Green Claims  Newsletter #3: Potential Fines for Greenwashing!

📰 Recent green news

• 27 June: India's Ministry of Environment has proposed a Green Credit Program that allows individuals, organisations, and industries to earn and trade credits for engaging in environmentally friendly activities.
  • The why: After the greenwashing observed in Verra's rainforest offsets program, this proposal could set a better example of how to effectively implement green credit programs.
• 16 July: The launch of EL GREEN MALL, the first pan-European marketplace for truly sustainable shopping, marks a significant milestone in promoting eco-friendly consumer choices across Europe.
• 17 July: The European Commission has presented the Global Gateway investment agenda for Latin America and the Caribbean
  • The why: This agenda paves the way for increased economic cooperation and the development of sustainable investment opportunities between Europe and the regions of Latin America and the Caribbean.
• 17 July: Lidl has announced a significant change to its beef mince packaging by replacing black plastic trays with a clear version, aiming to improve recyclability and reduce environmental impact.
  • The numbers: 63% plastic reduction, 250 tonnes of plastic a year saved, and up to 350 fewer delivery trucks being on the road per year
• 17 July: Australia has released regulations to combat greenwashing by companies, aiming to establish rules for sustainability claims and ensure transparency and accuracy in environmental marketing.
  • The why: These regulations on sustainability claims align with the emerging and ever-growing global trend of combating greenwashing.

🔍 Deep dive

Paying the Price for Greenwashing?

Image made with Imagine Art software

The gist: The potential introduction of a "Marken-TÜV" in the EU by 2025 could have significant implications for companies engaging in greenwashing practices. This regulation aims to tackle false advertising claims such as "environmentally friendly," "climate-neutral," or "CO2-neutral" by imposing penalties of up to 4% of global revenue, even retrospectively.

The specifics:

• According to the European Commission, for companies making green claims…
  • 40% of claims lack substantiation.
  • 50% of the 230 sustainability labels are unverified.
  • 53% of examined environmental claims are vague, misleading, or unsubstantiated.
• Future environmental advertising claims may need certification from independent bodies like DEKRA or TÜV SÜD, resembling a potential "Marken-TÜV."
• Certification costs will range from €500 to €54,000 per environmental claim.

For critical reflection:

• Several major brands have already reduced or ceased compensation payments, raising doubts about whether the saved funds will be directed towards genuine environmental measures or simply increase profits.
• Small and medium-sized enterprises (SMEs) are likely to be excluded from EU certification due to financial constraints.
• A quarter of companies are already opting for silence regarding their climate goals due to fear of repercussions.

The soundbites:

• “In the end, the well-intentioned approach could further complicate competition, hinder the climate-friendly transformation of the economy and bleed #Kompensationsprojekte financially. Let's hope it turns out differently!” - Prof. Dr. Karsten Kilian, Founder and Head of Brand Strategy of Markenlexikon.com
• “The path of real avoidance and reduction of activities that are harmful to the climate and the environment is tedious and small-scale, but upright.” - Viola Raddatz, Vice President of Sustainability at Weber Shandwick

⚖️ Regulation explained

Revision of the Packaging and Packaging Waste Directive (PPWD)

16 March: The EU's Packaging and Packaging Waste Directive aims to reduce packaging waste and promote a circular economy by implementing measures for recycling and reuse. As part of the European Green Deal, a proposed revision seeks to ensure all packaging is economically feasible for recycling or reusability by 2030, while tackling over-packaging and waste reduction.

To illustrate this further, imagine you are a producer engaged in manufacturing, distributing, or recycling packaging for the EU market. Let's explore how the essential aspects of the directive would be relevant to your operations:

1. Sustainability requirements: Harmful substances in your packaging will be limited and all packaging should be designed with recycling in mind, collected separately, and sorted for high-quality recycled materials by January 2035.
2. Recycling targets and minimum content: You will have to meet the ambitious targets for packaging which aim for full recyclability by January 2030. If your packaging falls under performance grade E, it will no longer be recyclable from that date. Plastic packaging will be subject to increasing minimum recycled content targets, with some exemptions for specific types.
3. Packaging minimisation: Your packaging must be designed with minimised weight and volume. Superfluous packaging and space occupied by materials (e.g., paper cuttings, bubble wraps) would be considered empty space, with few exceptions.
4. Labelling and information requirements: Ensure your packaging labels include material composition information. Within four years, you will have to add labels for packaging reusability and digital data carriers (e.g., QR codes) to facilitate tracking.

The proposed directive offers a holistic approach to sustainable packaging and waste management, encouraging businesses to adopt eco-friendly practices and work towards a greener future within the EU market.

That is all we have for now. Thank you for reading 🙌 Share this issue with others and subscribe for more insights about product compliance and sustainability.