SPOTLIGHT #4 – Clarifying The Impact of The New EU Directive on Environmental Claims: The End of Greenwashing in The EU?
At Lead up, we are committed to providing our clients with the most innovative dispute resolution solutions to fit their specific industry contexts. To do that, we have to stay on top of the recent developments in our clients’ sectors, and analyse these developments in line with our clients’ needs. Every month, in “Lead up Spotlight”, we share with you – our colleagues, clients and prospective partners – our analysis on a recent development relating to dispute resolution in an industry that matters to us and to our clients.
This month’s Lead up Spotlight focuses on Directive No. 2024/825 of 28 February 2024 as regards empowering consumers for the green transition through better protection against unfair practices and through better information (the “Directive”), published in the Official Journal of the European Union on 6 March 2024. The Directive amends Directive No. 2005/29/EC of 11 May 2005 concerning unfair business-to-consumer commercial practices as well as Directive No. 2011/83/EU of 25 October 2011 concerning consumer rights.
In a context where environmental claims – which highlight the ecological aspects of products and services – abound, the goal of the Directive is to introduce specific rules into EU law to crack down on unfair commercial practices that mislead consumers and prevent them from making sustainable consumption choices. The new text particularly targets practices relating to premature obsolescence of goods, misleading environmental claims (so-called “greenwashing”), misleading information about the social characteristics of products or companies, and non-transparent and non-credible sustainable development labels.
The Directive includes the following main provisions:
1. Definition of the concept of “environmental claim” or “green claim”:
The Directive first inserts new definitions into Article 2 of Directive 2005/29/EC and thus defines for the first time at the European level the notion of “environmental claim” or “green claim.” These notions are now defined as: “any message or representation which is not mandatory (…) in any form, including text, pictorial, graphic or symbolic representation, (…) in the context of commercial communication, and which states or implies that a product, category of products, brand, or trader has a positive or zero impact on the environment or is less damaging to the environment than other products, categories of products, brands or traders, or has improved its impact over time.”
These definitions will help consumer and companies understand precisely what does constitute an environmental claim and what does not. It will provide more legal certainty.
2. Extension of the list of presumed unfair commercial practices:
Next, the Directive amends directive No. 2005/29/EC of 11 May 2005 by adding to the list of prohibited commercial practices several problematic commercial habits relating to greenwashing and premature obsolescence of products. Twelve new deceptive practices, considered unfair in all circumstances, are thus added to Annex I of Directive No. 2005/29/EC, including:
- Generic environmental claims not corresponding to an environmental performance related to the claim;
- Environmental claims covering an entire product or company of the professional, when they concern only one aspect of the product or a specific activity of the company; or
- Claims based on the offsetting of greenhouse gas emissions, stating that a product has a neutral, reduced, or positive impact on the environment in terms of greenhouse gas emissions.
3. Extension of misleading commercial practices:
The Directive further amends Directive No. 2005/29/EC (Article 6) by extending the list of commercial practices considered misleading to two new practices. The following are now prohibited:
- Environmental claims regarding future environmental performance that are not supported by clear, objective, publicly accessible, and verifiable commitments and objectives presented in a detailed and realistic implementation plan.
- Advertisements of consumer benefits that are not relevant and not directly related to a product or company feature.
4. Extension of pre-contractual information:
The Directive amends Directive No. 2011/83/EU of 25 October 2011 concerning consumers rights to be provided with pre-contractual information on sustainability, repairability, and update availability. The information must be provided in a clear and understandable manner, and in accordance with the requirements of Directive No. 2019/882/EU of 17 April 2019 on accessibility.
As per the Directive, Member States must transpose the above provisions into their national law by 27 March 2026, and apply such provisions from 27 September 2026.
Environmental claims under current French law:
Under French law, environmental claims are governed by Articles L.121-1 and following of the French Consumer Code concerning unfair commercial practices, resulting from the transposition of Directive 2005/29/EC of 11 May 2005 concerning unfair business-to-consumer commercial practices.
With the Climate and Resilience Law No. 2021-1104 of 22 August 2021 on tackling climate change and strengthening resilience to its effects, greenwashing, i.e., the abusive use of environmental arguments in professional communications, has been explicitly recognized in France as a misleading commercial practice.
Thus, the said law has added to the misleading commercial practices of Article L.121-2 of the Consumer Code, all false or misleading allegations, indications, or presentations regarding one or more elements such as the essential characteristics of the goods or services, including their environmental impact, or the scope of the advertiser’s environmental commitments.
On 20 March 2023, the French National Consumer Council (“CNC”) adopted a Practical Guide on Environmental Claims that sets out guidelines for the use of environmental claims on which authorities can rely to identify and penalize breaches or violations of current legal provisions, particularly regarding misleading commercial practices.
Any environmental claim must be explicit, unambiguous, and precise so as not to mislead the consumer or sow doubt in its mind. It must aim to inform the consumer in a fair, clear, and proportionate manner about the environmental characteristics of the product or service and must be based on scientific evidence or recognized methods.
Failing to comply may result in professionals being sanctioned by the French General Directorate for Competition, Consumer Affairs and Fraud Control (“DGCRRF”) through its investigative powers, as well as by the judicial courts (for instance, through legal action initiated by competitors).
The transposition of Directive No. 2024/825 of 28 February 2024 into French law will strengthen the provisions taken to combat greenwashing and protect consumers. On the one hand, professionals will enjoy fair competition conditions, while, on the other hand, consumers will be able to choose products that are genuinely better for the environment than competing products. Competition, regulated by the new Directive, will thus promote more environmentally sustainable products, reducing negative impacts on the environment, and more accurate information of consumers.