Demystifying the Green Claims Directive: Expert Insights for Businesses

Let's face it, the marketplace is a jungle of green claims, some legit, others... not so much. With studies revealing a hefty chunk of these claims are misleading or unfounded, it's no surprise the EU decided to step in the Green Claims Directive.  

A European Commission study from 2020 found that 53.3% of the environmental claims they examined were vague, misleading, or unfounded, and 40% were completely unsubstantiated. Consumer trust in environmental claims is extremely low. 

The goal of the directive? To ensure when a product says it's green, it truly is, helping consumers make informed decisions and businesses shine in their genuine eco-efforts. According to the EU, this will also boost the competitiveness of businesses that are striving to increase the environmental sustainability of their products and activities. 

Making Sense of the Green Claims Directive 

The Green Claims Directive has been all over my LinkedIn feed in the last few weeks. Whether you’ve heard of it, or not. Let’s get to the bottom of what it entails. In a nutshell, this upcoming legislation is the EU's answer to greenwashing, aiming to make environmental claims on products and services as transparent and trustworthy as possible. Erik Roos Lindgreen, a sage in the sustainability realm, offers his two cents on the matter, breaking down the directive in a way that's digestible for all of us—especially those of us without a PhD in sustainability or communications. Here's what you need to know about the Green Claims Directive, its importance in combating greenwashing, and practical steps businesses can take to align with its standards. 

Breaking It Down: What the Directive Entails 

At its core, the directive mandates companies to back up their green claims with solid evidence,  using scientific knowledge and a life-cycle perspective (more on that later). It's about adding credibility to claims and giving them a solid foundation. Think of it as the directive putting up guardrails, guiding businesses on how to communicate their sustainability achievements without falling into the greenwashing pitfall. The directive isn't just about penalizing misleading claims; it's also about guiding companies with genuine sustainability efforts on how to communicate their initiatives effectively. 

Navigating challenges  

Businesses are imposed with the big task of correctly assessing, presenting and hopefully improving their environmental performance. While the directive recommends a life-cycle approach for impact assessment, indirectly referring to methods such as LCA, no specific guidance on how such methods should be applied is provided, and no concrete guidance on how to communicate their results are given. This is still a complicated and context-specific task, which will be the responsibility of businesses themselves. Another challenge is that social impacts are currently not part of the Green Claims Directive; however, they are covered by the Directive on Empowering Consumers for the Green Transition (ECGT). Companies will need to invest time and resources into understanding and applying relevant methods. 

Opportunities Knocking at Your Door 

Sure, the directive poses challenges, especially for companies just dipping their toes into sustainability waters. Yet, it's packed with opportunities. For one, it paves the way for more reliable and comparable green claims across the board, boosting consumer trust and, ultimately, loyalty. Plus, it encourages businesses to take a closer look at their environmental impact, potentially uncovering ways to improve and innovate. 

Getting Your Business Directive Ready 

So, what's the game plan for businesses, especially with the directive's implementation on the horizon?  

1. 1. Start by getting a bird's-eye view of your environmental and social sustainability performance.  

1. 2. Identify hotspots for improvement 

1. 3. Embrace life-cycle assessment methods 

1. 4. Refine how you communicate your sustainability journey.  

It's not just about avoiding penalties; it's about seizing the opportunity to lead in sustainability and build a brand that resonates with today's eco-conscious consumers. 

Life Cycle Assessments Explained 

A life cycle assessment (LCA) is a systematic analysis of the environmental impacts of a product or service throughout its entire life cycle, from raw material extraction to disposal. Erik emphasizes the importance of LCAs in identifying impact hotspots and informing strategic decisions to reduce environmental footprints. By understanding where the most significant impacts occur, businesses can make targeted improvements, enhancing both their sustainability performance and their credibility. 

Erik argues that the application of the rules that have been put forward in the Directive offers a range of co-benefits and opportunities for businesses – both those that have already started to embed sustainability as a core part of their strategy and those that are planning to do so.  

A few key takeaways from the directive

When claiming the environmental sustainability of a product, service, or company, businesses should:  

• 🟢 Specify if the claim concerns the whole product or part of it, or if the claim concerns all activities of a company or only some of them; 
• 🟢 Base the claim on widely recognized scientific evidence, using accurate information and international standards; 
• 🟢 Take a life-cycle perspective in assessing the impact; 
• 🟢 Take all the significant environmental aspects and impacts into account to assess the environmental performance; 
• 🟢 Have any claims and labels to be checked by an independent and accredited verifier. 

The directive has yet to be adopted, so changes could still take place.

A Few Parting Words from Erik 

Erik wraps up with some golden nuggets: Specify, substantiate, and be transparent about your claims. And remember, the directive isn't just about avoiding the no-nos. It's about embracing a more informed, evidence-based approach to sustainability. The directive is your ally, guiding you toward clearer, more credible green communications. 

• 1. Go beyond just thinking about communication of your impact; but start thinking about the impact itself; 
• 2. Start with taking a bird's eye view of your environmental and social sustainability performance;
• 3. From these, ask where the hotspots are;  
• 4. Find ways to inventory your materials and energy use;  
• 5. Start applying conventional methods such as LCA;  
• 6. Think about your message: how do you convince your customers that you are continuously improving? 
• 7. Not only hire consultants for this but assure that knowledge transfer takes place.  

Erik is a Dazzle freelancer. That means he’s been through our vetting process, and is part of our exclusive community of top-tier sustainability professionals. His main professional interest is how businesses can provide evidence for their impacts. 

In the past eight years, Erik has worked with various methods that allow companies to assess their impacts, such as LCA, full-cost accounting, circular economy metrics, and social impact indicators.  

Conclusion: Your Next Steps 

As we gear up for the Green Claims Directive, it's clear the journey toward sustainability isn't just a nice-to-have; it's a must-do. For sustainability managers, marketing teams, and strategic decision-makers, now's the time to dive deep into your company's sustainability practices, ensuring they're not just compliant but leading the charge toward a greener future. Let's make those green claims not just seen but believed. 

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