On March 6, 2024, a new Directive was published in the Official Journal of the European Union, which strengthens the position of consumers in the framework of the green transformation through better protection against unfair practices and through better information.

This Directive was adopted in the framework of the fight against greenwashing - an umbrella term for misleading environmental claims. The aim of the Directive is to introduce special rules into consumer law to deal with business practices that mislead consumers and prevent them from making decisions representing sustainable consumption.

Such practices are, for example, practices associated with premature obsolescence of goods, deceptive claims regarding the environment, misleading information about the social characteristics of products or traders' businesses, or non-transparent and untrustworthy sustainability labels. (Katarína Brath Liebscherová, more at odpady-portal.sk)

On 30 March 2023, a draft directive was published amending the Unfair Commercial Practices Directive and the Consumer Rights Directive with the aim of empowering consumers in the green transition through better protection against unfair commercial practices and better information (the "Eco-laundering Directive" ). Directive ^[1] formally signed on 28 February 2024 by the Presidents of the European Parliament and of the Council and published in the Official Journal of the European Parliament on 6 March 2024. The aim of the directive is to provide consumers with additional information on the environmental impact of specific products and to protect them from misleading commercial practices regarding the sustainability aspects of said products. The countdown has now begun: from the entry into force of the directive on 26 March 2024, EU member states must transpose the measures contained in the directive into their national legislation within 24 months (ie by 27 March 2026) and apply the provisions as from 27 September 2026. (Francesca Biebuyck, more at lexology.com)

Regulations implemented for this purpose – from the EU's Sustainable Finance Disclosure Regulation (SFDR) 2021, which governs disclosures through Articles 6, 8 and 9 of financial products, to the UK Financial Conduct Authority's forthcoming anti-greening rule (FCA) Authority and requirements for disclosure and sustainability labeling Regime — comes with the responsibility of fund managers.

Below, we delve into the regulations and how fund managers can navigate the complex, multi-jurisdictional regulatory framework shaping ESG investing in Europe. (Oliver Rochman, Carl A. Valenstein, Chris Warren-Smith, more at lexology.com)

It entered into force on March 26, 2024 Directive (EU) 2024/825 on the empowerment of consumers for the ecological transition (Empowering Consumers Directive or ECD). The directive must be transposed into national legislation by 27 March 2026 and applied from 27 September 2026. The aim of the ECD is to protect consumers from being misled by communications relating to the environmental, social or circular aspects of a product, including goods and services.

More specifically, the ECD amends the provisions of the Unfair Commercial Practices Directive (UCPD) and the Consumer Rights Directive (CRD) to introduce obligations to provide clear and relevant information regarding environmental or social claims and aspects of product circulation. ECD will work along with the Environmental Claims Directive (GCD), which will create a specialized regime for managing environmental claims, is currently in its early stages. (Katherine Connolly, Dominic Coppens, Nicolas JS Lockhart, more at lexology.com)

In March 2022, the Commission proposed an update of Union consumer law to ensure consumer protection and enable consumers to actively contribute to the green transition. This proposal is part of one of the initiatives of the New Consumer Agenda 2020 and the Commission's 2020 Action Plan for the Circular Economy, in addition to ensuring the continuity of the European Green Deal. On February 20, the Council approved the proposal of the European Parliament, thus definitively approving the Directive on ecological money laundering. The Presidents of the European Parliament and the Council signed the Directive, it was published in the Official Journal of the European Union on March 6 and will enter into force 20 days after its publication, i.e. on March 26, 2024. Member States will have 24 months from publication to transpose them and their respective provisions will enter into force 30 months after said publication. (Augusta Lawyers, More at lexology.com)

If you regularly consume product ads or news from shoppers, you've most likely come across the word "sustainability." As a result, depending on your news intake, you may also have come across the word "greenwashing" and seen brands you know and love accused of it. If you're not sure what these terms mean or how they're relevant to consumers - here's a guide!

What is greenwashing? 

