Greenwashing and consumer protection: new European and Belgian rules ahead

In an era where environmental consciousness is at the forefront of global concerns, consumers are increasingly looking for products and services that align with their values of sustainability and eco-friendliness. Unfortunately, this surge in demand for green products has led to a practice whereby companies portray their products or services as environmentally friendly when, in reality, they may not be. Some of these practices have already made headlines, such as the “dieselgate” scandal. 

In order to safeguard consumers’ interests, both European and Belgian legislators have taken steps to combat deceptive eco-friendly offerings and empower consumers to make informed choices. In this e-zine, we first analyse the two main initiatives at EU level on green claims and consumer empowerment, one of which was recently adopted. In addition, we discuss the pending Belgian legislative proposal introducing additional measures to protect consumers. 

A Proposal and a Directive 

Against the background of the European Green Deal, the European Commission adopted a new proposal for a Directive on substantiation and communication of explicit environmental claims on 22 March 2023 (hereafter: Green Claims Directive Proposal). 

Consumers are often faced with companies making unclear or ill-substantiated environmental claims about their products’ environmental characteristics (also known as “greenwashing”). In addition, they are faced with ever more sustainability labels that are not always transparent and credible. The practice of greenwashing and the proliferation and lack of verification of green labels currently lead to consumer confusion, lack of trust and an uneven level playing field between companies.

Once adopted, the Green Claims Directive Proposal will complement the recently enacted Directive no. 2024/825 of 28 February 2024 on empowering consumers for the green transition through better protection against unfair commercial practices and better information (hereafter: Consumer Empowerment Directive). 

This Consumer Empowerment Directive already introduced a ban on greenwashing practices through an amendment of the Unfair Commercial Practices Directive. For example, making an environmental claim related to future environmental performance without clear, objective and verifiable commitments and targets or an independent monitoring system constitutes a misleading commercial practice under certain conditions. Furthermore, making generic, vague environmental claims (such as “eco-friendly”) is as such prohibited whenever the trader is unable to demonstrate recognized excellent environmental performance. The same counts for making an environmental claim about an entire product or a company’s entire business, when it actually concerns only a certain aspect of the product or a specific, unrepresentative activity of the company’s business. The same goes for the making of claims, based on the offsetting of greenhouse gas emissions rather than the actual lifecycle impact of the product in question, that a product has a neutral, reduced, or positive impact on the environment in terms of greenhouse gas emissions (such as “climate neutral").

What is new in the Green Claims Directive Proposal? 

Unlike the Consumer Empowerment Directive which does not specify what companies should do to properly substantiate their environmental claims, the Green Claims Directive Proposal does introduce specific minimum norms as to their substantiation, communication and verification in order to tackle false green claims and untrustworthy sustainability labels. In particular, the Proposal provides for:

• common criteria on how companies should substantiate and communicate green claims;
• a sound system of independent verification;
• clear requirements for environmental labels; and
• adequate enforcement mechanisms.  

The Green Claims Directive Proposal targets “explicit environmental claims”, i.e. environmental claims that are in textual form or contained in an environmental label, which are made by traders in order to market their products to EU consumers. 

Hence, the Green Claims Directive Proposal would apply to voluntary B2C claims such as “T-shirt made of recycled plastic bottles” or “ocean-friendly sunscreen”.

How does the Green Claims Directive Proposal work?  

First, traders will have to substantiate their explicit environmental claims with scientific evidence before communicating them to consumers. 

Besides other communication demands, explicit environmental claims may only cover the environmental impacts, aspects or performance assessed in accordance with the substantiation requirements. Information on the substantiation of the explicit environmental claim should furthermore be communicated, together with the product or trader information and the claim itself, in a physical form or in the form of a weblink, QR code or equivalent.  

Additional requirements would apply to “comparative environmental claims”, i.e. claims that state or imply that a product or a trader has less environmental impacts or a better environmental performance than other products or traders. Comparisons of products or traders concerning environmental impacts, aspects or performance should for instance be based on equivalent data.

Second, the Proposal requires the substantiation and communication of environmental claims and labels to be verified by an independent third party before any such claim is to be used in a commercial communication to consumers. Upon completion of the verification, a certificate of conformity shall be drawn up certifying that the explicit environmental claim complies with the requirements of the Green Claims Directive Proposal. 

Microenterprises (with fewer than 10 employees and an annual turnover not exceeding 2 million EUR) would be exempt from the requirements on substantiation and communication of their environmental claims, unless they wish to obtain a certificate of conformity. Besides, Member States should take appropriate measures to help SMEs fulfil the requirements of the Green Claims Directive Proposal. 

