EU consumers to be protected from greenwash

European Union officials have announced new plans that are designed to protect consumers from greenwashing and will apply to a wide array of goods and services. The Green Claims Directive has been put together following analysis from the European commission that found that just over half of all environmental claims on goods and services on general sale are vague, misleading or based on unsubstantiated data. The commission has also outlined concerns at the ever-growing number of environmental certification schemes that, it says, are confusing consumers. Around half of the 230 schemes operating in the EU are, the commission says, not sufficiently verified. 

The new directive will require companies to prove environmental claims with scientific evidence. Vague terminology describing the sustainability of goods and services will also be targeted by the directive. Companies in breach of the new requirements will face sanctions including fines and being excluded from public procurement opportunities. The commission will follow up the draft directive with more detail about what constitutes greenwashing, before the European parliament and individual EU states consider the proposals over the coming months. 

The annual letter from investors engaged with CDP, the corporate data disclosure platform, has been sent to the boards of more than 15,000 companies. The near 750 investors with $136bn of assets under management have asked for more detail on environmental policy and impact. There is a request this year for disclosure of plastics impact and the plans companies have to reduce it. 

CDP’s platform currently enables companies to disclose on climate, deforestation, water and biodiversity data, with a plastics disclosure platform due for launch soon. CDP trumpets the fact that, despite reports of investors deprioritising ESG matters, the investor letter suggests the opposite. Rather, CDP says, capital markets are clear that they need comprehensive corporate environmental data to inform their investment and lending decisions across markets. 

The ocean plastics pollution problem continues – with microplastics becoming a real concern. New research suggests that between 2005 and 2019 the amounts of floating ocean plastics increased tenfold at 12,000 global data collection points, following 25 years of relatively stable levels of microplastic pollution. The Five Gyres Institute have estimated that there are between 82 trillion and 358 trillion plastic particles in the oceans, with a mass of up to 4.9m tonnes. 

The increase of microplastics is not only down to current levels of pollution, but also because of the degradation and breaking down of large pieces of ocean plastic. The researchers also conclude that despite the high profile that the ocean plastics problem has had over the past few years, international policies from the 1970s and 1980s on banning dumping waste, including plastics at sea, were stronger and better enforced than later more voluntary measures since the 1990s. 

Deposit return schemes for packaging, particularly plastic bottles and aluminium cans, have been effective in many economies at maximising recycling rates. While the UK has been slow to move on bringing in such schemes, the devolved government in Scotland has been pushing on developing a high-profile scheme due to be introduced from August this year. So far so good. However, the scheme has become increasingly controversial as it has required producers to register for the scheme, and retailers, big and small, to commit to administer the returns via take-back machines. 

Products sold in Scotland will have premiums added to the retail price that consumers will then get back when they return them to stores. This process has been complicated enough, with many business groups calling for a delay to the launch so multiple potential glitches can be addressed. But the latest challenge to face the scheme’s implementers is a potentially fatal clash with the UK’s Westminster government over rules that prevent different regulations applying to the same products in England and Scotland. The UK government seems set to deny the Scottish administration’s request for an exemption that would allow prices to be higher in Scotland. It’s not clear how the proposed scheme could go ahead under such circumstances, until a UK-wide scheme is introduced, which is only on the cards in the medium term.

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