The EU’s new greenwashing rules, explained.

The European Union has stepped up its action against greenwashing. Business groups and environmentalists say it’s not going far enough.

On Wednesday, the European Commission published a draft of new rules aimed at eliminating soft and misleading eco-marketing, including clothing and cosmetics.

The proposed regulation is aimed at the growing number of “green” products whose environmental credentials are often empty. It sets threshold requirements for brands to back up any claim with strong, verifiable data or face hefty fines.

The long-awaited draft laws come amid a spate of greenwashing, which is already pushing terms like “green” and “conscious” out of fashion in how brand-name products are marketed.

This week’s United Nations last-chance warning on climate action and the trade-offs and regulatory risks associated with sustainability are a topic of high concern.

But the EU’s proposed rules don’t address all the thorny issues, leaving the technical details of how brands can back up their claims remain unclear. That leaves the market with heightened legal risk, but without uniform, strong and comparable standards, frustrating both business groups and environmental advocates.

George Harding-Rolls, campaign manager for environmental campaign group the Changing Market Foundation, said: “It certainly risks getting things too confusing. “We see ‘green silence’. We’ll see more fashion brands and companies across sectors take a little time to digest this, and in that space perhaps make far less green claims.

The new rules of ‘green’ marketing

A key requirement in the EU’s proposed legislation is to support any environmental protection claims with high-quality, scientific evidence verified by a third party.

Currently, more than 50 percent of claims in the EU are unclear, confusing or unfounded, according to a 2020 study by the Commission. According to the draft regulation, the market is flooded with more than 200 eco-labels, many of which are unverified and misleading.

Under the proposed rules, any environmental claim must consider a product’s entire life cycle and cover all relevant environmental impacts, rather than selecting one issue and ignoring others. “Self-verified” location accounts that do not have third-party verification or regular monitoring will be banned.

Companies should be transparent about any commercial offers related to their eco claims. For example, the draft rules highlight the ambiguity surrounding clothing made from recycled polyester, as these are often made from non-recyclable plastic bottles.

The proposed rule specifically takes aim at potentially misleading “carbon neutral” and “climate neutral” claims. Any climate-related claims should demonstrate how much brands rely on discounts rather than reducing their footprint. And when offsets are used, there should be clear and convincing evidence of their impact, the draft says.

Penalties for greenwashing are not fully specified, but the draft says it could reach at least 4 percent of annual revenue in countries where brands are found to be using misleading marketing.

“The first line is drawn in the sand,” said Dalena White, secretary-general and spokeswoman for the lobby group International Wool Textiles. “It’s not just a free game. [a sustainability claim] And that’s our marketing for next season.

From Green Washing to ‘Green Hushing’

Although the new regulation is intended to take ambiguity out of sustainability marketing, some industry watchers poring over the 80-page document this week said it still lacks clarity.

Over the past year, brands navigating a changing regulatory landscape have been looking to the EU to come up with common, agreed requirements on how to back up green claims. Instead, the high-level guidelines will leave the field open for companies to pick and choose the methods they want, and the rules will vary from market to market, industry watchers said.

“This is a bare minimum that leaves a lot of legislation open to interpretation and provides no legal certainty,” said Baptiste Carriere-Pradal, founder and policy director of public affairs consultancy 2B and chair of the fashion industry advocacy group Policy Hub. “It has completely failed to provide the transparency that people want.”

Regulatory uncertainty is leading some companies to stop talking about their environmental efforts. Environmentalists say this isn’t necessarily a problem, but industry representatives argue that if companies can’t communicate climate action to consumers, they have no incentive to invest.

There is still room for refinement. The draft laws must pass through the European Parliament and could take years before they become law. In the meantime, they send a direct signal that greenwashing is out of style.

“If there’s one thing that’s clear from this,” Harding-Rolls said, “the more evidence you can provide, the more primary data and the more brands of information you can provide, the better.” “And if you don’t do that, you’re probably greenwashing.”