Green Claims Newsletter #4: How a 'true cost' campaign is shaking up retail pricing and sparking a national debate

📰 Recent green news

• 21 July: Polylactic acid, a popular bioplastic, has been found to not degrade in the sea.
  • The why: This finding means that the term “biodegradable plastic” is misleading as it gives the impression of a material that decomposes in the environment.
• 26 July: The Regional Court of Karlsruhe sided with Deutsche Umwelthilfe's lawsuit against dm-drogerie markt, mandating the company to discontinue the use of terms like "climate neutral" and "environmentally neutral" on a wide range of products, spanning from soap to detergent.
  • The why: This ruling has the potential to pave the way for tighter regulations on environmental claims in advertising and may lead to further successes in court against companies engaged in greenwashing practices.
• 27 July: Only 39 of 122 green claims have any supporting evidence or verification to back them up, according to research by Consumer Policy Research Centre.
  • The why: The worryingly low figure of 32% underscores the urgency for more stringent scrutiny and regulation of environmental claims, exemplified by the forthcoming Green Claims Directive.
• 28 July: Better Cotton urges clearer green claims standards and guidelines between the latest Green Claims Directive and the Directive on Empowering Consumers for the Green Transition to address potential confusion in sustainability labelling within the fashion industry.
  • The why: Better Cotton's advocacy for clearer green claims standards and guidelines is a crucial step toward promoting truthful environmental marketing practices, as better understanding and adherence to regulations become paramount for companies in the industry.

🔍 Deep dive

PENNY's 'True Cost' Campaign: a bold move shaking up retail pricing and nation conversation

Image courtesy of heise online

The red price signifies PENNY's retail cost, while the green inflated price reflects the calculated "true cost.”

The gist:

• German discounter PENNY launches week-long “True Cost” campaign, raising the cost of nine of its products to take into account the environmental cost of producing the foods.

The specifics:

• The price changes include wiener sausages rising from €3.19 to €6.01, mozzarella going up by 74% to €1.55, and fruit yoghurt increasing by 31% from €1.19 to €1.56.
• The awareness campaign week coincides with the participation of scholars from both the Nuremberg Institute of Technology and the University of Greifswald.
• PENNY has said it will donate the excess proceeds (without commenting on whether it was prepared to take a knock in profits) to the charity Zukunftsbauer or Future Farmer, which supports family-run farms in Alpine regions.

The why:

• This campaign is a groundbreaking, yet controversial, attempt to bring attention to the hidden costs associated with animal products.

For critical reflection:

• From the perspective of the German Farmers' Association (DBV):
  • Penny's “true price” campaign is misleading as it doesn't adequately reflect the actual costs and efforts made by farmers to implement sustainable practices.
  • The "true price" campaign claims to include environmental and social costs, but it doesn't accurately represent farmers' actual efforts and expenses for sustainable practices.

The soundbites:

• “We wish to create an awareness around the hidden environmental costs of groceries… We need to put out the uncomfortable message that the prices of our foodstuffs which are accrued along the supply chain in no way reflect the environmental on-costs.” - @Stefan Görges, Penny’s chief operating officer
• "Positive effects of agricultural production are simply not taken into account… It is more than doubtful if such methods also contribute to increasing margins in trade." - @Bernhard Krüsken, the Secretary General of the DBV

⚖️ Regulation explained

Italy’s Mandatory Labelling Requirements for Packaging

As of January 1, 2023, a directive in Italy (Decree No. 116 has been implemented that requires thorough labelling of packaging materials across the supply chain. This initiative seeks to enhance transparency, foster environmentally responsible practices, and ensure alignment with standardised packaging labelling protocols.

To illustrate this further, imagine you are a manufacturer, distributor, or retailer involved in the packaging industry in Italy. Let's delve into how the key components of the directive would impact your roles and responsibilities within the supply chain:

1. Specific Labelling Information Required: All of your packaging materials used in Italy, including those for export and import, must include an identification code of the packaging material, along with instructions for segregating waste and correct disposal procedures. This requirement applies to the entire supply chain, from packaging manufacturers to retailers.

2. Labelling Variation for Household and Commercial Products:

   For packaging, the structure of labelling varies between B2C (household) and B2B (commercial). B2C packaging needs to include consumer instructions for proper disposal, while B2B packaging requires material codes for separable parts and may have additional voluntary information.

3. Collaboration with Regulatory Authorities: The directive requires your cooperation with regulatory agencies responsible for overseeing compliance. This includes addressing any inquiries or concerns related to the labelling guidelines and ensuring open communication with authorities.

4. Penalties for Non-Compliance: If the packaging placed on the Italian domestic market does not meet the requirements, administrative penalties may be imposed. If the environmental labelling for Italy is missing or incorrect, fines of 5,200 to 40,000 euros can be imposed.

The new directive establishes a comprehensive framework for transparent packaging and labelling practices in Italy, driving sustainable choices and environmental awareness across the supply chain.

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.