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EU to slap penalties on companies making false green claims

23 January 2023

EU member states will be in charge of imposing “dissuasive” penalties on companies making unsubstantiated environmental claims about their products under a draft new EU law, seen by Euractiv.

The aim of the proposal, due to be tabled by the European Commission in the coming weeks, is to help consumers make better-informed choices about the products they buy.

Whether “green”, “eco” or “environmentally friendly” – almost half (40%) of the environmental claims made about products are “unsubstantiated”, the Commission says in the draft.

“Consumers lack reliable information about the sustainability of products and face misleading commercial practices like greenwashing or the lack of transparency and credibility of environmental labels,” the EU executive writes in a preamble to the draft law.

“Companies making ‘green claims’ should substantiate these against a standard methodology to assess their impact on the environment,” it adds, referring to the EU’s flagship Green Deal agenda, adopted in 2019.

To ensure green claims are demonstrated, EU member states will be requested “to set up a system of verification for the substantiation of environmental claims” that will have to be carried out by “independent verifiers”.

Most importantly, EU countries will be put in charge of ensuring that “those rules are enforced” and introduce “penalties” on offenders that “should be effective, proportionate and dissuasive,” the draft says.

Penalties should be established based on common criteria, it continues, saying those should include “the nature and gravity of the infringement” as well as “the economic benefits derived” from it and the potential environmental damage caused.

Campaigners applauded the move, saying it is “paramount that member states set high enough penalties” in order to discourage companies from breaking the law.

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