Over half of European consumers are now taking into consideration the environmental impact of their purchases acording to the EU Commission’s 2020 Key Consumer Data. This increasing demand for transparency is reflected in consumers’ willingness to vote with their wallets, with 67% expressing a preference for environmentally friendly products, even if they come at a premium. The surge of this consumer trend has opened up a lucrative opportunity for the proliferation of ‘green’ labels from all types of industries, with food not the least of them.
However, this opportunity has also exposed a concerning truth: more than half of green claims lack clarity, are misleading, or lack a solid foundation. Furthermore, nearly half of the 230 eco-labels available in the EU lack robust verification procedures. We’re also seeing a rise in climate litigation, with several of the most high-profile cases found in Europe. In response to this complex landscape, the European Commission has introduced the Green Claims Directive to bridge the gap between consumers’ demand for transparency and organizations’ obligation to communicate sustainability efforts transparently.
In this article, we will delve into the key aspects of the proposed directive, outlining its requirements for agri-food companies and suggest pragmatic actions to start taking to steer clear of the pitfalls of greenwashing so that you can deliver facts and not just mission statements.
Key points about the Green Claims Directive
The directive’s 80-page proposal published in March 2023 seeks to address the issue of greenwashing by introducing precise and uniform regulations governing environmental claims made by businesses and organizations operating within the European Union. Here are the key points that stand out:
- Prohibition of making vague or generic claims such as “environmentally friendly,” “eco,” or “green” to prevent misleading sustainability impressions
- Mandated substantiation of claims through the communication of milestones and specific dates
- Required disclosure of any negative environmental impacts resulting from positive claims
- Imposed penalties for non-compliance, as enforced by Member States
The directive will only apply to voluntary environmental claims made in the EU and only applies to business-to-consumer communication. It will also exclude mandatory claims covered by existing regulations such as labels marketing organic food and feed, labels relating to the energy efficiency of products, and annual sustainability reporting (CSRD).
Most companies operating in the EU will be impacted, except those in sectors with their own environmental claim rules (like financial services) and micro-SMEs with fewer than 10 employees or less than €2 million in annual turnover.
The directive is currently in the legislative process but once enacted, EU Member States will be granted 18 months to incorporate it into their laws. While there could potentially be some revisions to the final text, the directive is slated to be applicable from 2026.
In addition to the proposed directive, as of September 2023, the EU parliament and council have reached a provisional agreement on new rules to ban greenwashing. While we won’t see this incorporated into member states’ laws until perhaps early 2026, generic environmental claims such as “environmentally friendly”, “natural”, “biodegradable”, “climate neutral” or even “eco” could be a thing of the past across products sold in Europe. A vote by Members of the European Parliament (MEPs) is expected to take place in November 2023 and we’ll be sure to share an update on this.
What is required of agri-food companies
Sustainability marketing is proving to be a boon for Consumer Packaged Goods (CPG), of which the food industry makes up its largest segment. Data from 2014 shows that 75% of products on the EU market carried an implicit or explicit environmental claim
“The proliferation of greenwashing is hampering the green transition: it hinders consumers’ ability to make informed sustainable choices, and makes it harder for the companies that strive to reduce their environmental impacts to differentiate themselves from free riders. We need clear EU rules to wipe out greenwashing claims, and we need companies to provide the evidence behind their credentials: no data, no claim.”— Blanca Morales, Senior Coordinator for EU Ecolabel, European Environmental Bureau (EEB)
This is exactly why the Green Claims Directive has been proposed, to separate the companies working in earnest on their sustainability initiatives from the “free riders”. To make sure you fall under the right category of companies, here are 3 requirements under the directive:
1. Substantiating claims
To be able to substantiate any claims, they must be backed by scientific evidence and comprehensive Life Cycle Assessments. For instance, if you claim to have reduced GHG emissions for a certain product, its calculation should be based on recognized standards such as ISO 14064, GHG Protocol, or Bilan Carbone. In addition, when comparing your product to others, it is essential to ensure that the comparison is based on equivalent information and data.
2. Communicating claims
With the Directive coming into effect, you must exercise even greater caution and precision in the way you communicate and phrase your claims. Notably, one of the articles in the proposal extensively addresses banning the use of environmental labels or scores developed outside of the EU that aggregate environmental impacts. According to the proposal, this is because aggregated scoring presents a risk of misleading consumers as such labels usually differ in terms of specific methodology, which may result in the same product receiving a different score or rating depending on the scheme. However, Eco-Score labels will be allowed under the directive as this aggregate scoring is set in EU rules.
Another important part of the proposal: if you make a claim, you have to show proof. Organizations must ensure that the supporting information and data are readily accessible to the public, typically through a hyperlink, QR code, or a similar means.
