THE TRANSPOSITION PERIOD FOR MEMBER STATES BEGINS
On 30 March 2023, the proposal for a Directive amending the Unfair Commercial Practices Directive and the Consumer Rights Directive to empower consumers for the green transition through better protection against unfair commercial practices and better information (the “Greenwashing Directive”) was published. The Directive[1] has been formally signed on 28 February 2024 by the Presidents of the EU Parliament and of the Council, and has been published on 6 March 2024 in the Official Journal of the EU Parliament. The Directive aims at providing consumers with additional information regarding the environmental impact of specific products, and protecting them against deceptive commercial practices concerning the sustainability aspects of said products. The countdown has now begun: as from its entry into force on 26 March 2024, the EU Member states have to transpose the measures contained in the Directive into their national laws within 24 months (i.e. by 27 March 2026), and apply the provisions as from 27 September 2026.
The adoption of this Directive is a strong marker for the EU’s initiatives set out in the framework of the Green Deal, in particular in the Commission’s 2020 New Consumer Agenda and 2020 Circular Economy Action Plan. In fact, it demonstrates the EU’s determination to address greenwashing by setting up a new framework for consumer protection. The Directive cracks down on commercial information that falls within the scope of “greenwashing”, defined in the Directive as “misleading environmental claims”, and misleading product information, to allow consumers to make informed purchasing decisions and to shift towards more responsible consumption habits.
The Greenwashing Directive goes hand in hand with the Proposal for a Directive on substantiation and communication of explicit environmental claims (the “Green Claims Directive”), which is still in the process of being adopted and requires companies to substantiate their green claims in business-to-consumer commercial practices by adhering to specific criteria in their assessments. In contrast to the Greenwashing Directive, under the Green Claims Directive Member states would need to appoint verifiers to preliminarily approve the usage of such claims, to protect consumers from unfounded and ambiguous advertising. The convergence of these two texts will undoubtedly serve as a pivotal factor in tackling the current challenges associated with green claims.
The main contribution of the Greenwashing Directive is to expand the existing Consumer Rights Directive’s pre-contractual information requirements. Professionals will now be obliged to provide consumers with pre-contractual information on the durability and reparability of products. In addition, the Greenwashing Directive amends the Unfair Commercial Practices Directive to prevent traders from deceiving consumers as regards the environmental or social impact, durability or reparability of their products. The Directive now considers misleading claims relating to future environmental performance which the trader does not associate with clear, objective and verifiable commitments and targets. This new legislation will therefore significantly impact the way companies market their products, with a number of additional formalities to consider when putting a product on the market or launching a marketing campaign. Once transposed by Member States, it can be expected that more attention will be given by national authorities to the communications surrounding the sustainability of products and the merits of traders’ claims in this respect.
At present, it is however still difficult for traders and suppliers to fully understand the obligations introduced by the Greenwashing Directive due to its intricate language. The ambiguity of certain clauses makes it arduous to translate requirements into practical steps. For example the Directive mentions the necessity for traders to disclose “the producer’s commercial guarantee of durability” to consumers for all types of goods, where such information is provided by the producer. However, the term “commercial guarantee of durability” lacks clarity, leaving traders uncertain about its precise meaning and application. Moreover, the introduction of the concept of “reparability score” adds another layer of complexity. Despite its mention in the text, a standardized reparability score is not yet available within the EU, making it difficult to anticipate the specific requirements associated with it. Consequently, the ambiguity surrounding these concepts makes it difficult to anticipate what precisely will be expected in order to comply with the Greenwashing Directive’s provisions. Another significant challenge lies in ensuring the practical adherence to these new rules, particularly considering the absence of prior verification of communications and labeling. In such circumstances, it will be up to the national authorities to take action in case of non-compliance.
It remains now to be seen how the Greenwashing Directive will be implemented in national legislations in the next 24 months. Companies should closely monitor this process, as the implementation of these new rules will significantly influence the way they can communicate around the sustainability characteristics of their products and services.
For more information on this subject, do not hesitate to contact one of the members of the ESG Advisory Team of Liedekerke via [email protected].
[1] Directive (EU) 2024/825 of the European Parliament and of the Council of 28 February 2024 amending Directives 2005/29/EC and 2011/83/EU as regards empowering consumers for the green transition through better protection against unfair practices and through better information.
