EU cracks down on companies suspected of greenwashing

Companies throughout the EU have ten days left to justify claims about their products being ‘eco-friendly,’ or face penalties - according to a leaked draft plan addressing inflated environmental credentials across the board.

Claims about businesses’ products being ‘sustainable’ have grown in recent years, with an EU survey finding that 53% of environmental product claims were ‘vague, misleading or unfounded.’

The plan urges transparency, public disclosure of claims, and the enforcement of fines for companies that take part in misleading consumers.

The commission expects the draft law to save the equivalent of up to seven million tonnes of CO2 emissions over the next 15 years as companies who are making these claims will now be forced to follow through on them, or stop making misleading products all together.

Penalties and fines

Not only will companies face penalties and fines for greenwashing, but they also run the risk of missing out on attracting new funding from investment groups that rely on extensive, accurate ESG reporting to guide where they place their funds.  

Mark Sait, the CEO of SaveMoneyCutCarbon, comments on the impacts of greenwashing, and why businesses must make changes within to fully embrace corporate sustainability:

“Companies will soon have to prove that that they are really taking the climate action they claim to, under a new draft law by the European Union aiming to clamp down on greenwashing by requiring evidence of businesses claiming to be green.”
 
“With the label of being ‘climate neutral’ becoming a key facet of marketing and increasingly crucial within the investor sphere, many companies are falling into the murky waters of ‘greenwashing.’ Some companies claim their products are ‘climate neutral’ or ‘made with recycled materials’ when those claims are not substantiated. Not only does this hinder the nation’s goal to reach net zero by 2050, but also does irreparable damage to their own value as a company.
 
“With new laws being drafted to stamp out greenwashing across the board, businesses unsure about sustainable practices that add real change could be at risk of legal action if they continue to make claims that are unfounded.”