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Green Claims Directive, Climate and Resilience Law: Everything You Need to Know About Laws Against Greenwashing

Marie Petitalot
Marie Petitalot
Market intelligence analyst
Published on
August 22, 2023
Anti-greenwashing Laws

Since the adoption by the European Commission of the Green Claims Directive proposal in March 2023, there has been a significant reevaluation of fashion brands in their communication. Faced with the risk of being accused of greenwashing, many of them prefer not to communicate about the environmental virtues of their products, a phenomenon now referred to as "greenhushing". This is due to a study by the European Commission in 2020, revealing that 53% of environmental claims are vague, misleading, or unfounded.

In France, environmental communication is already regulated by the Climate and Resilience Law, which establishes a framework for sanctioning greenwashing.

In this article, we summarize everything you need to know about the legal framework for environmental claims, both in France and soon at the European level. We also present the French government's advice to avoid the pitfalls of greenwashing.

Climate and Resilience Law: Overview of the Regulation of Environmental Communication by French Law

New deceptive commercial practices related to greenwashing in France

The Climate and Resilience Law, enacted on August 24, 2021, is the result of the work of the Citizen's Convention for Climate and aims to accelerate ecological transition in all aspects of French life.

To transform our consumption patterns, it includes several measures on consumer information by brands, which you can find summarized in our dedicated article.

These measures not only aim to provide more information to consumers but also to prohibit providing information that may mislead them about the environmental performance of products.

Hence, Article 10 of the Climate and Resilience Law explicitly includes greenwashing among deceptive commercial practices in the consumer code.

In Article L121-2 of the consumer code, which defines deceptive commercial practices, false or misleading claims are now included concerning:

  1. The properties of a product or service, "especially its environmental impact."
  2. The scope of a brand's commitments, "especially in environmental matters."

Note that certain terms, such as "environmentally friendly" or "carbon-neutral," considered particularly vague or misleading, are prohibited by the AGEC law and the Climate and Resilience Law; you can find them in this article.

Greenwashing: What Sanctions are Provided by French Law?

In France, penalties for deceptive environmental claims include imprisonment for 2 years and a fine ranging, depending on the profits, from €300,000 to 10% of the average annual turnover or 80% of the expenses incurred for advertising or practices constituting this offense.

Official Guidelines to Avoid Greenwashing: CNC's Environmental Claims Guide

In late May 2023, the French Ministry of the Economy published a practical guide to environmental claims, drafted by a working group of the National Consumer Council (CNC).

This guide is intended for both consumers, to help them better understand brand environmental communication, and professionals, as a reference tool.

It contains non-binding but authoritative recommendations, designated as a reference document for the DGCCRF in its mission to sanction deceptive commercial practices.

The document has two parts:

  1. A reminder of the legal framework for environmental claims.
  2. Specific recommendations for the use of certain environmental claims (e.g., eco-designed, natural, upcycled).

In the annex, there is a practical sheet for brands to ensure that an environmental claim is fair. We summarize its content here for you.

To communicate the environmental characteristics of a product without engaging in greenwashing, there are three steps to follow, each accompanied by key questions:

Step 1: Relevant content that provides a real advantage considering the significant impacts of the product throughout its life cycle and supply chain. This involves the principle of "proportionality of the claim" compared to the total impacts of the product.

→ Do I know the main environmental impacts of the product? Is the claim relevant to these impacts? Does the claimed advantage not lead to a transfer of pollution to another stage in the life cycle?

Step 2: A clear, precise, and understandable presentation of the claim that leaves no room for ambiguity about its scope and limitations.

→ Does the claim describe the environmental advantage associated clearly and precisely? Are graphical representations (including symbols, images, or labels) relevant to the claim used?

Step 3: The existence and availability of justifications that prove the claim (origin of results, details of the methodology used, evidence).

→ Have the results been obtained by appropriate and recognized standard methods? Are the supporting information for a claim accessible to the public or readily available upon request?

