Beware of sustainability claims!

Claims about sustainability have recently come under a magnifying glass. Nowadays, companies have long ceased to compete with each other solely on the price and quality of their products.

Whether a product contributes or harms the environment is also a decision factor for many consumers. In addition, it appears that a green image is important in the “war for talent,” the competition among companies to attract the brightest minds as employees. Recently, however, it has become apparent that competition in this area is often unfair.

Companies that falsely label their products as green can expect stricter action in the coming period. In this blog, I briefly outline the developments in this area. I also explain why tightening these rules may also be relevant to you.

Lots of Greenwashing

The world is extraordinarily complex. For example, whether a particular product or company is sustainable is not easy to answer. Many times when such a broad claim is made, it is possible to reason both ways. Thus, there is a large gray-green area.

Greenwashing, the practice where a company pretends to be more sustainable than they are, is therefore commonplace. Who does not know Shell’s commercials about green energy, or the ‘green’ conscious labels of H&M. Some of the world’s biggest polluters still manage to position themselves as sustainable in this way.

EU has pioneering role

Improving information for consumers about the products they buy has been a focus of the EU for decades. This includes consumer information on sustainability. Accordingly, in 2022, the European Commission presented a study on this topic, the so-called impact assessment report.

It concluded that much remained to be done to make the information reliable. The Commission then also proposed a new Directive in 2023, the Green Claims Directive, aimed at tackling false environmental claims. That Directive, if adopted, will follow the already existing framework of the Unfair Commercial Practices Directive.

Also in the Netherlands action

There is also movement in this area in the Netherlands itself. As of Feb. 1, 2023, the Sustainability Advertising Code of the Advertising Code Foundation came into effect. Based on that code, complaints can be made to the Advertising Code Committee about misleading claims about sustainability.

Most recently, the Consumer and Market Authority has also presented a new, greatly tightened version of the Sustainability Claims Guideline. The guideline now contains five rules of thumb for sustainability claims:

1. Use accurate, clear, specific and complete sustainability claims;
2. Substantiate sustainability claims with facts and keep them current;
3. Make honest comparisons with other products or competitors;
4. Describe future sustainability aspirations in concrete and measurable terms;
5. Make sure visual claims and labels are helpful to consumers and not confusing;

Enforcement is possible

The series of actions by both European legislators and Dutch regulators makes it clear that combating greenwashing has become a spearhead. It was already the case that claims about sustainability that are not true can have civil-law consequences. After all, it is a form of deception on the basis of which agreements can be annulled. However, it does not stop there; administrative enforcement is also possible.

Any doubts? Get in touch

Do you make statements about the sustainability of your company and products and have doubts about whether those statements meet the tightened standards? Or have you made an important purchase partly on the basis of sustainability, and do you doubt the accuracy of those claims? Then give us a call for a no-obligation consultation, and our lawyers will think right along with you!