Explanatory Memorandum to COM(2023)166 - Substantiation and communication of explicit environmental claims (Green Claims Directive)

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This page contains a limited version of this dossier in the EU Monitor.

dossier COM(2023)166 - Substantiation and communication of explicit environmental claims (Green Claims Directive).
source COM(2023)166
date 22-03-2023


1. CONTEXT OF THE PROPOSAL

In March 2022 the Commission proposed to update Union consumer law to ensure that consumers are protected and to empower them to contribute actively to the green transition1. This proposal provides more specific rules (lex specialis) and complements the proposed changes to the Unfair Commercial Practices Directive2 (lex generalis). Both proposals aim at tackling a common set of problems by implementing different elements of the same preferred policy package identified in the Impact Assessment published together with the initiative on empowering consumers for the green transition3.

1.1. Reasons for and objectives of the proposal

- Role of consumers in accelerating the green transition

In the European Green Deal4 the Commission committed to ensure that consumers are empowered to make better informed choices and play an active role in the ecological transition. More specifically, the European Green Deal sets out a commitment to tackle false environmental claims by ensuring that buyers receive reliable, comparable and verifiable information to enable them to make more sustainable decisions and to reduce the risk of ‘green washing’. The need to address greenwashing was subsequently set as a priority both under the New Circular Economy Action Plan5 and the New Consumer Agenda6. The recently adopted Green Deal Industrial Plan7 reiterates the need to allow consumers to make their choices based on transparent and reliable information on the sustainability, durability and carbon footprint of the products, and highlights that market transparency is a tool facilitating uptake of technologically and environmentally superior net zero products.

The European Parliament and the Council have called on the Commission to consider further action in the area. In December 2020, in its conclusions on making the recovery circular and green8, the Council noted its appreciation of the Commission’s intention to ensure the substantiation of environmental claims on the basis of environmental impacts along products’ life cycles. In its resolution on the New Circular Economy Action Plan9, the European Parliament strongly supported the Commission’s intention to make proposals to regulate the use of environmental claims through the establishment of solid and harmonised calculation methods covering the full value chain.

Consumers want to be better informed on the environmental impacts of their consumption and make better choices. The requests of the Conference on the Future of Europe10 include a call for more transparency as regards sustainability and environmental footprint of products, in particular in Proposal 5 on sustainable consumption, packaging and production and Proposal 20 on Defining standards within and outside the EU in environmental policies. The proposal on environmental claims is the Commission’s reply to this call11.

Completing the EU legislative framework supporting more sustainable consumption will contribute to reaching the Sustainable Development Goal 12.6 to encourage companies, especially large and transnational companies, to adopt sustainable practices and to integrate sustainability information into their reporting cycle’.

Further EU action in this area will also have a positive impact on global value chains involving production processes in third countries. As a result, it will incentivise third country companies to contribute to the green transition, in particular the businesses trading within the EU internal market. Moreover, multilateral cooperation will be fostered with third countries to ensure a good understanding of the new regulatory framework and its benefits. Additionally, sustainable development chapters of the EU bilateral and region-to-region trade agreements can create opportunities for cooperation in line with the overall EU objectives to increase the sustainability dimension of its trade policy.

- Barriers to boosting the potential of green markets in the EU through consumer empowerment

In spite of consumers’ willingness to contribute to a greener and more circular economy in their everyday lives12, their active and effective role in this green transition is hampered by barriers to making environmentally sustainable consumption choices at the point of sale, notable a lack of trust in the credibility of environmental claims and the proliferation of misleading commercial practices related to the environmental sustainability of products.

The evidence collected to support the impact assessment3 accompanying the proposal on empowering consumers for the green transition, which also accompanies the proposal on environmental claims both through its inception impact assessment13 and its public consultation14 together with an additional public consultation carried out in 202015, suggests that misleading practices, such as greenwashing and lack of transparency ad credibility of environmental labels, occur at various stages of the consumption journey: during the advertising stage, the purchasing stage or during the use of the products.

a) Consumers are faced with the practice of making unclear or not well-substantiated environmental claims (‘greenwashing’)

The proposal on empowering consumers for the green transition defines an environmental claim as any message or representation, which is not mandatory under Union law or national law, including text, pictorial, graphic or symbolic representation, in any form, including labels, brand names, company names or product names, in the context of a commercial communication, which states or implies that a product or trader has a positive or no impact on the environment or is less damaging to the environment than other products or traders, respectively, or has improved their impact over time1.

