Has the end come for false ecological product labeling?

Generic ecological claims such as green, environmentally friendly, biodegradable, low-carbon, and ecological labels without certification or confirmation from national public bodies are becoming a thing of the past. In recent years, we have witnessed an expansive increase in false ecological labels on products and services that companies use to avoid losing existing environmentally conscious customers, attract new customers, generate additional revenue, and enhance their competitive advantage in the market.

The European Commission, together with other consumer protection bodies, is conducting analyses to capture the real situation in the market. A detailed analysis of 344 seemingly ambiguous ecological claims about products found that in more than half of the cases, business entities do not provide sufficient information for consumers to assess the accuracy of the claims made.

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In 37 percent of cases, the claims contain vague and general statements such as environmentally friendly, sustainable, low-carbon etc., which give consumers a false impression that the product has no negative impact on the environment. In almost 60 percent of cases, business entities fail to provide easily accessible evidence to support the claim made. The data presented is proof of the unreliability of ecological claims that surround us and for which consumers have increasingly less trust, as they are constantly misled about the sustainability and ecological acceptability of products and services. Currently, there are over 100 different green energy labels and over 230 sustainability labels in the European market, with very different levels of transparency that complicate consumers’ understanding of the ecological efficiency of products and services.

To put an end to greenwashing and regulate the use of green claims or claims about the ecological sustainability of products and services, the European Union is introducing Green Claims Directive (GCD). This directive aims to protect consumers from being misled or deceived by false or unverified claims about the ecological properties of products or services. The main elements of the Directive include;

• Definitions and general rules: The Directive defines terminology and sets general rules for the use of ecological claims to ensure clarity and consistency.
• Prohibited practices: The Directive identifies certain practices that are prohibited, such as false advertising of the ecological properties of products or services.
• Common framework criteria: In accordance with the directive, the European Commission may establish common framework criteria for the use of specific types of ecological claims to ensure their consistent and relevant use.
• Competent authorities and procedures: The Directive prescribes competent authorities and procedures for the implementation and monitoring of compliance with regulations on ecological claims.

The goal of the Directive is to promote transparency and consumer trust in the market and ensure consistent application of standards and rules for labeling ecological products and services across the European Union. The Directive seeks to promote sustainable products and services, facilitate a circular and clean economy, and encourage broader goals of the European Green Deal by combating greenwashing.

Since the European Parliament and Council officially approved the final text of the Directive at the beginning of the year, the Directive will soon be published in the Official Journal of the EU. The new rules will apply from the end of 2026 to companies in all sectors selling products or services in the European Union. Eliminating unfair market practices will provide equal rules for all companies offering truly sustainable and green products or services.

Learn more about this directive, ESG reporting, and everything it brings for domestic entrepreneurs at the ninth Lider conference ESG – Sustainable Future, which will be held on May 23 at the Sheraton in Zagreb. The number of participants is limited, so secure your place by registering in advance.