Proposal for the Empowering Consumers for the Green Transition Directive: Greenwashing Integrated into EU Unfair Commercial Practices

As part of a series of measures to make the single market more sustainable, the European Union is also addressing greenwashing. This takes the form of two directive proposals:

  1. Empowering Consumers for the Green Transition
  2. Green Claims

The directive proposal to empower consumers for the green transition was adopted in January 2024 by the European Parliament. It aims, among other things, to include greenwashing in the register of EU unfair commercial practices.

Here is the list of practices that the text proposes to add to the list of unfair practices:

  1. An allegation about future environmental performance not accompanied by clear and verifiable commitments through independent control.
  2. An allegation presented to the consumer as an advantage or distinctive feature when it is actually a common practice or a legal requirement.
  3. In a service that compares products, especially in terms of sustainability, the omission of the comparison method used and measures taken to keep the information up-to-date.
  4. An environmental label not based on a certification system or established by public authorities.
  5. A generic environmental claim without evidence.
  6. An environmental claim that covers the entire product, whereas the advantage only applies to one of the product's features.
  7. Lack of information on planned obsolescence features.
  8. False claims of temporal or physical sustainability or repairability.
  9. Encouraging the replacement of components without technical necessity.
  10. Lack of information on the limitation of a product's performance when the consumer uses spare parts or accessories not provided by the original producer.

In practice, generic claims such as "environmentally friendly", "natural", "biodegradable", "eco" or “climate neutral”, and claims based on carbon offsetting schemes will be banned unless they are provided along with substantive evidence on a lifecycle perspective.

The European Parliament has adopted the text in January 2024, opening a 2-year time period for member states to adopt the new law into their national legislation. The new obligations will consequently entry into force by 2026.

How will companies practicing greenwashing be sanctioned?

Similar to other unfair commercial practices, greenwashing will be subject to a fine of at least 4% of the turnover of the concerned company or 2 million euros in certain cases of major cross-border offenses.

Green Claims Directive Proposal: Specifications for Environmental Communication

Overview of the Green Claims Directive

The proposal for the Green Claims directive was published by the European Commission in March 2023, complementing the "Empowering Consumers" text. Its aim is to clarify the principles of environmental communication and put an end to the proliferation of environmental labels.

The objective is to highlight genuine efforts by businesses and provide consumers with reliable, comparable, and verifiable information to make informed consumption choices.

The key provisions of the Green Claims directive include:

  1. Prohibition of environmental claims that do not meet a minimum set of criteria.
  2. Prohibition of labels that do not meet minimum requirements for transparency and credibility.

Similar to the Empowering Consumers directive, the European Commission emphasizes that non-compliant claims could lead to fines of at least 4% of the company's turnover in the concerned Member States.

In the early stages of the legislative process, the Green Claims directive is not expected to take effect before mid-2024 or even 2025. Despite its demanding nature, it requires significant proactive efforts from brands.

Minimum Criteria for Environmental Claims

Article 3 of the Green Claims directive proposal establishes a multi-criteria approach for environmental claims, based on the entire life cycle, to prevent greenwashing. To justify an environmental claim, brands must apply these eight rules:

  1. Specify if the claim pertains to the entire product or only a part or certain aspects.
  2. Rely on recognized scientific evidence, consider relevant international standards, and use accurate information.
  3. Demonstrate that the claim involves a significant benefit concerning all product impacts and the entire life cycle.
  4. Ensure the claim does not correspond to a legal requirement and prove that it genuinely provides a significant advantage compared to common compliance practices.
  5. Identify potential impact transfers related to the highlighted advantage (e.g., improving the carbon footprint at the expense of pollution or biodiversity).
  6. Do not include greenhouse gas emission offsets in the claim but provide this information separately, specifying the nature of these offsets.
  7. Make primary data (actual company data) supporting the claim accessible.
  8. Include relevant secondary data (representative data of the product or company's value chain).

Article 4 of the proposal includes additional provisions for comparative claims on a product versus other products, ensuring meaningful comparisons (e.g., considering the same life cycle stages, using similar methodologies, and equivalent data).