The Commission carried out two inventories of environmental claims: one in 201416 and one in 202017. The studies looked at a sample of 150 environmental claims for a wide range of products against the principles of the Unfair Commercial Practices Directive2 (UCPD): clarity, unambiguity, accuracy and verifiability. The 2020 study found that a considerable share of environmental claims (53.3%) provide vague, misleading or unfounded information about products’ environmental characteristics across the EU and across a wide range of product categories. The 2020 inventory of environmental claims also analysed the substantiation of such claims looking at their clarity, accuracy, and the extent to which they are substantiated with evidence that can be verified. The analysis found that 40% of claims were unsubstantiated.

These results have also been confirmed by a sweep by the Consumer Protection Cooperation authorities carried out in November 202018. Out of the 344 sustainability claims assessed, authorities considered that in over half of the cases (57.5%), the trader did not provide sufficient elements allowing for judgement of the claim’s accuracy. In many cases, authorities had difficulties identifying whether the claim covered the whole product or only one of its components (50%), whether it referred to the company or only certain products (36%) and which stage of the products lifecycle it covered (75%)19.

Moreover, most stakeholders consulted agreed that greenwashing is a problem, with the noticeable exception of industry representatives. More than half encountered misleading claims and expressed less trust in environmental statements and logos managed by companies or private entities19. In addition, most respondents to the targeted consultations indicated that consumers lack awareness of the environmental impacts of products because the information is not provided or not available20.

In general, consumer trust in environmental claims is quite low. During the 2020 open public consultation15, the general public did not agree with the statement that they trust environmental statements on products (1.57/ 4.00)21. The level of trust was higher for claims on traders22, but still low (2.25/4.00).

b) Consumers are faced with the use of sustainability labels that are not always transparent and credible

Environmental labels are a subset of environmental claims. The labels are in a form of a trust mark, quality mark or equivalent setting apart and promoting a product/process or business with reference to its environmental aspects. These labels are sometimes based on certification schemes (environmental labelling schemes) which certify that a product/process or business meets the requirements set up by the scheme and monitor compliance.

Environmental labels existing on the EU internal market are subject to different levels of robustness, supervision and transparency, i.e., different governance models. Additional confusion is expected to be caused by an increasing number of ecolabels covering different aspects, adopting different operational approaches and being subject to different levels of scrutiny (e.g. the openness of the process in developing them or the level and independence of auditing and verification)23.

In the preparatory study to gather evidence on ways to empower consumers to play an active role in the green transition24, an assessment of 232 active ecolabels in the EU also examined their verification and certification aspects and concluded that almost half of the labels’ verification was either weak or not carried out. Moreover, consumers are not aware of the distinction between labels governed by third party certification schemes and those based on “self-certifications”, i.e. not verified by any third party.

In the consultation for the inception impact assessment24 and during the targeted consultations, the proliferation of sustainability labels and logos was also identified as an important and persistent problem across the EU by stakeholders from most stakeholder groups. Similarly, in the open public consultation, over a quarter (27%) of participants selected "the proliferation and/or lack of transparency/ understanding/reliability of sustainability logos/labels on products and services" as a relevant obstacle to empowering consumers for the green transition15.

This proliferation of labels combined with their varied governance models implies that producers and retailers can apply a variety of strategies in opting for a specific sustainability label. Very often, this also translates into companies displaying various labels to vouch for the sustainability of their products. 34% of businesses identified the 'the proliferation and/or lack of transparency / understanding / reliability of sustainability logos / labels' as an obstacle15. Indeed, companies that make the effort to adhere to or develop reliable environmental labelling schemes are disadvantaged compared to companies that use unreliable environmental labels as consumers often cannot tell the difference. This issue has been amplified by the rapid emergence of a number of (private/voluntary) labelling schemes at national / Member State level, making comparability across products increasingly difficult for consumers.

Feedback from stakeholders shows a particularly strong support for EU action capable of bringing about a common approach to the provision of sustainability information to consumers, reinforce the level-playing field for business and to limit the proliferation of labels and misleading environmental claims on the Single Market14.

Companies that offer truly sustainable products are disadvantaged compared to those that do not. They also risk unnecessarily high compliance costs as EU countries start to introduce different national solutions to address the problems described above25.

