- Business - EU law to crack down on greenwashing

By Megan Hickling

EU law to crack down on greenwashing

A new EU law will impose a ban on unsubstantiated green marketing and unsupported carbon offsetting claims…

Earlier this month, the EU banned environmental claims on products or services without sufficient proof and instituted a total ban on claims based on offsetting. This continues efforts to mitigate and reduce corporate greenwashing, as seen previously in the legal case against KLM’s misleading “fly responsibly” campaign.

This should serve to reduce false claims and increase trust in the integrity of the remaining initiatives. Providing trustworthy information is important, especially given that, according to a recent study, over half of EU consumers are considering sustainability in their purchasing decisions.

The Green Claims Directive (GCD) bans unsubstantiated claims, such as “climate neutral”, used on labels for goods and services, which are often markers of greenwashing. The directive works in tandem with other EU efforts to improve the sustainability of products and services and their messaging to consumers.

A recent EU commission study found that more than half of all green claims are vague, misleading, or unfounded, alongside almost half of the ecolabels in the EU having weak or low verification processes. Claims such as “biodegradable” or “environmentally friendly” must now be backed through approved certification schemes based on the evidence provided. EU countries will have two years to implement this legislation.

This should drive several positive changes within the EU market. There will be a reduction in false labels, along with an increasing familiarity with authentic verification certificates and claims as they become more commonplace. Hopefully, there will be more transparency on the sustainability credentials of products and services for consumers, and this will lead to better consumer understanding of these aspects and potentially higher consumer expectations of the environmental performance of their purchases.

The total ban on claims based on offsetting echoes the concerns of others about the use of offsetting in bad faith. This, hopefully, will mean businesses will move away from relying on offsetting for improving environmental performance and instead towards more effective change that reduces the impact rather than just mitigating emissions/impacts once they’ve been caused. However, offsetting used in good faith can still be used for the business to otherwise contribute to positive changes.

These claims are also present in the superyacht and maritime industry. Walk around any trade show, and you’ll see numerous ambiguous green terminologies used. While there is likely some truth in these features, the approved certificates will give more certainty on sustainability-related aspects.

This new legislation is another pressure on businesses to be transparent and attain tangible sustainability information and metrics. Further demonstrating the need for suitable measuring and monitoring of environmentally improved characteristics.

Within the superyacht industry, this should mean using verified means such as Water Revolution Foundation’s database of sustainable solutions for products, or even YETI or SEA index scores for the yachts themselves. Hopefully, this continued trend of legislation will mean clearer information is available and lead to further understanding of this topic throughout the superyacht sector. 

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EU Law to crack down on Greenwashing


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