In France, under the Climate and Resilience Law which requires environmental labeling for several products, including food, companies will no longer be able to throw around vague claims such as “our product is carbon neutral” or similar, and will instead require concrete language:
Our organization is committed to collective carbon neutrality with a target of reducing direct carbon emissions by X% by 2025 and Y% by 2030compared to year n. These targets are consistent with the science and global goal of limiting temperature increase to +1.5°C.
3. Verifying claims
To ensure the accuracy of your environmental claims, you are required to undergo an independent third-party audit. This process typically entails enlisting the services of an external environmental consulting firm, an impartial auditor, or a certified public accountant (CPA) to scrutinize your data collection procedures, validate your calculations, and confirm the veracity of your declarations.
Strategic steps to avoid the pitfall of greenwashing
The Green Claims Directive may not have entered into force yet but a lot of preparation must go into laying the groundwork, especially for companies looking to communicate product sustainability claims. To steer clear of greenwashing, we recommend the following concrete steps you and your team can start applying:
1) Define clear ambitions
To begin, it’s crucial to define sustainability in a way that aligns with your organization’s goals. In the agri-food industry, this might involve initiatives such as collaborating with suppliers to disclose emissions data (Scope 3) or developing recipes with a lower environmental footprint. Your sustainability goals should align with areas where you can make a meaningful impact. Set clear objectives with defined milestones that have a specific timeline.
If you are particularly aiming to set GHG emissions targets, we highly recommend first submitting targets to SBTi (Science Based Targets Initiative). Not only will your reduction targets be aligned with the latest climate science and the Paris Agreement, your targets are also set with a clear timeline either for the near term (5–10 years) or for the long term (by 2050 or sooner). SBTi targets are also independently verified which would further enhance your credibility.
Here’s an example of a clearly defined ambition as per the Kellogg Company’s SBTi Targets:
Kellogg Company commits to a 15% reduction in emissions (tonne of CO2e per tonne of food produced) by 2020 from a 2015 base-year (scopes 1 & 2). Kellogg commits to reduce absolute value chain emissions by 20% from 2015–2030 (scope 3). Kellogg also has a long-term target of a 65% absolute reduction in emissions by 2050 from a 2015 base-year (scopes 1 & 2) and to reduce absolute value chain emissions by 50% from 2015–2050 (scope 3).
2) Use a credible calculation tool
As the proposal requires substantiation of claims based on recognized scientific evidence that takes into account all aspects and impacts assessing a product’s performance, conducting Life Cycle Assessment (LCA) on your products would be the most reliable source for environmental data that is verifiable. To ensure that you have the right data to back your communications and that you’re adhering to regulations, you must use an LCA tool whose calculations are based on standards and models validated by the scientific community (GHG Protocol, ISO 14040 & 14044, IPCC).
Carbon Maps’ platform features automated LCA of entire product portfolios of agri-food organizations. Our auditable calculations that track multiple key indicators — GHG emissions, water consumption, biodiversity — not only give you a holistic analysis of your product’s environmental footprint, they also open you up to more opportunities for communicating your sustainability efforts, as well as track your suppliers’ environmental engagement. Reach out to us if you’d like to know more: email@example.com
3) Commit to regular communication
Highlighting progress in your sustainability efforts is important, but your communications should prioritize transparency over solely positive messaging. If you miss targets, openly acknowledge the extent of the shortfall and outline your strategies for future success. Sharing unbiased benchmark data can also provide valuable insights to your audience. It’s worth noting that in France, under the Climate and Resilience law, reports that back any claims must be updated annually.
Another thing to note is that the directive particularly underscores claims that include carbon offsets. You must be transparent about what part of your claim relies on buying offsets. For a solid, long-term strategy, more focus should be put on reducing emissions in your own organization or within your value chain instead.
In summary, to make trustworthy green claims, make a habit of asking yourself these key questions:
- Is my claim accurate? ➡️ Ensure claims are accurate, clear, and specific, avoiding vague terms like “green” or “eco friendly.”
- Does my claim tell the whole story? ➡️ Present comprehensive information, avoiding cherry-picking positive aspects while ignoring negatives. Claims should be verifiable and not exaggerated.
- Is the science behind my claim sound? ➡️ Use trusted accounting software, avoid non-EU-based aggregate scores, and solicit third-party audits to ensure the accuracy of your calculations.
The EU Green Claims Directive may face a winding bureaucratic path before becoming law, but one undeniable truth stands out: a growing wave of consumers are acquiring the ability to differentiate between genuine climate initiatives and mere marketing rhetoric.