1.2. Consistency with existing policy provisions in the policy area

- The EU initiative to empower consumers for the green transition

The Unfair Commercial Practices Directive regulates misleading practices and misleading omissions with general provisions that can be applied to environmental claims in business-to-consumer transactions when they negatively affect consumers’ transactional decisions. It calls on Member States’ consumer protection authorities to assess these practices case-by-case following a transactional decision test (case-by-case assessment)26. It also establishes a blacklist of commercial practices27 that shall in all circumstances be regarded as unfair without the need for case-by-case assessment. Non-compliance with the requirements of the directive is pursued by the consumer submitting a claim or a competent authority acting on own initiative.

The proposal to amend the Unfair Commercial Practices Directive1 tackles in part the problems listed in Section 1.1 (“greenwashing” and untransparent sustainability labels). It implements a series of measures on environmental claims resulting from the preferred policy options, including:

The list of product characteristics about which a trader should not deceive a consumer in Article 6 of Directive 2005/29/EC is amended to include ‘environmental or social impact, ‘durability’ and ‘reparability’.

The list of actions which are to be considered misleading if they cause or are likely to cause the average consumers to take a transactional decision that they would not have otherwise taken, in Article 6(2) of Directive 2005/29/EC, is amended to include ‘making an environmental claim related to future environmental performance without clear, objective and verifiable commitments and targets and an independent monitoring system.

The list of commercial practices which are considered unfair in all circumstances, in Annex I of Directive 2005/29/EC, is extended to four practices associated with greenwashing:

2.

- Displaying a sustainability label which is not based on a certification scheme or not established by public authorities.


- Making a generic environmental claim for which the trader is not able to demonstrate recognised excellent environmental performance relevant to the claim.

- Making an environmental claim about the entire product when it concerns only a certain aspect of the product.

- Presenting requirements imposed by law on all products in the relevant product category on the Union market as a distinctive feature of the trader’s offer.

The proposal on empowering consumers for the green transition thus addresses a wide range of practices, products and sales methods in a more generalised way. It provides important safeguards to protect consumers from misleading environmental claims and unreliable labels.

- Other EU acts encouraging sustainable consumption by providing environmental information

On top of the consumer protection framework, there is an existing EU legislative framework that deals with the provision of environmental information, sets methodological requirements on measuring and calculating environmental impacts, such as the EU certification methodologies for carbon removals developed under the Carbon Removals Certification Regulation28 (once adopted), or on information and labels on the environmental impacts, aspects or performance of a product or trader. For instance, The Ecodesign Directive29 establishes a framework for setting mandatory ecodesign requirements for energy-related products to encourage their energy performance and circular design and foster new business models. The Commission also adopted a proposal for a new Ecodesign for Sustainable Products Regulation30 in March 2022 to significantly improve the circularity, energy performance, environmental impacts and other environmental sustainability aspects for specific priority product groups. It will enable the setting of performance and information requirements for almost all categories of physical goods placed on the EU market. Under the Circular economy action plan and product policy, some other proposals made by the Commission include information requirements, for example under the proposed Regulations on marketing of construction products31 and on batteries and waste batteries32.

In addition, there are legal acts concerning labels developed at the EU level, both mandatory and voluntary, such as the EU Ecolabel. Established in 1992, the EU Ecolabel is the official voluntary label for environmental excellence of products in the EU demonstrating top performance. The EU Ecolabel Regulation33 lays down rules for the establishment and application of this voluntary scheme. Other related EU legislation on labels include the Eco-Management and Audit Scheme (EMAS)34, the Regulations on the organic farming label35, the energy labelling36 and the CE marking37.

- Completing the set of EU rules on environmental claims

To continue to address the identified problem of greenwashing and unreliable environmental labels, the current framework could benefit from more specific requirements on unregulated claims, be it for specific product groups, specific sectors or for specific environmental impacts or environmental aspects. This proposal on substantiating and communicating environmental claims complements as lex specialis the existing set of EU rules on consumer protection. The proposal will allow to implement fully the preferred policy options identified in the impact assessment, as described in Section 3.2.

3.

The key objectives of the proposal on environmental claims are thus to:


- Increase the level of environmental protection and contribute to accelerating the green transition towards a circular, clean and climate neutral economy in the EU;

- Protect consumers and companies from greenwashing and enable consumers to contribute to accelerating the green transition by making informed purchasing decisions based on credible environmental claims and labels;

- Improve the legal certainty as regards environmental claims and the level playing fields on the internal market, boost the competitiveness of economic operators that make efforts to increase the environmental sustainability of their products and activities, and create cost saving opportunities for such operators that are trading across borders.

