Environmental Claims Escalate: Business in the Hot Seat

The EU Commission's Green Claims directive introduces new documentation requirements for companies making environmental claims on their products and services while emphasizing a broader and more comprehensive environmental assessment beyond CO2 and Global Warming Potential.



Af Jesper Kokborg Lassen og Anders Iversen , ENERGYSOLUTION A/S

Previously, national institutions, such as the Danish Consumer Ombudsman, had jurisdiction over these rules and acted as watchdogs to combat greenwashing. This combination of national legislation and watchdogs led to varying standards and control levels for environmental claims across the EU, resulting in weak, unsupported, and occasionally even deceptive claims. In fact, an EU Commission study published in 2020 found that 53% of green claims gave vague, misleading, or unfounded information, while 40% of environmental claims had no supporting evidence.

To address these issues, the Commission proposes the creation of a pan-European environmental claims database. This database will house scientifically backed environmental claims with third-party verification, usable across EU member states. Companies seeking to make such claims will be required to provide scientific evidence and will be held accountable for their accuracy.

Some exceptions exist, particularly for microenterprises, but, overall, both EU-based and operating companies will need to meet Green Claims' requirements. This directive aims to foster credibility, transparency, and accuracy in environmental claims, empowering consumers to make informed choices while promoting environmental responsibility among businesses.

The Promise of Uniform Quality in LCA Work
Existing frameworks adhering to these criteria proposed in the Green Claims directive already exist in the Environmental Product Declaration (EPD) framework. The International EPD System is one of the most recognized EPD certification schemes utilizing the EPD framework. However, the EPD framework reveals a nuanced reality, as the credibility of verified claims varies due to factors like the choice of program operator, and the subjective quality criteria of the 3. Party verifier. Operators' diverse guidelines, and verification criteria yield differing quality, underscoring the need for vigilance when assessing EPD credibility. Furthermore, variations in requirements exist based on program operators and local mandates, compounded by new and emerging EPD frameworks with reduced documentation needs.

At present, decentralized formulation of Product Category Rules (PCR) results in varying guidelines from private label program operators, like EPD Norway and Germany's Institut Bauen und Umwelt e.V. (IBU). This divergence is particularly significant in evaluating circular material use. Two different program operators could approach this differently, significantly affecting Life Cycle Assessment (LCA) outcomes.

Put simply, these varying rules can lead to markedly different environmental impact assessments, especially when dealing with recycled or reused materials. Standardizing guidelines is vital to ensure consistent and reliable evaluations of a product's environmental footprint.

The European Commission strives to harmonize the framework behind substantiated environmental claims in the single market through the Green Claims directive by aligning standards within the evolving Product Environmental Footprint (PEF) initiative. Key is consistent PCRs for LCAs of products, e.g., construction steel or wood. The aim is for these rules to ensure uniformity in environmental impact calculation and modeling, enhancing transparency, and impartiality from a private EPD program operator.

The Question of Credibility.
The impending implementation of the Green Claims directive promises a transformative impact on the landscape of environmental practices. While its primary aim is not to disrupt established systems like the EPD Framework, the directive suggests a future where diverse avenues exist for companies to validate their environmental assertions.

This could potentially lead to a coexistence of different methods, such as the PEF and various EPD programs, which could in turn introduce a significant decision-making dilemma.

Though EPDs and PEF assessments share a foundational methodology, with both being based on the same LCA standards, namely ISO14040, ISO14044, and EN 15804, in addition to addressing the same impact categories, nuanced differences set them apart. While EPDs currently are regarded as a baseline requirement, the trajectory suggests that EPDs and PEFs, along with their accompanying environmental impact assessments, will progressively evolve to a point where the results of the environmental impact assessment become a competitive factor.

As this evolution hopefully takes shape, the focal point will shift from the mere possession of an EPD to the evaluation of its credibility and environmental impact. Within this framework, environmentally conscious consumers and businesses might begin to question the legitimacy of EPDs from less credible frameworks or program operators. An emerging consensus could potentially highlight uneven quality among EPDs from different sources.

In the emerging landscape, the pivotal choice will extend beyond the selection between EPDs and PEFs. Instead, the emphasis will be on discerning and opting for assessments of credibility and quality. With this transformation underway, the significance of robust environmental claims and their authenticity will probably magnify. This heightened importance underscores the necessity for both businesses and environmentally conscious consumers to make well-informed decisions.

Hovedforfatter Jesper Kokborg Lassen Sustainability Specialist +45 30 735 180 jkl@energysolution.dk .

Medforfatter Anders Iversen Senior Sustainability Specialist +45 20 773 304 aiv@energysolution.dk .

Shifting Environmental Practices
The Green Claims directive is composed to intensify scrutiny over prevailing practices, particularly the use of non-third party-verified LCAs as substitutes for verified LCAs, EPDs or PEFs. As the directive takes effect in 2027, these practices are likely to fall short of Green Claims stringent criteria, highlighting a growing commitment to bolster environmental integrity.

Notably, what once constituted a substantiated claim in 2020 might not align with the elevated claim requirements in 2027. Companies should recognize that materials predating the Green Claims directive could be subject to the new standards. The directive, although approved as a proposal, is subject to further adjustments before final implementation. Amid this evolving landscape, one certainty remains: businesses will face mounting accountability for the accuracy of their environmental claims, and the need for 3. Party-validated LCA will grow in years to come.

The question remains: How extensively will the Green Claims directive disrupt the current EPD practices? Will PEF successfully take over businesses not already cultivated by the EPD framework? And finally, will the Green Claims directive manage to shift the focus on carbon footprint to a more holistic environmental LCA approach? A comprehensive exploration of this matter is imperative as the directive reshapes the standards and expectations surrounding environmental claims.

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