How to Ensure Green Claims Compliance in Environmental Communication

Article 5 of the Green Claims directive defines a list of requirements concerning environmental claims. In addition to using only justified environmental claims based on the criteria listed in the previous paragraph, brands must adhere to specific rules and provide certain information for the claim to be presented clearly enough for the consumer.

When making an environmental claim about a product with a significant portion of its impacts concentrated during product use, brands must indicate how the consumer should use the product to achieve the expected environmental performance.

If the claim is related to the brand's future performance, it must be accompanied by time-bound commitments regarding its operations and value chain.

The information underlying the environmental claim must be made available, either physically or digitally (QR code, internet link, etc.). The minimum information to be communicated includes:

  1. The environmental aspects or impacts covered by the claim.
  2. Relevant European or international standards related to the claim.
  3. Studies or calculations supporting the claim, specifying their scope and limitations.
  4. A short explanation of how environmental performance is achieved.
  5. The certificate of compliance with the claim's justification and contact information for the third party performing the verification (more details in the paragraph dedicated to verification).
  6. For claims related to greenhouse gas emissions, the extent to which they rely on offsets and the nature of these offsets.
  7. A summary of the brand's assessment of the claim, including the 8 points indicated in the previous paragraph.

The Green Claims Directive and Labels

Articles 7 and 8 of the Green Claims directive focus on environmental labels, with a dual objective:

  1. Ensure they correspond to genuine environmental added value.
  2. Put an end to their proliferation, which causes confusion for consumers.

To ensure that labels (especially private ones) provide real environmental added value, the Green Claims directive proposal requires them to comply with the justification and communication criteria presented in the two previous paragraphs.

Additional transparency criteria for labels are added, including open access to information about the labeling organization's governance, objectives, requirements, and compliance control system. The directive proposal also demands that participation conditions (e.g., labels pricing) be adapted based on the size of businesses to include small structures.

To curb label proliferation, from the directive's entry into force, member countries cannot create new national or local labels. Any new public label must be created at the European level.

Existing public labels will remain valid, except for aggregated score labels, which must all be established at the European level. For the Eco-score being developed in France for food and textile products, this means that harmonization will be necessary upon the directive's entry into force. The European Union will likely draw inspiration from the French methodology to create its score, facilitating this harmonization.

Public labels from non-EU countries must be approved by the European Commission before being used in the Union market.

Private labels must be approved by member states and can only be approved if they provide added environmental value compared to pre-existing labels.

Verification Procedures: How will Green Claims Compliance be Checked?

Article 10 of the Green Claims directive proposal addresses verification procedures that must be implemented by member states to ensure the compliance of environmental claims and labels. Before being presented to the consumer, an environmental claim must be verified by an independent and accredited third-party organization, issuing a certificate of compliance.

Why the PEF Score is not Chosen as the Sole Method for Justifying Environmental Claims

A paragraph in the Green Claims directive proposal is dedicated to the lessons learned from the European Commission's work on the Product Environmental Footprint (PEF) method (a method for measuring the environmental performance of a product based on life cycle analysis).

Although the PEF score could be a useful internal tool for companies to improve their environmental performance, it has at least two limitations mentioned in the text:

  1. It does not cover all significant product impact categories, especially in the case of fashion products, such as the release of microplastics.
  2. It is not relevant for justifying environmental claims about certain product characteristics, such as physical durability, recyclability, repairability, etc.

Conclusion: Knowing your Product and the Impacts of your Production Chain is Now Essential to Substantiate any Environmental Claim

The exact content of the texts against greenwashing that will ultimately be adopted by the European Commission and Parliament at the end of the legislative process is not yet known. However, a certainty emerges from these directive proposals: to communicate effectively, brands must indispensably substantiate their claims with information covering the entire life cycle of the products in question.

It is, therefore, essential for them to implement mechanisms enabling the collection of data related to the environmental performance of their entire production chain. Operational traceability processes are thus a prerequisite for any communication.

Compliance
CSR
European law
French law
Transparency