Greenwashing occurs when products or practices are falsely promoted as ecological or "green." Companies can invest money in looking green without actually making their products more sustainable. When this happens, consumers may think they are making an environmentally conscious decision, when in fact they are being deceived. (More on www.earthday.org)

The so-called directive on ecological claims supplements the already approved EU ban on greenwashing . It defines what kind of information companies must provide to justify their environmental marketing claims in the future. It also creates a framework and timelines for reviewing evidence and approving claims, and specifies what will happen to companies that break the law.

Verification system and sanctions

MEPs agreed with the Commission that companies should submit any future environmental marketing claims for approval before they are used. According to the received text, the claims would be assessed by accredited verifiers within 30 days. Companies that break the rules can be excluded from procurement, lose their income and face a fine of at least 4 % of their annual turnover. (More on europarl.europa.eu)

It is the year 2024 and companies unbelievably continue to mislead consumers with false green claims in a shady attempt to increase their profits. Greenwashing is everywhere. Even companies that sell the most mundane things - straws, cups, water bottles - are equipped with the best marketing techniques to confuse,  they manipulate and drive consumers into absolute madness. Believe it or not, in the US indeed, people camp outside stores to get a reusable cup …

Consumers often rely on the information companies choose to present when making purchases. And they are overwhelmed by the amount of green advertising in the products. BEUC November study - along with ICRT – in 16 European countries, as well as in the USA, Canada and Oceania, it focused on the perception of ecological claims by consumers. It turns out that on both sides of the Atlantic, consumers are looking for environmental information when making purchasing decisions. However, many understandably have no idea how it works. More than 65 % Europeans and around 40 % Americans report that they know very little about the requirements that companies must comply with in order to use environmental claims.

What most of us don't realize is that the banana we bought in the supermarket labeled as 'carbon neutral' relies on carbon offsets to make that claim and still emits CO ₂ . Such misleading claims encourage consumers to continue making unsustainable purchases that slow down the fight against the climate crisis. (Sandra Lima)

The directive, which was adopted today by 593 votes to 21 with 14 abstentions, aims to protect consumers from misleading marketing practices and help them make better purchasing decisions. To achieve this, a number of problematic marketing practices related to greenwashing and premature obsolescence will be added to the EU's list of prohibited business practices.

More accurate and reliable advertising

Most importantly, the new rules aim to make product labeling clearer and more credible by banning the use of general environmental claims such as "organic", "natural", "biodegradable", "climate neutral" or "eco" without proof. The use of sustainability labels will now also be regulated due to the confusion caused by their proliferation and the lack of benchmarking data. In future, only sustainability labels based on official certification schemes or established by public authorities will be allowed in the EU. In addition, the directive will ban claims that a product has a neutral, reduced or positive impact on the environment due to emission compensation schemes.

The Dentons Report “Greenwashing: The Next 'Big Thing'? , examines laws related to voluntary corporate ESG disclosure as well as greenwashing regulations in 19 jurisdictions around the world. The report reflects the legislative environment as of September 2023. As the demand for environmentally sustainable and socially responsible products and services grows, companies around the world are increasingly promoting their ESG credentials through various forms of public communication – from press releases to packaging. Claiming to be "green" or sustainable (even in relation to governance or social aspects such as diversity and inclusion and gender progress) has become a factor in competitiveness among global businesses. This presents a range of legal and reputational risks, including allegations of 'greenwashing' and 'ESG wash' and liability risks arising from misrepresentation, breach of contract, loss of business and possibly fraud and criminal penalties. Civil society and regulators have become more aggressive in holding companies accountable for greenwashing. The report examines how existing laws apply to multinational corporations' voluntary communications regarding the environmental, social and governance (ESG) aspects of their internal operations, products, services, supply chains and wider value chains. (Global, lexology.com)

EIOPA has noted an increased appetite among European insurance consumers and pension savers to purchase sustainable insurance or pension products. This has resulted in an increased offering of such products by insurance and pension providers, but also a corresponding increase in misleading sustainability claims, known as 'greenwashing'. According to EIOPA, sustainability claims are claims related to the sustainability profile of an entity or product that depict that products or entities benefit from sustainability factors or that products or entities take sustainability aspects into account. These claims can be misleading in various ways, for example: selective disclosure, empty claims, omission or insufficient disclosure, vagueness or vagueness, inconsistency, lack of meaningful comparisons or thresholds, unsubstantiated, misleading images or sounds, irrelevance, outdated information, misleading terminology regarding sustainability or falsity. (Pierre-Michaël de Waersegger, Emmanuelle Mousel)

