The EU Green Claims Directive adopted on January, 17^th 2024 affects small, medium and large businesses in the EU and abroad that are targeting the EU consumer. It defines what kind of information companies have to provide to justify their environmental marketing claims in the future. It also creates a framework and deadlines for checking evidence and approving claims and specifies what happens to companies who break the law.

Companies will be required to:

SUBSTANTIATE sustainability claims using robust, science-based and verifiable methods and life cycle assessment.

COMMUNICATE accurately, holistically, honestly and transparently.

VERIFY all environmental claims externally by an accredited verifier.

According to the adopted text, companies should submit any future environmental marketing claims for approval before using them. The claims would be assessed by EU accredited verifiers within 30 days.

SUSTAINABILITY VIA LIABILITY

The battle for sustainability via liability is explosive in various jurisdictions across Europe with a series of rulings implicating companies across industries for falling foul of fair advertising rules and the EU Green Claims law.

The EU action against 20 airlines puts the spotlight on tourism which is responsible for roughly 8% of the world’s carbon emissions and forecasted to grow at an annual 4%, thus outpacing many other economic sectors. Transportation by air, land and sea, lodging, food and shopping are the biggest contributors to tourism’s carbon footprint. The airline industry is responsible for at least 2 per cent of global CO₂ emissions and up to 5 per cent when the release of other gases and vapour is included.

EU COMMISSION IN ACTION

On April 30^th, the European Commission announced that following an alert from the European Consumer Organisation (BEUC), the European Commission and EU consumer authorities (Network of Consumer Protection Cooperation – CPC – Authorities) sent letters to 20 airlines identifying several types of potentially misleading green claims and instructing them to bring their practices in line with EU consumer law within 30 days.

According to Reuters, BEUC said it targeted the following 17 airlines in its complaint: Air Baltic, Air Dolomiti, Air France, Austrian, Brussels Airlines, Eurowings, Finnair, KLM, Lufthansa, Norwegian, Ryanair, SAS, SWISS, TAP, Volotea, Vueling and Wizz Air.

Věra Jourová, EU Commission Vice-President for Values and Transparency explained, “If we want responsible consumers, we need to provide them with accurate information. More and more travelers care about their environmental footprint and choose products and services with better environmental performance. They deserve accurate and scientific answers, not vague or false claims. The Commission is fully committed to empowering consumers in the green transition and fighting greenwashing. We expect airlines, as well as any other industry operator, to make a responsible use of environmental claims.”

A Dutch court has ruled that the flag carrier KLM had broken the law with misleading advertising in 15 of the 19 environmental statements it assessed, including claims that customers could “fly sustainably” and that the airline is moving towards a “more sustainable” future.

‘With climate litigation, you grab attention –  media attention – and, at least that is the hope, you instill fear in other companies. So, interest groups are using it to try to bring about behavioral change,” explained Branda Katan, a Professor of Corporate Litigation at Leiden Law School and a partner at Amsterdam law firm Stibbe who represented KLM in a previous Fossil Free case.

KEY ELEMENTS OF THE ACTION

The European Commission and the CPC network, have identified several types of potentially misleading practices by 20 airlines, such as:

– Creating the incorrect impression that paying an additional fee to finance climate projects with less environmental impact or to support the use of alternative aviation fuels can reduce or fully counterbalance the CO2 emissions;

– Using the term “sustainable aviation fuels” (SAF) without clearly justifying the  environmental impact of such fuels;

– Using the terms “green”, “sustainable” or “responsible” in an absolute way or use other implicit green claims;

– Claiming that the airline is moving towards net-zero greenhouse gas emissions (GHG) or any future environmental performance, without clear and verifiable commitments, targets and an independent monitoring system;

– Presenting consumers with a “calculator” for the CO2 emissions of a specific flight, without providing sufficient scientific proof on whether such calculation is reliable and without the information on the elements used for such calculation;

– Presenting consumers with a comparison of flights regarding their CO2 emissions, without providing sufficient and accurate information on the elements the comparison is based on.

NEXT STEPS

The European Commission and CPC authorities instructed the companies to provide a response within 30 days, outlining their proposed measures to address the concerns arising from their environmental marketing claims under EU consumer law. After receiving replies from the companies, the European Commission will organise meetings with the CPC network and the airlines, to discuss the solutions proposed by the companies. The Commission will monitor the implementation of the agreed-upon changes. If the airlines involved do not take the necessary steps to solve concerns raised in the letter, CPC authorities can decide to take further enforcement actions, including sanctions.

This action aims to ensure alignment of the commercial practices across the air travel sector with EU consumer legislation, by establishing the necessary substantiation and of communication of voluntary environmental claims.

BACKGROUND

The European Commission’s Proposal for a Directive on substantiation and communication of explicit environmental claims (Green Claims Directive) was proposed in March 2023 and adopted in January 2024, and provides that Member States shall ensure that traders carry out an assessment to substantiate explicit environmental claims. As regards offsetting claims in particular, traders should be transparent about what part of that claim concerns their own operations, and what part relies on buying offsets.

BE WARNED & STAY AHEAD OF THE CURVE

The increasing regulatory scrutiny on the corporate world’s environmental impact and wider crackdown on green claims in marketing should serve as a serious warning to businesses that there is zero tolerance for greenwashing, misleading, and openly lying to consumers.

For most hotels, sustainability practices are costly as they often require investments in new equipment and infrastructure. Compliance with the EU Green Claims regulation will increase costs, headaches and frustrations.

However, to be reported, investigated and found to have broken the EU Green Claims law will cost hotels much more. It will pose disastrous reputational damage, a loss in revenue, and significant sanctions including exclusion from procurements and a fine of at least 4% of annual turnover.

The NOW Force for Good Leaders Offer help hotels to stay ahead of the curve.

SUBSTANTIATE – NOW will arrange an internal audit scan of sustainability claims, efforts, risks and staff knowledge in relation to regulations to analyse gaps and identify where to save money with little or no investment. We will advise on science-based sustainability programme approved by the EU and provide training to build capacity. In tandem with carbon reduction from operations, we will provide access to high-quality carbon credits that support 3+ SDG to remove hard to abate emissions.

COMMUNICATE – NOW will help increase your communication potential by providing a Sustainability Reporting Tool to accurately, holistically, honestly transparently engage stakeholders and their support.

VERIFY – We will arrange a pre-audit preparation to ensure the hotel will pass an independent audit from an accredited verifier approved by the EU.

It must be NOW!