EU legislators have passed a new directive outlawing generic environmental claims and other misleading information. Only sustainability labels based on approved certification schemes or established by public authorities will be allowed.  The new rules also aim to tackle the early obsolescence of products by banning practices including unfounded durability claims, presenting software updates as necessary when they only enhance functionality, presenting goods as repairable when they are not, and inducing consumers to replace consumables earlier than necessary for technical reasons.   

The rules will make product labelling and advertising clearer by banning the use of certain generalised environmental claims, such as “environmentally friendly”, “biodegradable”, or “eco” without proof, and regulate labelling through official certification schemes. The legislation will also ban claims that a product has a neutral, reduced, or positive impact on the environment where this is based on emissions offsetting.  This is due to widespread concern about the credibility of some carbon offsetting schemes.  Additionally, the Directive will put an end to claims that conflate progress made on one topic or about one product with the company’s overall environmental footprint. 

Campaign groups have welcomed the new rules as a necessary tool to add certainty and credibility to sustainability labelling, remove ambiguous terminology, and increase the threshold for environmentally friendly programs. These measures will force companies to have more robust and transparent processes to ensure that any environmental claims on any service or product supplied in the EU are based on clear and presentable evidence. Member States will now have two years to transpose the Directive into national laws alongside the Ecodesign for Sustainable Products Regulation and the Right to Repair Directive. 

The UK currently tackles unverified environmental claims through the Consumer Protection from Unfair Trading Regulations 2008 (CPRs), and if approved, the Digital Markets, Competition and Consumers Bill will provide additional investigative and enforcement powers for the Competition and Markets Authority. These address false environmental claims as ‘unfair commercial practices’ and ‘misleading advertising’ but do not address misleading environmental claims specifically. Those are covered by the Competition and Markets Authority’s (CMA) Green Claims Code (GCC) and the Advertising Standards Authority’s (ASA) CAP Code (rule 11). These regulations were recently used by the Advertising Standards Authority under its Committee on Advertising Code to prosecute complaints of misleading claims last year.  

UK businesses wishing to export to the EU Single Market will most likely have to ensure that the verification of their products and services are robust and equivalent to EU standards and change product packaging and labelling standards to align with Brussels. 

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