Greenwashing: How the EU is seeking to address false claims

In an effort to prevent greenwashing and improve transparency for consumers, the European Commission introduced a proposal for the Green Claims Directive in March.

Greenwashing is when an organization spreads false or misleading information to present an environmentally friendly image of itself.

A recent study by the European Commission looked at 150 environmental claims and found that 53.3% of them provided "vague, misleading or unfounded information on products' environmental characteristics."

Currently, unverifiable claims in the EU can be penalized under the Unfair Commercial Practices Directive. But according to Blanca Morales, senior coordinator for EU Ecolabel at the European Environmental Bureau, the existing legislation is not sufficient.

"It's an end-of-the-pipe solution," Morales told DW, adding that when authorities challenge a company's claims, the process involves an investigation which can take years.

"In the meantime, the harm is done because the claim is on the market and the companies are benefiting from their marketing argument," Morales said.

How will companies make legitimate green claims?

Under the Green Claims Directive, all claims about a product's sustainability would need to be backed up by evidence.

"No data, no claim," Morales said.

An independent claims verifier would be put in place to check companies' green claims, see that they have supporting evidence, and that the claims properly reflect the full life-cycle of products.

Additionally, companies would be required to provide a QR code on their packaging where consumers could see details about the claims and the evidence for them.

Setting a unified standard

Until now, most of the bigger legal challenges to greenwashing in Europe have come from individual member states. Last year, separate cases in Norway and the Netherlands both found claims about the sustainability of H&M products to be misleading.

Under the Green Claims Directive, companies would be held to the same standards across the European Union regardless of which member country they are marketing in.

Michael Wagemans, head of ESG & Sustainability at KPMG Belgium, says the directive will have a positive influence on business.

"The directive must be seen as an opportunity for companies," Wagemans said. "By being transparent with consumers, businesses can build trust and loyalty with their customers."

While the current directive is still at least a couple of years away from becoming law, companies that would be directly impacted have already begun to take notice.

"We are studying the proposal carefully and remain committed to working with governments, civil society and other businesses," a spokesperson for energy giant Shell told DW.

H&M's 'water saving denim'

To better understand how the Green Claims Directive would impact businesses, DW found a few green claims on the market and asked Blanca Morales for her opinion on whether or not they meet the directive's requirements.

On one of its labels (top picture), H&M claims that its product is manufactured in a way that uses less water. Morales noted that this claim is specific enough that it could hold up if the company can produce verifiable evidence to support it. But Morales expects that the phrase "conscious choice" wouldn't make the cut.

"It's a confusing and generic claim to use 'conscious'," Morales said. "It gives the impression that the entire product is sustainable. Even though the only guarantee here is the recycled content of the cotton."

Regarding this label, an H&M spokesperson said the company had "taken the decision to remove H&M's 'Conscious Choice' indicator from our online shop worldwide." This decision followed a case brought against H&M and Decathlon by a Dutch regulator.

Breitsamer's CO2-neutral honey

Seeing the label on Breitsamer's honey (above), Morales was quick to point out that the Green Claims Directive does not cover claims about fair trade business practices. In this case, only the claim that the product is CO2 neutral would need to be verifiable.

According to this label, "All Breitsamer Imker Gold Honeys are CO2 neutral — from the beekeepers to enjoying it at home." But it also notes that the product comes from Chile and Uruguay, whereas it was found on a shelf in Germany. So how exactly is the company neutralizing the carbon emissions of shipping this honey?

Today, companies can buy carbon offsets to justify neutrality claims. But many carbon offset schemes fail to offset carbon in the long term.

Under the Green Claims Directive, "They will need to be transparent, and to [clarify] what part of this corresponds to a reduction of emissions, and what part of the emissions are compensated for," Morales said.

If this product's CO2 neutrality is based on buying carbon offsets, for example, this would need to be specified.

A DW request to Breitsamer Honey for comment remained unanswered.

Shell's 'respecting nature' webpage

Shell is one of the largest oil companies in the world by market value and is among the top contributors to climate change, but its website has an entire section called "powering progress" that is full of green claims, including bullet points that highlight some of the company's green goals.

"I think these claims would fail to pass under the Green Claims Directive," said Morales, "Because the company needs to demonstrate that the environmental impacts for which they're making claims are significant to the full lifecycle of their product."

The claims here are focused on relatively minor aspects of Shell's business while completely ignoring its direct contribution to climate change — which is generally understood to be the biggest threat to biodiversity.

In a comment provided to DW, the Shell spokesperson said: "It's also important that Shell, like other energy companies whose oil and gas businesses are well known, is able to provide information to the public about our less widely known activities."

Edited by: Ashutosh Pandey