The role of environmental labels and claims
A higher level of awareness regarding environmental and climate issues, has led to an increased demand for sustainable products.
In this context, environmental labels and claims play an important role. They are used in environment-related advertising, product performance claims, and the implementation and visibility of products’ environmental impact.
Challenges for companies
Today, governmentally-acknowledged environmental labels, such as the EU Ecolabel, are complemented by numerous privately-owned labeling systems. Particularly due to the differentiation and competition among these systems, the number of environmental labels has steadily increased to far more than 400 different systems. The high number and competitive pressure of these labeling systems have led to a constant lowering of certification requirements to minimize the entry barrier for potential new companies and to retain existing companies in the program. Participant criteria, for example, are becoming more opened up, resulting in companies which had initially entered with high environmental standards, being increasingly equated with companies that only meet the new low minimum standards. In addition, voluntary environmentally related advertising claims, such as “carbon-neutral shipping” or “packaging made from 20 percent recycled plastic,” are not subject to minimum standards or verification, and are practically used at will. Such type of greenwashing activities (environmentally friendly designations and labels without sufficient basis), coupled with the inflation of environmental labels, leads to declining quality, lack of transparency, increasing distrust, and ultimately a loss of credibility among consumers. Therefore, as a company, it is essential to review and continuously monitor existing and desired environmental labels and claims in terms of quality, transparency, legal compliance, and public recognition.
Tackling greenwashing on EU level
In the broader context of the recast of the EU consumer rights legislation, on March 22, 2023, the European Commission published the Green Claims Directive which is complemented with the recast of the Directive on Unfair Commercial Practices. The new directives aim to address problems with environmental labels and environmental advertising claims by implementing minimum standards for environmental claims, specifying that statements must be scientifically substantiated and independently verified. In the future, only statements about the environmental impact that are applicable to the respective product will be allowed in advertising, giving consumers the ability to compare product claims. Public environmental labels will only be permitted if they are developed on EU level whereas new private environmental labels must be approved and demonstrate that they have higher certification requirements than existing labeling systems. Additionally, they must be reliable, transparent, independently verified, and subject to regular reviews.
Those requirements are not only relevant for the EU: in the United States, environmental claims must be clear, precise, unambiguous, appropriate, and substantiated by evidence. The manner in which advertising claims must be presented and the methods for substantiating them are specifically regulated based on the content of the claim (such as compostability, biodegradability, recyclability, etc.). Companies are required to provide clear information about the meaning and criteria of such labels.
Characteristics of a sustainable product
In a common sense of understanding, sustainable products should be designed to be as environmentally friendly as possible in its manufacturing, use, and disposal. In addition to having a maximum lifespan, it is characterized by being produced and recycled in a resource-efficient manner, operated or manufactured with energy efficiency, and as low in pollutants as possible. If you consider the requirements carefully, it quickly becomes clear that there is no such thing as “the sustainable product” – and thus the designation of a product as generally “sustainable” is difficult – if not impossible at all.
To grasp the environmental properties and effects of a product, a much more differentiated view is required, as well as a concrete designation of the relevant parameters, taking into account possible and actual interactions. Instruments such as life cycle assessments can provide information about these effects and enable transparent further development of the product design, taking into account its effects along the product life cycle.
New regulatory focus on product sustainability
It takes no wonder that the products´ design is the center of the latest regulatory development und the EU Green deal: the new Eco-design Directive for sustainable products (ESPR) in the EU is an important example of the current dynamics in legislation. The Eco-design Directive imposes energy-efficient and environmentally related requirements on products to minimize their ecological footprint throughout their entire life cycle. The new directive will replace the current Eco-design Directive (2009/125/EC), introduce more diverse criteria and will apply to a wider range of products. A higher level of transparency will be created in form of a digital product passport that shall be freely accessible, allowing for relevant aspects relating to sustainability and the environment – such as information on components contained, materials, chemical substances, but also information on reparability, spare parts or proper disposal of the product – to be accessed in a transparent and comparable manner.
Companies benefit from an early and careful identification of the requirements, which come with the demand for an environmentally compatible product design, and from a holistic approach with an efficient implementation, enabling the company to meet the market access requirements of the future.
NovaLoop supports in the identification and implementation of appropriate measures and strategies – from internal knowledge building and up-to-date site assessments to the integration of the supply chain. We would be happy to support you with tailor-made solutions and information on the topic of sustainability and product compliance!
