Greenwashing

Existing Greenwashing Regulations

Before delving into the new regulations aimed at combating greenwashing, it is crucial to understand the existing regulatory framework surrounding false environmental claims.

Federal Trade Commission (FTC) Greenwashing Guidelines (US)

In the United States, the FTC plays a crucial role in regulating deceptive marketing practices, including greenwashing. The FTC’s Green Guides provide guidance to businesses on how to avoid making deceptive environmental claims. However, these guidelines are not legally binding and are often criticized for their lack of specificity. To learn more, here’s a link to the FTC site. 

Recognizing the need for stricter regulations to combat greenwashing effectively, the United States is taking steps to enhance transparency and hold companies accountable.

The Stop Greenwashing Act

Introduced in 2021 by Senator Tom Udall, the Stop Greenwashing Act aims to establish legal definitions and penalties for greenwashing. If passed, this legislation would empower the FTC to regulate deceptive environmental claims more effectively.

In addition to new legislation, there have been calls to strengthen the FTC’s Green Guides. Advocates argue for clearer definitions of terms such as “recyclable,” “biodegradable,” and “carbon-neutral” to prevent companies from making unsubstantiated claims. The US government is exploring ways to allocate additional resources to the FTC for investigating and penalizing companies engaged in deceptive marketing practices.

International Organization for Standardization (ISO)

The ISO has developed several standards related to environmental labeling and claims. ISO 14020 series provides principles and guidelines for environmental labels and declarations. These standards help businesses provide accurate and verifiable information about their products’ environmental impact.

New Greenwashing Regulations in the European Union

The European Union is also taking significant steps towards combating greenwashing and promoting transparent communication regarding environmental claims.

The Sustainable Products Initiative (SPI)

The SPI is part of the European Green Deal and aims to make products placed on the EU market more sustainable. It includes measures such as developing clear sustainability criteria, introducing mandatory labeling schemes, and addressing false environmental claims.

The European Green Claims Initiative

The European Commission plans to introduce a legislative proposal for the European Green Claims Initiative by 2022. This initiative will establish harmonized rules for substantiating and verifying environmental claims made by companies operating within the EU.

The Single Market for Green Products Initiative

The Single Market for Green Products Initiative aims to establish a harmonized EU-wide framework for assessing and labeling products’ environmental performance. This initiative will help consumers make informed choices by providing reliable information about a product’s sustainability credentials.

In addition, in 2023 the European Council and Parliament reached a provisional agreement on a new EU directive to ‘empower consumers for the green transition’. Key features of the new rules include the following:

• • Ban on Unsubstantiated Generic Environmental Claims, Such as ‘Climate Neutral’
    

    The new directive will update the current list of commercial practices that are banned in the EU to include generic environmental claims – such as “environmentally friendly”, “natural”, “biodegradable”, “climate neutral” or “eco”, without proof of recognized excellent environmental performance relevant to the claim.

• • Ban on Unverified Claims Based on Emissions Offsetting Schemes

    Unverified claims that suggest a product has a neutral, reduced or positive impact on the environment also will be banned.

• • Ban on Uncertified Sustainability Labels

    This includes sustainability labels not based on approved certification schemes or established by public authorities.

    The directive to empower consumers for the green transition forms part of a larger EU package of measures, which includes the proposed Ecodesign for Sustainable Products Regulation, the Green Claims Directive and the Right to Repair Directive. To learn more, please visit the European Parliament Site.