Young Folks

Banned greenwashing terms: EU moves to eradicate greenwashing

If you’re anything like me, or the 78% of Australians believing sustainability practices are important, chances are you’ve stood indecisive in a grocery aisle choosing between two similar products and then grabbed the one marketed with words like ‘sustainable’ or ‘biodegradable’. We do this for a good reason: the sense of personal responsibility for protecting the environment can feel like an insurmountable task and choosing where we spend our money is one of the few ways every one of us can make a difference. But does purchasing products emblazoned with these words really mean the planet is better off? And how much do brands actually need to do for the environment to put these terms in their products?

I grew up in Finland, and part of my daily rhythm is a quick check on what’s making news on the other side of the world. Making headlines in Finnish news recently is the European Union (EU) taking legislative steps to ban greenwashing. Under the legislation, companies in the member states can no longer make unsubstantiated claims relating to sustainability and the environment without having evidence through third party certifications to back it up.

As consumers in Europe and beyond have become more conscious of the environmental effects of their everyday decisions, greenwashing has become a lucrative marketing tactic to sell products under shaky claims. The EU taking a stand against is globally significant. It’s the largest single market economy in the world, and its regulatory power and authority have ripple effects around the world as other countries and jurisdictions often end up following the EU way.

What’s being banned, and why is this important?

In January, the members of the European Parliament (MEPs) voted to ban greenwashing terms including:

  • carbon-neutral;
  • environmentally friendly;
  • ecological;
  • energy-efficient;
  • eco-friendly; 
  • green;
  • natural; and
  • climate-neutral.

If you’re thinking ‘whoa, that’s a lot’, it’s because it is. This new ruling will be the most comprehensive of its kind in the world, and all 27 member states now have 24 months to incorporate it into their laws. As an EU directive, it sets out a goal which the member states must achieve. How they implement and police it might vary, but nevertheless, it must be worked into legislation. This means packaging information and sustainability claims will look a whole lot different in the EU area by the end of 2026. 

While Australia is a long way from Europe (in distance, and at times in politics) things might start to change here too. Afterall, in December 2023 the ACCC updated its greenwashing guidelines for companies making environmental claims and the federal government set an ambitious new course for sustainable packaging targets in Australia.

Besides other jurisdictions often following the lead of the EU, regulations in the EU have a direct effect on the global companies operating in its area, and can push changes into the global economy this way. A great example is the EU’s Common charger directive from 2021 that determined technology companies must have a universal charger for all phones to protect consumers and combat e-waste. As a result, Apple will soon have to decide whether to manufacture a European charger, or just a single one sold globally.

Helping consumers make genuinely better choices

The aim of these changes is to benefit consumers. Up until now, instead of minimising their emissions, companies have largely relied on carbon offsetting to declare products ‘carbon-neutral’ or ‘climate-neutral. Think of a flight being sold as ‘carbon-neutral’: the emissions from the flight occur just the same, but the airline will just purchase the emissions’ worth of offsets. 

When asked if decarbonising is a good strategy for cleaning up a company or a red herring, Patagonia’s director of philosophy Vincent Stanley summed it up perfectly saying ‘Not a red herring, but only a small part of the story, and offsets are an even smaller part. We could decarbonize the economy and still lose the Earth if we don’t address water shortages, habitat loss, species extinction’. Companies that have built their climate efforts on offsets alone will have to rethink how they operate: decarbonising supply chains by coming up with less emitting ways of doing things, and only using offsets for emissions they aren’t able to reduce. 

All of this will hopefully trickle down so that consumers will grow to have a better understanding of the true environmental effects of different products and services. The more information companies are required to disclose, the better equipped we will be to make informed decisions when it comes to the environment. 

Doing the right thing – how brands can communicate their positive impact

This all sounds very good, but you might be wondering: what about the brands that are actually doing the right thing, and not just saying they are? It’s particularly important that these companies won’t resort to greenhushing – the opposite of greenwashing where brands cease talking about their environmental efforts (or minimise them) in the fear of backlash. This is where third party certifications will play an important role.

The EU greenwashing ban isn’t an outright ban, as brands who are committed to globally recognised climate and ESG certifications can still talk about what they’re doing – as the claims they are making have been verified by an independent third party. This will ensure that companies are accurately measuring and reporting on their impact to attain accreditations like B corp, Climate Active, Fair Trade or TRUE Certification for Zero Waste. Not only will this make purchase decisions easier for consumers, but it will level out the playing field so that responsible companies, no matter what size, can gain a competitive edge by being transparent in their environmental reporting. 

While we wait to see what happens in the EU, here in Australia, local brands that are proactive rather than reactive when considering their environmental effects could gain a competitive edge through increased trust and transparency. In 2023, we saw the ACCC continue to clamp down on greenwashing with its ‘internet sweep’ which found more than half of brands reviewed were making concerning claims about their environmental credentials. The era of unchecked generic environmental claims is over, so brands labelling their packaging as ‘biodegradable’ and hoping that no one actually plants it in their garden, or calling their shampoo ‘natural’ because of a drop of tea tree oil in it – yeah, that might not cut it.

Sources: 

Magna, TEADS, Project Drawdown, “Sustainability Speaks: Breaking the barrier of climate communication”, https://magnaglobal.com/wp-content/uploads/2023/09/Teads-PD-Sustainability-Speaks.pdf , Accessed on February 9, 2024.

European Parliament, “EU to ban greenwashing and improve consumer information on product durability”, https://www.europarl.europa.eu/news/en/press-room/20230918IPR05412/eu-to-ban-greenwashing-and-improve-consumer-information-on-product-durability , Accessed on February 9, 2024.

Australian Competition and Consumer Commission, “Greenwashing Guidelines”, https://www.accc.gov.au/system/files/greenwashing-guidelines.pdf, Accessed on February 12, 2024.

Australian Packaging Covenant Organisation, “APCO welcomes environment ministers announcement on sustainable packaging”, https://apco.org.au/news/20YOl0000020l6AMAQ, Accessed on February 12, 2024.

European Commission, “One common charger for all”, https://single-market-economy.ec.europa.eu/sectors/electrical-and-electronic-engineering-industries-eei/radio-equipment-directive-red/one-common-charging-solution-all_en , Accessed on 9 February, 2024.
Patagonia, “A Better Way to Do Business”, https://www.patagonia.com/stories/a-better-way-to-do-business/story-141300.html, Accessed on February 12, 2024.

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