As the demand for sustainable products has grown, so has the number of sustainability claims from brands. A recent study from the European Commission found that over half of the green claims examined from a variety of different sectors were vague, misleading, or unfounded, with 40% being entirely unsubstantiated. Such a complex landscape cultivates a culture of climate confusion and leads to inevitable distrust from citizens – over 230 different ‘green’ labels were identified by the Commission. This is not only profoundly deceitful, but there’s a growing number of savvy citizens that can no longer be appeased by capsule collections ambiguously touted as ‘eco’, ‘sustainable’, and ‘circular’. Until now, such claims have been voluntary and lacking regulatory oversight, but this is set to change.

In March 2022, the European Commission vowed to update the law to guarantee consumer clarity and to empower citizens to contribute to the green transition – both a hotly anticipated and much-needed proposal. Fast forward to March 2023, and the release of said proposal failed to comprehensively offer what we all hoped for – cohesion and clarity.

Though relevant to all consumer industries, the new Directive is part of the overall EU Textiles Strategy. It proposes that all voluntary environmental claims about products and services must be specific, backed up by solid scientific evidence, authorised by independent and accredited bodies with a certificate of conformity, and communicated clearly. It applies both to organisations producing in the EU and those importing products into the EU. The proposal seeks to balance the need to harmonise whilst acknowledging that no one size fits all in terms of methodology to assess environmental impacts across all product categories in different sectors.

If approved in its current form, it will have drastic implications for both those wishing to make green claims as well as those offering environmental labelling schemes and certifications. Those with methodologies already in the making can expect to scrap these schemes if they don’t “offer significant added value” compared to existing national or regional schemes. Moreover, we can anticipate the disappearance of many existing initiatives. The implications for those who fail to conform will be determined independently by EU Member States but could encompass fines of up to 4% of a company’s annual turnover, removal of products from the market, and ban from access to public funding.

There lie many unknowns in the proposal, which could lead to legal uncertainty and risk market fragmentation if not urgently addressed.

The main shortfall? No standard methodology to substantiate green claims or general guidance to national authorities is provided. Perhaps most surprising is the limited inclusion of the EU’s long-awaited Product Environmental Footprint (PEF) methodology. By not naming any specific method, it could lead to companies choosing very different methods that will make comparability incredibly challenging and result in an overall fragmented approach. Member States might have to designate national authorities to monitor companies’ environmental claims and ensure they are based on methodologies backed by “recognised scientific evidence and state-of-the-art technical knowledge.” In the short run, this could potentially result in 27 different interpretations of what this actually constitutes. Simplification of the verification process is a critical component of harmonised implementation. Simplification does not necessarily lead to worse results but, potentially, the opposite, as it can be more efficient. The foundational groundwork done in advance is of extreme importance and the more than ten years of effort put in to create the PEF deserves to be better reflected in the proposal. Harmonising and standardising requirements for green claims through the PEF would offer many benefits including clearer comparability for consumers, efficiency for enforcement authorities, and incentives for the industry to communicate more efficiently.

Furthermore, we hope to see alignment and policy coherence between the Substantiating Green Claims requirements and other EU legislations, such as the Empowering Consumers Directive, the Eco-Design for Sustainable Products Regulation, and the Packaging and Packaging Waste Regulation.

Many ambiguities remain around the harmonisation of such rules and the broader impact, but in the meantime, might we see moves towards more vulnerable ‘Mea Culpa’-style marketing akin to the likes of GANNI claiming ‘we’re not a sustainable brand’ or might brands retreat entirely leading to an influx of Greenhushing? i.e., companies stopping external communication about climate commitments. This could result in missed opportunities to engage the wider public in environmental discourse and highly contradicts the primary objective of the Substantiating Green Claims directive – to inform, guide, and empower citizens.

The Directive is currently being discussed within the European Parliament and Council and, if approved, will not come into fruition for at least another 13 months (with the potential to be ongoing until 2027). Thereafter, the 27 EU Member States will need to implement it.

We will indeed continue our dialogues with policymakers in a bid to drive future improvements and further harmonisation with this proposal, which fits into a much broader conversation about the need for better and more robust data and how to define this in a way that makes sense to all stakeholders. This is a cause that Global Fashion Agenda is actively advocating for. Industry organisations are currently deploying unprecedented resources and are working hard to update existing data tools. In parallel to these developments, we are calling for stakeholders to collaborate to define the data expectations, identify the data gaps, and create the pathways to fill them. Only through collective action can we establish a consistent approach to measure, compare, and communicate sustainability performance, and better data is key to this.

Read the full position paper from The Policy Hub – Circularity for Apparel and Footwear on the proposed Substantiating Green Claims Directive here.