On September 19, 2023, the legislative bodies of the European Union (EU) Parliament and the EU Council announced a provisional agreement on new rules aimed at protecting consumers from misleading sustainability claims and greenwashing practices.

This proposal intends to amend the Unfair Commercial Practices Directive (UCPD) and the Consumer Rights Directive (CRD), aligning them with the green transition to enhance consumer rights.

While maintaining its core objectives, the proposal introduces certain improvements, such as the inclusion of bans on claims based on unverified general environmental claims and emission balancing claims. These claims are typically used as the basis for assertions that products are carbon-neutral or have a reduced environmental impact. The proposal also seeks to take stronger measures against early obsolescence, clarify the responsibilities of sellers in certain cases, and introduce a standardized format to make voluntary commercial warranties related to durability more visible.

Under the new rules, unauthorized general environmental claims and claims based on emission balancing plans are prohibited. The rules aim to prohibit claims using terms like “eco-friendly” or “climate-neutral” without scientific evidence and verification. It also aims to ban assertions that a product has a positive or mitigating effect on the environment based on emission balancing, if it doesn’t fall within approved sustainability programs.

This agreement comes following a series of proposals published by the EU Commission in March 2022, aiming to amend existing EU rules concerning consumer protection from misleading or aggressive advertising practices and providing information about products, with a focus on green transition considerations.

According to the proposal, companies will be required to ensure the reliability of voluntary environmental claims independently, with the need for verification and scientific evidence. The EU Commission emphasized that more than half of green claims by companies in the EU are uncertain or misleading, and around 40% are entirely false, according to its recent study.

Under the new agreement, EU rules will ban general environmental claims such as “environmentally friendly” or “climate-neutral,” unless there is verifiable proof of their validity. Claims based on emission balancing will also be prohibited. The rules will also ban the use of sustainability labels that are not based on approved certification schemes.

In conclusion, under the provisional agreement:

The reliability of sustainability labels will be enhanced, with completion of the main elements on which the certification scheme is based.

Organizations will need to increase transparency and monitoring of claims regarding environmental performance.

Unfair commercial practices based on greenhouse gas emission balancing claims will be added to the prohibited list (meaning companies won’t be able to claim, without verification, that a product is neutral, reduced, or improved in terms of environmental impact).

Member states will have a 24-month adaptation period for legal changes.

After the provisional agreement, the new rules are expected to be officially approved and adopted by the EU Council and the EU Parliament.