As the 28th UN Climate Change Conference (COP28) continues, European city mayors have called on the EU to meet its climate ambitions and commit to a minimum of 90 % net reductions in greenhouse gas emissions by 2040. "Despite growing opposition to climate action, it is crucial that Europe maintains its global leadership by adopting an ambitious new target to reduce greenhouse gas emissions by at least 90 % by 2040," says André Sobczak,  Secretary General of Eurocities. "This will ensure that we can build a fair, green and prosperous future for people in Europe and around the world." To achieve this key and urgent task, in the new  position document , published today by Eurocities, states that:

• The European Commission must strengthen direct cooperation and support for cities.
• Cities must receive targeted funding and EU funding, including the European Investment Bank program for cities, increased resources for cities in the next EU budget and EU mechanisms to connect cities with private funding.
• The EU and member states must work with cities to implement the key of the Fit for 55 package , updating EU legislation and policy to support cities in implementing sustainable transport, energy efficient buildings, sustainable food systems and the widespread adoption of renewable energy sources.
• A large share of emissions in cities remains uncontrolled, for example the production and consumption of food and consumer goods and services. The EU must set targets to reduce these emissions and provide a way to calculate them, along with training for cities on how to measure them. (Andrew Kennedy)

Days after the 28th United Nations Climate Change Conference (COP28) in Dubai, 50 oil and gas companies have made a general commitment to decarbonize their operations by mid-century. This is a start, but nothing like phasing out the actual emissions from burning oil and gas. And even when companies commit to reducing their operational emissions, it's hard to say what that means in practice. They are rarely transparent about their reasons for choosing a particular methodology to calculate emission reductions, or about the underlying data used. 2021 study analyzed publicly available emissions information from 52 oil and gas companies, many of which have made large emissions reduction claims. Simon Dietz of the London School of Economics and Political Science and his colleagues estimated the future emissions intensity of these companies – the rate of greenhouse gas emissions per unit of activity – and compared their trajectories to scenarios that meet the targets of the 2015 Paris climate agreement. They found that the companies they are not setting targets that are ambitious enough, nor are they reducing emissions fast enough to meet the Paris target of limiting global warming to well below 2°C above pre-industrial levels. (nature.com, editors)

In recent years, greenwashing has been a growing concern, reflected in both boardrooms and regulatory circles. With growing awareness of the global climate crisis, consumers increasingly expect companies to adapt to a more sustainable operating model. At the same time, businesses are jumping on the bandwagon of sustainable products and services, along with the risk that more will try to embellish their green efforts to get a bigger piece of the pie. With Singapore committed to net zero emissions by 2050, all stakeholders will play a key role in this green transition. However, despite the need to ensure compliance with the ever-growing labyrinth of sustainability regulations, businesses can inadvertently fall into the trap of greenwashing – intentional or unintentional – when the representation of their sustainability initiatives is unclear.

You have seen the labels: ecological, sustainable, recyclable, recycled, compostable, biologically decomposable , natural, plastic-free and more. And since you care about the planet, you probably buy products based on these claims and think you're doing the Earth a solid.

But here's the thing: they're often just words - very carefully chosen marketing words designed to make you feel good and virtuous about buying a given product. Sometimes they are legitimate. But often they are nonsense. When it's the latter, it's called greenwashing, and it's a real problem. Why? (Kristin Hostetter, outsideonline)

It is also trendy to use words such as ecological, sustainable, green, carbon neutral and other adjectives emphasizing the environmental approach to technologies and the surrounding world when describing your product. However, the incorrect and sometimes false overuse of this terminology led the European Parliament to approve the new Green Claims Directive (GCD), which aims to protect consumers from so-called greenwashing. The intention of the initiative is to precisely define the rules for the use of "green" terminology and to establish sanctions for non-compliance. (Robert Juriš, finreport)