What is the GCD Environmental Claims Directive?

The Green Claims Directive is a proposal of the European Commission. Its aim is to limit the effects of greenwashing and increase the control of producers. The Green Claims Directive (GCD), officially called the Directive on the Verifiability and Reporting of Environmental Product Claims, is a legislative proposal of the European Union aimed at protecting consumers and companies from misleading ecological advertising. This legal framework seeks to ensure that claims about the environmental properties of products and services are justified, clear and uniform throughout the European Union.

How does the Environmental Claims Directive work?

The GCD sets out a comprehensive framework for companies making environmental claims about their products or services in the EU. It requires claims to be supported by comprehensive analyzes taking into account the entire life cycle of the product, from production to disposal.

Key mechanisms of the Directive:
– Ban on unsubstantiated claims: General claims such as "green" must be supported by concrete evidence. Claims must be clear, precise and supported by scientific evidence.
– Regulated use of sustainability labels: Only officially certified brands are allowed. This measure ensures reliable and comparable information for consumers.
– Prevention of premature obsolescence: The directive prevents practices promoting premature obsolescence of goods, thereby promoting longer life and repairability of products.
– Transparent offset claims: Claims of neutral or positive environmental impacts must be supported by certified carbon credits and after all possible emission reductions have been achieved.

The requirements of the directive, the GCD requires companies to:
– They have provided robust scientific evidence for their environmental claims.
– Assessed impacts from a life cycle perspective.
– They transparently communicated the justification of the claims.
– Ensured independent verification of claims.

Impact on environmental labels

The directive introduces strict criteria for the use of eco-labels, discourages self-certification and mandates that new private labels be approved and provide added value for the environment.

Penalties for non-compliance

Companies that do not comply with the directive may face sanctions, including fines of up to 4 % of annual turnover and temporary exclusion from public procurement.

Obligation to comply with the directive

The Directive will become mandatory after a vote by the European Parliament on 12 March 2024. Member States must transpose the Directive into national law within 18 months of its entry into force, which we expect around 2026.

Compliance with the directive
The directive affects:
– All companies in the EU: Regardless of industry, companies selling goods and services in the EU must comply with regulations.
- Non-EU companies targeting EU consumers: These companies are also subject to regulations, ensuring that all products available on the EU market meet the same strict standards.
– Exceptions for micro-enterprises: Companies with less than 10 employees or with an annual turnover of less than EUR 2 million are exempt.

Why should you be interested in the directive?
– Risk of sanctions: Non-compliant companies may face severe sanctions, including fines and temporary exclusion from public procurement.
– Reputation and consumer trust: Adherence to the directive demonstrates a commitment to sustainability, increases consumer trust and separates the brand from the competition.
– A level playing field: The aim of the directive is to create a fair competitive environment by applying the same strict standards to all companies.
– Preparing for the future: Early adaptation to the directive lends companies an advantage in being ready for future environmental regulations.