Communication and Transparency under the European Green Deal
Welcome back to our series on the European Green Deal and its implications for the textile industry. In our previous article, we delved into the broad impacts of the Green Deal on our sector. Today, we focus on two critical directives shaping our path forward: the Empowering Consumers Directive and the Green Claims Directive.
Understanding the Empowering Consumers and Green Claims Directives
The Empowering Consumers and Green Claims Directives are pivotal in ensuring transparency and authenticity in sustainability claims. They aim to eliminate misleading environmental claims, commonly known as greenwashing, and promote genuine sustainability efforts.
Empowering Consumers Directive:
Communication regulations are not new; they have existed since the Unfair Commercial Practices Directive of 2005 and the Consumer Rights Directive of 2011. However, due to the overwhelming abundance of sustainability claims, there was a recognized need to revise these directives. This need is being addressed through the Empowering Consumers Directive and the Green Claims Regulation.
The Empowering Consumers Directive covers generic environmental claims made at both product and corporate levels, such as labeling a product as "eco-friendly." It does not cover specific environmental claims like "this product is recyclable in 30%," which will be regulated under the Substantiating Green Claims Directive. The primary goal is to eradicate misleading voluntary claims related to sustainability and environmental matters. All claims must be substantiated with data.
Broad sustainability claims such as "sustainable" or "ethical" are banned unless they can be proven to be 100% eco-friendly with excellent environmental performance. Similarly, generic green claims like "eco-friendly" or "nature’s friend" are prohibited unless fully substantiated. Terms based on CO2 offsetting and private labels are also banned under this directive. This directive applies to all companies except microenterprises and covers product, corporate, and service claims. The Empowering Consumers Directive will enter into force in 2024, with a national transition period extending until mid-2026.
Green Claims Directive:
The Green Claims Directive specifically targets statements about a product’s environmental impact. These statements must be based on scientific evidence and state-of-the-art technical knowledge. They should demonstrate a significant improvement from a life cycle perspective and compare the product’s performance to what is considered common practice. Additionally, the directive requires identifying any other impacts a product might have, such as negative effects on ecosystems or biodiversity. Greenhouse gas emission offsets should be presented as additional information and must be assessed based on Organization Environmental Footprint (OEF) or Product Environmental Footprint (PEF).
This directive aims to prevent misleading green claims and requires rigorous substantiation. The Green Claims Directive is expected to enter into force in the first quarter of 2025, with a national transition period until 2028.
Corporate Responsibility and Due Diligence
Another critical aspect of the European Green Deal is the Corporate Sustainability Due Diligence Directive (CSDDD). This directive mandates companies to identify, prevent, and mitigate adverse environmental and human rights impacts within their supply chains. Companies must ensure their production processes are free from violations such as forced labor or environmental degradation.
Non-compliance with this directive can result in financial penalties of up to 2% of company turnover and exclusion from public procurement. This directive applies to EU companies with 5,000 or more employees and a turnover of 1,500 million EUR or more by 2027, with a phased application to smaller companies by 2029.
Enhanced Reporting with the Corporate Sustainability Reporting Directive (CSRD)
The CSRD aims to provide investors and consumers with reliable sustainability information. It significantly expands the scope and detail of sustainability reporting previously required. Companies must disclose information on their environmental, social, and governance impacts, including data on carbon emissions, resource usage, and supply chain practices.
This directive applies in stages, starting in 2024 for companies already subject to the Nonfinancial Reporting Directive, and extending to large companies and non-EU companies with subsidiaries in the EU by 2026. The directive requires an annual standardized electronic report covering all aspects of sustainability, from business models and strategies to specific indicators like intangible assets and risk assessments.
Conclusion
At Sympatex, we are committed to leading the charge in transparency and sustainability. By aligning with these directives, we aim to foster a more sustainable future for the textile industry. Stay tuned for more insights and updates as we continue to navigate the evolving landscape of the European Green Deal.
For further information, visit the official EU resources on the Empowering Consumers Directive, Green Claims Directive, Corporate Sustainability Due Diligence Directive, and Corporate Sustainability Reporting Directive. Also, we highly recommend Ohana and their brilliant work to help educate the industry.
Together, we can make a difference.
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