environmental impacts, environmental aspects or environmental performance of the products or traders against which the comparison is made;
(c) the coverage of the stages along the value chain is equivalent for the products and traders compared and ensures that the most significant stages are taken into account for all products and traders;
(d) the coverage of environmental impacts, environmental aspects or environmental performances is equivalent for the products and traders compared and ensures that the most significant environmental impacts, environmental aspects or environmental performances are taken into account for all products and traders;
(e) assumptions used for the comparison are set in an equivalent manner for the products and traders compared.
Requirements for environmental labelling schemes
Environmental labelling scheme means a certification scheme which certifies that a product, a process or a trader complies with the requirements for an environmental label.
The environmental labelling schemes shall comply with the following requirements:
(a) information about the ownership and the decision-making bodies of the environmental labelling scheme is transparent, accessible free of charge, easy to understand and sufficiently detailed;
(b) information about the objectives of the environmental labelling scheme and the requirements and procedures to monitor compliance of the environmental labelling scheme are transparent, accessible free of charge, easy to understand and sufficiently detailed;
(c) the conditions for joining the environmental labelling schemes are proportionate to the size and turnover of the companies in order not to exclude small and medium enterprises;
(d) the requirements for the environmental labelling scheme have been developed by experts that can ensure their scientific robustness and have been submitted for consultation to a heterogeneous group of stakeholders that has reviewed them and ensured their relevance from a societal perspective;
(e) the environmental labelling scheme has a complaint and dispute resolution mechanism in place;
(f) the environmental labelling scheme sets out procedures for dealing with non-compliance and foresees the withdrawal or suspension of the environmental label in case of persistent and flagrant non-compliance with the requirements of the scheme.
The Proposal of the Green Claims Directive is another Directive (besides Supply Chain, Sustainability Reporting and Sustainable Finance) that tries to set benchmarks for the transition to a green economy. Contact us, if your want to prepare your company for the future.