Green claims update: June 2024

Welcome to our round-up of the key legal and regulatory developments relating to green claims. If you have any questions about this, or about wider ESG and sustainability regulatory developments, please get in touch (contact details below).

Key updates

CMA publishes findings of first green claims investigation

The Competition and Markets Authority (CMA) has published the results of its investigation into green claims made by ASOS, Boohoo and George at Asda. Each retailer has signed undertakings committing to change the way it promotes its green credentials and must now regularly report to the CMA on its steps to comply with them. Whilst the investigation focused on the fashion sector, the CMA has made clear it expects all businesses to familiarise themselves with the undertakings and ensure their own green claims are up to scratch. See our blog for further information.

Empowering Consumers for the Green Transition Directive adopted

The Empowering Consumers for the Green Transition Directive has been published in the Official Journal of the European Union. Member States must apply the new rules from 27 September 2026. The Directive amends the EU's Unfair Commercial Practices Directive governing green claims including by: (i) banning specific green claims outright (eg unsubstantiated/vague claims like "sustainable"); and (ii) setting stricter requirements for substantiating green claims about future environmental performance, which must be supported by a detailed and realistic implementation plan regularly verified by an independent third party expert.

EU Parliament sets out negotiation position for Green Claims Directive

The European Parliament has adopted its first reading position on the EU's proposed Green Claims Directive (GCD). Key changes proposed include: (i)  stricter requirements on communicating future-looking green claims and claims based on carbon credits; (ii) a requirement that businesses in highly-polluting industries make green claims in relative terms by addressing their overall negative environmental impact; and (iii) a proposal to establish a simplified verification procedure for certain lower-risk green claims. The European Council will  now adopt its position on the GCD (expected week beginning 17 June).

EU approves Carbon Removal Certification Framework

The European Parliament has approved a new Carbon Removal Certification Framework to prevent greenwashing. To be certified under the scheme, carbon removals must meet a minimum set of criteria including that they are quantifiable, 'additional' (i.e. go beyond standard practices) and they ensure long-term storage of carbon. This must be verified by an independent certification body. The regulation will also introduce a new public EU registry listing all certified carbon removals. The Framework must now be adopted by the European Council.

Sector-specific updates

Retail

 Fashion retailer Zalando has agreed to amend its website following an investigation by the European Commission which found that the retailers' green claims were unsubstantiated and/or likely to mislead. The Commission recommended that Zalando replace generic terms like "sustainable" with clear numerical information, and that it remove various sustainability icons it had created and displayed against products to signal their green credentials (such as recycled content).

Food & Drink

• The ASA has published findings from its review of green claims in food & drink advertising. Key themes include the use of ‘green’ and ‘natural’ imagery, "sustainable" claims and regenerative farming-related claims. Whilst there was no widespread evidence of greenwashing, the ASA found some breaches of existing ASA rules including comparative green claims which were not clear or suitably qualified. It will publish further guidance for the sector in due course and will conduct additional monitoring and engagement to ensure businesses comply.
• The Food Data Transparency Partnership (FDTP) has published a paper on its plans to promote more consistent, accurate and accessible environmental impact data for the food & drink sector. The FDTP will focus on developing a standardised accounting method for reporting this data which could, in turn, be fed into a new standardised eco-labelling scheme for food and drink products. According to the FDTP, mandatory eco-labelling would help address the current inconsistency and confusion created by multiple voluntary eco-labelling schemes and reduce the risk of greenwashing.
• Danish Crown, the largest pork producer in Europe, has admitted to greenwashing, acknowledging that its claim "Danish pork is more climate-friendly than you think" breached Danish marketing law and would not be used again. At the time of the admission, the claim was already subject to ongoing legal proceedings before the Dutch courts (which had previously found that Danish Crown's use of the label "climate-controlled" pork was misleading).

Aviation

• The District Court of Amsterdam has found that 15 green claims made by KLM were misleading and breached Dutch consumer protection law. These included claims which suggested: (i) that flying is, or could become, environmentally "sustainable"; and (ii) that purchasing or contributing to KLM's carbon offsetting or Sustainable Aviation Fuel projects reduced the climate impact of flying (the court said KLM had painted an "overly rosy picture" of their positive impacts). The judgment follows similar decisions by the UK's ASA against airlines for misleading green claims.
• The European Commission and EU Consumer authorities have written to twenty airlines identifying several potentially misleading green claims, including use of the term “sustainable aviation fuels” without justifying the fuels' environmental impact, and presenting flight CO2 emission comparisons without sufficient and accurate information about the basis of the comparisons. The airlines have thirty days to provide a response explaining how they will address the Commission's concerns.

Publications

Snapshots:

• Green claims form the focus of CMA investigation into Unilever
• ASA rules against airlines for misleading green claims in paid-for ads
• New advertising guidance released on Green Disposal Claims

Blogs:

• Green claims: key takeaways from the CMA's first investigation