Status: 15.01.2024, 15:04 PM
By: Amy Walker
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Anyone who sometimes feels unsettled by the many supposedly green products in the supermarket will soon be helped. Because without concrete evidence, they are banned in the EU.
Brussels – Good news for consumer protection: The EU plans to pass a new law this week to ban so-called greenwashing on products. Specifically, all labels and markings on products that suggest particular environmental friendliness or climate neutrality are to be banned – unless the company can prove that its product really meets the claims.
The law is due to be adopted on Wednesday (17 January) at the plenary session of the European Parliament. After that, the member states have 24 months to implement it.
From "eco-friendly" to "ecological": these terms will be banned
The new ban sets out very precise requirements that focus on consumer protection. In the future, "general claims" such as
- environmentally friendly
- eco / ecological
- green
- Of course
- Nature-friendly
- climate-neutral
- climate-friendly
- CO₂-neutral
- CO₂-reduced
- Energy efficient
- biodegradable
or similar if no evidence can be provided as to the accuracy of those terms. The prohibition only applies to allegations that are kept general and vague. So if a company writes on the packaging that it is "made from 100 percent renewable energy", then that does not fall under the ban because the claim is very specific. Such claims are already regulated in the EU. If the packaging only said "made from renewable energies", then the new law would apply.
The term climate neutral is not clearly defined. This makes it difficult to assess how sustainable products with such a logo really are. © Gottfried Czepluch/IMAGO
In addition to consumer protection, the aim of the law is also to ensure fair competition. In this way, consumers should be better informed when shopping and thus be able to decide between genuinely climate-friendly and greenwashing products. Companies that can print certified eco-labels on their products are to be strengthened. Overall, the EU hopes that this will encourage more companies to work in a truly environmentally friendly way – rather than just claiming it.
Greenwashing in the financial sector: Germany is taking action against it
The topic of greenwashing is also highly topical in Germany and the EU in the area of financial services. In Germany, BaFin (Federal Financial Supervisory Authority) has set itself the task of preventing greenwashing in the financial sector. In particular, the aim is to protect investors from investing in risky stocks because they advertise with terms such as "climate neutral" or "green". BaFin defines greenwashing in the financial sector as follows:
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"Greenwashing is understood differently in the public debate. It is undisputed that it concerns practices in the distribution of products or financial services. This is the case when supervised entities do not disclose the sustainability profile clearly and honestly. Investors are thus potentially misled into thinking that their investments are not having the ESG impact they want. In some cases, greenwashing is also further related to the fact that supervised companies underestimate the extent of transition and physical risks or do not present the handling of them transparently in risk management. In both cases, supervision has a role to play."
Source: BaFin
By May 2024, three EU supervisory authorities are to submit a final report to make proposals on how to combat greenwashing in the financial sector in the future.