The scope of this proposal, being lex specialis, is aligned with the corresponding lex generalis. The revised Unfair Commercial Practices Directive covers all voluntary business-to-consumer commercial practices before, during and after a commercial transaction in relation to a product. The scope of this proposal covers the substantiation and communication of voluntary environmental claims.

In the same way, the proposal on empowering consumers for the green transition deals with sustainability labels which cover environmental or social aspects or both. This proposal is however limited to environmental labels only, i.e. those covering predominantly environmental aspects of a product or trader.

As mentioned, the proposal on environmental claims is meant to act as a safety net for all sectors where environmental claims or labels are unregulated at EU level. It does not aim to change existing or future sectoral rules. To the contrary, the assessment and communication requirements set out in other Union legislation will take precedence over the requirements set out in the proposal, and thus should be used to substantiate and communicate environmental claims in these specific areas.

1.3. Consistency with other Union policies

The proposal on environmental claims supports the objectives of the European Green Deal and contributes to resolving the triple crises of climate change, pollution, and biodiversity loss. It contributes to the fight against greenwashing that was identified as a priority in the Commission’s new circular economy action plan5 and new consumer agenda6. the proposal will also reinforce overarching strategies such as the zero pollution action plan38 or the biodiversity strategy for 203039 and complement strategies targeting specific sectors, such as the Farm-to-Fork strategy40, or issues, such as the calls for improving water efficiency and reuse in the EU strategy on adaptation to climate change41.

As described, this proposal for a directive on environmental claims and the proposal amending the Unfair Commercial Practices Directive jointly establish a coherent policy framework to help the Union in the green transition by transforming consumption patterns in a more sustainable direction. They aim to contribute to a greener internal market by encouraging the reduction of the environmental footprint of products consumed in the Union. They will also contribute to reaching the objective of the European Climate Law of balancing greenhouse gas (GHG) emissions and removals within the Union at the latest by 2050 by tackling claims related to GHG emissions reductions and climate neutrality.

2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY

2.1 Legal basis

This proposal is based on Article 114 of the Treaty of the Functioning of the European Union (TFEU), which applies to measures that aim to establish or ensure the functioning of the internal market, while taking as a base a high level of environmental protection.

Different requirements imposed by national legislation or private initiatives regulating environmental claims create an unnecessary burden for companies when trading cross-border, as they need to comply with different requirements in each country. This affects their capacity to operate in and take advantage of the internal market. At the same time, market participants have difficulties with identifying reliable environmental claims and making optimal purchasing decisions on the internal market.

The proposal therefore aims to ensure the functioning of the internal market for economic actors operating in the internal market and consumers relying on environmental claims. The measures proposed in this Directive will increase the level of environmental protection, while leading to further harmonisation regarding the regulation of environmental claims, and would avoid market fragmentation due to diverging national approaches that were introduced or would be introduced in the absence of rules at EU level.

The internal market dimension of reaching the environmental objective is predominant and therefore Article 114 remains the appropriate legal basis.

2.2 Subsidiarity (for non-exclusive competence)

Putting in place a common set of rules within the EU internal market is essential to ensuring a level playing field for economic operators, If Member States act individually, the level of environmental protection would remain suboptimal and there is a risk that competing different systems, based on different methods and approaches, would be used.

The proposal on empowering consumers for the green transition does not specify what the companies should do to properly substantiate their environmental claims. This in turn can lead to significantly diverging approaches across the EU to substantiate claims. This would fragment the internal market by distorting the conditions of competition and necessitating the amendment/modifications of the claims each time internal borders are crossed. This in turn brings legal uncertainty and raises compliance costs as well as unfair competition in the Single Market and undermines efficient market functioning.

The EU is well placed to promote further harmonisation of methodological requirements to assess the environmental impacts of products, services and organisations across the Single Market, relying on experiences of Member States and private initiatives in this area. The EU can bring an important added value, and further co-ordination would bring cost savings for governments and the private sector.

Feedback from stakeholders shows a particularly strong support for EU action capable of bringing about a common approach to the provision of sustainability information to consumers and to limit the proliferation of labels and misleading environmental claims. If Member States were to act individually and without a guiding framework, there is a high risk to end up with many competing different systems leading to a fragmented internal market, especially for cross-border services (for instance, digital services).

