By Daniel Silva (Master’s student in EU Law, UMinho)
The fight against greenwashing in the EU
In January of 2021, the European Commission and national consumer authorities shared their conclusions pursuant to a screening of websites performed to identify breaches of EU consumer law in online markets focused on greenwashing practices. This screening included a variety of online green claims from a wide range of business sectors, including cosmetics, clothing, and household equipment. The results estimated that 42% of analyzed claims were exaggerated, false or deceptive and could even potentially be considered unfair commercial practices under EU law. The sweep also concluded that the practice of greenwashing has been growing as consumers demand in green products also grows.
The term greenwashing was coined by the American environmentalist Jay Westerveld in 1986, at the time regarding the practice of the hotel industry incentivizing the reuse of towels for environmental reasons, when in fact it was a ploy meant to increase their margin of profit. The EU defines greenwashing as “companies giving a false impression of their environmental impact or benefits”. This, however, does not seem to encompass the magnitude and many facets that greenwashing has. There is not a unanimous agreement on a precise definition of the term, however, most definitions agree on two aspects about greenwashing: there is repression on information that suggests the company might be environmentally unfriendly and a strong push on having an environmentally friendly image. Hence, we can see greenwashing as a phenomenon of selective information disclosure on the environmental impact of a certain product or service that does not necessarily correspond to reality or is even false. We can look at greenwashing as somewhat of a marketing strategy, capitalizing on the growing consumer environmental conscience that has been on the rise in recent years. Therefore, the companies that practice greenwashing do not actually have any real environmental concern, focusing purely on economic gain.
Greenwashing can be categorized into many types. In its more debatable type, it can appear as association to environmental imagery. This happens when a product uses elements related to nature, like leaves, animals, or the color green, creating in the costumer’s mind an association of the product to positive environmental aspects.
However, most commonly, greenwashing appears in the form of unproven or vague claims, usually trough misleading labels, most times self-created and self-declared, with no third party verifying the claim. For example, a company can create a big emphasis on their product being produced out of recycled material, but then not actually verify or give any proof of this. The mention of irrelevant information can also be considered a form of greenwashing since companies also try to wrongly transmit an image of environmental concern. This happens when spray products mention being CFC free, when this is already required by law.
Greenwashing creates a double issue on the market. On one hand, it tricks the consumer, having them wrongly believe the product they are acquiring is sustainable. On the other, since going green might imply a rise in production cost, greenwashed products compete unfairly in the market with truly green products.
The EU has worked in putting several plans in motion that aim to end greenwashing. The Circular Economy Plan is one of them. Presented in March of 2020, the plan sets out a framework of actions that aim to shift the EU economy into a “regenerative growth model”. It consists of one of the many initiatives within the holistic approach set by the EU to achieve climate neutrality by 2050. The Action Plan includes some actions that would help fight greenwashing, namely by strengthening the role of consumers in the green transition. There is currently an initiative for a directive being discussed that would aim to make sure that consumers have reliable and useful information on products, prevent overstated environmental information and the sale of products with a covertly shortened lifespan, and set minimum requirements for sustainability logos and labels. Another important legislative initiative currently in the works would impose companies to substantiate their environmental claims using EU Product and Organization Environmental Footprint methods. These methods measure the environmental performance of a certain product or organization throughout their entire life cycle, from extraction of raw materials to generated waste. The product or service is then judged using 16 environmental impact categories. It is important to note that currently there are not any detailed positive rules on the substantiation of environmental claims in the EU, which is a problem that this regulation would tackle. Additionally, this would mean that every environmental claim in the EU would be credible, mitigating the confusion generated by the up to 200 environmental labels that are currently active in the EU, which would increase the trust consumers deposit on products that claim to be environmentally friendly.
The Farm to Fork strategy, which, in a few words, hopes to make available to all Europeans high-quality and nutritive food at accessible prices, produced within substantiable limits of the planet, also hopes to take action against greenwashing. Here the aim is the labelling of food, which will have information on its sustainability, and also the energy efficiency of various household appliances, with rules that enforce that clear and simple information is provided to help customers make informed choices that will reduce greenhouse gas emissions across the EU.
Announced in November of 2020, the New Consumer Agenda has the ambition of empowering European consumers, allowing them to play an active role in the green and digital transition. This new agenda complements other EU initiatives, including the European Green Deal and the Circular Economy Action Plan. Protecting consumers against greenwashing is one of the many actions projected by the new agenda, which hopes to not only make sure that consumers have access to sustainable products but are also able to identify them.
As more and more Europeans show willingness to live a green life, it is essential for the EU to protect consumers from unethical traders that prey on their good faith. The fight against greenwashing is fundamental for the EU to achieve the current bold, but necessary, environmental goals adopted.
Pictures credits: ulleo.