EU Parliament votes to clamp down on carbon neutral claims backed by offsetting

Brands within the EU looking to label their products as ‘carbon neutral’ will face new regulatory barriers following a European Parliament vote in favour of new anti-greenwashing rules. 

The European Parliament has voted to support a ban on sustainability claims that primarily focus on carbon offsetting schemes. Also known as the ‘Directive on Green Claims’, it will prohibit organisations from utilising generic labels like ‘carbon neutral’ or ‘environmentally friendly’ without offering detailed evidence.This development highlights the importance of corporate sustainability training to ensure compliance with evolving environmental regulations.

What inspired the EU Parliament to take this action?

The proposed rules were initially introduced in March following a greenwashing study. This study uncovered that over half of the sustainability claims by EU companies were misleading. Due to this, the rules were created to combat greenwashing and increase transparency so that consumers can feel confident they are making more environmentally conscious purchasing decisions. 

The rules will also aim to encourage businesses to provide customers with higher-quality and sustainable products. One member of the EU Parliament attested that the sea of false sustainability claims will end as only substantiated and certified environmental claims will be allowed.

The proposal strives to strengthen the fight against greenwashing. It will do this by prohibiting practices that mislead customers about the genuine sustainability of products. This means customers will be able to select products that are truly better for the planet. It is hoped this will drive competition towards more environmentally sound products.

What do the rules mean for businesses?

The new rules created by the EU Parliament set out minimum requirements for businesses to communicate, verify, and substantiate their sustainability claims. To make sure that the reliability of environmental claims, all claims have to be supported and independently verified by science-based and quantified targets.

The claims must also consist of a realistic and detailed implementation plan to meet this future sustainability performance, supported by a budget, resource allocation, and targets. The rules will prohibit the use of other misleading practices like making sustainable claims about the entire product when just one element is eco-friendly. 

The EU Parliament also voted against the practice of early obsolescence. They did this by clamping down on the introduction of design features that limit a product’s life or result in goods malfunctioning prematurely. Additionally, producers will not be permitted to restrict a product’s functionality when utilised with spare accessories or parts created by other businesses. 

Summary – what will happen next?

The lawmakers within the European Parliament passed the proposal with a whopping 544 votes in favour. There were just 18 votes against the proposal in addition to 19 abstentions, revealing that the EU Parliament  recognises the negative impacts of greenwashing.

With this in mind, negotiations between the EU member states and the EU Parliament will soon start to decide on the final wording and content of the directive. The proposed rules have already received some criticism. The criticism comes from the Environmental Coalition on Standards who claim the rules have been significantly watered down. However, it will be interesting to see the determined wording and content of the directive.