Third, in addition to the abovementioned requirements which apply to all kinds of claims, the Proposal provides for specific rules to counter the proliferation and credibility challenges of environmental labels. For example, no new public labelling schemes shall be allowed unless established under EU law, and new private labelling schemes shall be subject to pre-approval (by national authorities or by the European Commission). 

Finally, the Green Claims Directive Proposal also ensures both public and private enforcement of its obligations. 

On the one hand, designated competent authorities shall e.g. have the power to: 

• require third parties to provide any relevant data for purposes of establishing an infringement;
• start investigations or proceedings on their own initiative to bring about the cessation or prohibition of infringements;
• require traders to adopt adequate and effective remedies and take appropriate action to bring an infringement to an end; or 
• impose injunctive relief or penalties, such as temporary exclusion from procurement processes, confiscation of revenues or fines of at least 4% of the trader’s annual turnover. 

On the other hand, any natural or legal person or organization regarded under Union or national law as having a legitimate interest shall be entitled to submit a complaint to the competent authority concerning an alleged infringement and shall have access to administrative and/or judicial review.  

Such complaints may lead to injunctive actions, including the immediate stop of the communication of non-compliant environmental claims. Interestingly, the Proposal also seeks to bring the Green Claims Directive into the scope of the recent Directive (EU) 2020/1828 on representative actions so as to ensure that the collective interests of consumers are protected. [1]

Next Steps 

By 27 March 2026, Member States are required to adopt the rules of the Consumer Empowerment Directive into their national law. The rules should effectively apply as from 27 September 2026.

The Green Claims Directive Proposal is still subject to debate and approval by both the European Parliament and the Council. The European Parliament adopted its first reading position on 12 March 2024 by which it already proposed certain amendments to strengthen the Proposal, such as:

• the criteria and methods for substantiation and communication of environmental claims should be expanded;
• environmental claims and labelling schemes should be approved by independent verifiers within 30 days; 
• a simplified verification system should be put in place for certain environmental claims (e.g. common claims or claims which do not require a full life-cycle analysis) including, where appropriate, a presumption of conformity of verification;
• environmental claims that are based on greenhouse gas emissions offsetting schemes should be prohibited in accordance with the Consumer Empowerment Directive; and
• micro-enterprises should remain exempted from the obligations while SMEs should be given an extra year to be in compliance. 

The European Parliament will follow-up on the Proposal after the European elections of June 2024. The Council still has to adopt its position as well, after which negotiations can take place. According to the current Proposal, Member States should adopt the necessary measures within 18 months after the entry into force of the Directive and apply them as from 24 months after the entry into force.

In any case, the Green Claims Directive Proposal – as a lex specialis to the Consumer Empowerment Directive – is set to ensure that consumers receive environmental information that is reliable, comparable and verifiable so as to allow them to make well-informed purchase decisions and effectively contribute to the green transition. The Proposal will also help establishing a level playing field between businesses as regards information about environmental performance or products: those that make a genuine effort to improve environmental sustainability of their products will be more easily recognised and rewarded by consumers. 

Apart from the initiatives prepared at European level, Member States may as well take individual action against greenwashing.

On 27 November 2023, a legislative proposal was submitted to the Belgian House of Representatives, seeking to amend the Code of Economic Law with a view to combatting greenwashing.

The proposal essentially aims to introduce three measures which can be used as additional levers to prevent greenwashing (apart from the European discussions on the matter):

• Greenwashing would be defined as any non-mandatory message or statement by which, in commercial communications, it is falsely claimed or suggested that a product or service either has a positive or no environmental or climate impact, is less harmful to the environment or climate than other products or services, or has improved its environmental or climate impact over time;
• Greenwashing would automatically be considered a misleading commercial practice: consumers would not bear the burden to prove that a greenwashing practice is unfair, making it easier to impose sanctions;
• Sanctions would become stricter: for this particular misleading commercial practice, a penalty of up to 400.000 EUR or 6 % of the annual turnover is suggested; and
• Claims that explicitly refer to carbon neutrality or any other similar wording, would have to be properly substantiated by providing information on the carbon emission level as well as the steps and goals put forward to prevent, reduce or compensate such emission in accordance with applicable conformity criteria. 

The legislative proposal is currently pending before the House of Representatives and it is unsure if and when the proposal will be adopted. 

The Consumer Empowerment Directive constitutes a major step in the fight against greenwashing through its ban on unsubstantiated environmental claims. However, companies should be further guided as to how to actually substantiate and verify such claims, as well as how to make their environmental labels trustworthy. The adoption of the Green Claims Directive Proposal will be essential to the introduction of such obligations and of effective enforcement measures. However, the strength of these legislative initiatives will of course depend on their implementation and enforcement at national level.  

Furthermore, it remains to be seen if the Belgian legislator will indeed impose additional measures in parallel with the European initiatives.