EU action is justified and necessary, because a harmonised and well-functioning internal EU market with regards to environmental claims would increase the level of environmental protection and set a level playing field for businesses operating in the EU. The proposal also alleviates the difficulties faced by national authorities in enforcing the existing principle-based provisions of the Unfair Commercial Practices Directive in such complex areas as misleading environmental claims. Further EU coordination brings cost savings for both governments and private actors involved, as well as strengthens leverage on related global processes, including global value chains.

2.3 Proportionality

The measures in the proposal do not go beyond what is necessary to enable consumers to make informed purchasing decisions and promoting sustainable consumption, based on reliable and verified information.

The proportionality of the general criteria for environmental claims used in marketing towards consumers is ensured by introducing uniform requirements which companies should follow when making such claims. This proposal does not require any specific assessment method for the substantiation of any particular environmental claims and relies upon general requirements that generate reliable information for consumers. The proposal will also provide competent national bodies with uniform criteria. This will help them assess the fairness of any environmental claim, providing a high degree of legal certainty and facilitating enforcement activities. It is also the result of thorough consideration of stakeholder input, in particular from businesses, including SMEs.

The proportionality of requirements on environmental labels concerns the fairness of their display in marketing to consumers. There are only a limited number of uniform requirements to ensure the transparency and credibility of such labels towards users. These uniform requirements ensure that entities running environmental labels, as well as the companies applying for those labels, do not face disproportionate costs. At the same time, it will ensure a high degree of legal certainty for companies. By providing competent national bodies with uniform criteria to assess the fairness of the use of any environmental label, this measure will also facilitate enforcement activities and pursue a high level of consumer protection.

2.4 Choice of the instrument

The proposal is a stand-alone legal instrument that would not amend existing legislation. It sets a framework for the substantiation of voluntary environmental claims. Given that it aims to ensure consumer protection in an area regulated by Directives, such legal form fits better the existing Union and national legal framework and the enforcement mechanisms established by the Member States. It is therefore considered that the most appropriate instrument is a Directive.

3. Results of stakeholders consultations & impact assessment, compliance with better regulation principles & fundamental rights

3.1. Stakeholder consultations

Contents

1.

In the preparatory process of this proposal, the Commission consulted stakeholders via:


- Several public consultations in the context of the proposal on empowering consumers for the green transition15,1.

- A public consultation on the product policy framework for the circular economy, with a section dedicated to potential future policy options based on the Environmental Footprint methods (from 29 November 2018 to 24 January 2019)2. Out of the 291 respondents, some indicated that companies should be able to freely choose how to generate environmental information, provided that they meet minimum criteria to avoid greenwashing. Respondents also highlighted the need for flexibility regarding the medium of communication: it should not be mandatory to use a label or QR code to provide information, as the type of information and level of detail may depend on the target audience. The respondents also highlighted the need to offer an SME tool or support from the European Commission for implementation.

- Online targeted consultations that involved key stakeholders related to the Environmental Footprint methods (from12 November 2018 to 18 December 2018) with 124 respondents 3.

- An open public consultation on the green claims initiative, between 27 August and 3 December 2020, through which 362 contributions were made16.

- Some business associations suggested the use of independent certification/verification organizations that operate in accordance with ISO14025.

- Large companies highlighted that the EU framework should allow for flexibility regarding the medium of communication used to make claims.

- Environmental NGOs expressed that single environmental scores should, by no means, be a way to hide trade-offs, and should be avoided.

- Consumer NGOs also indicated that environmental claims could be substantiated by existing tools such as the type 1 ecolabels, Eco Lighthouse, EMAS and ISO14001.

- A few public authorities’ representatives thought it should be possible to substantiate claims with ‘official’ ecolabels such as the Nordic Swan and EU Ecolabel. Public administrations slightly prefer independent certification and verification.

- As for citizens, independent certification/verification by accredited organisations is the preferred option.

A stakeholder workshop with several sessions in November 2020 dedicated to overall feedback, feedback on communication options, on practical challenges for companies in substantiating environmental claims, on the reliability of information and on implications for ecolabels; with on average 200 stakeholders participated per session4. The workshops confirmed that greenwashing needs to be addressed and that there is the need for a harmonised EU-level approach. Several stakeholders indicated the need to continue using the EU Ecolabel and other reliable type I ecolabels.

3.2 Impact assessment

3.2.1 Problem definition & preferred policy option

This proposal is based on the impact assessment published together with the Commission proposal for empowering consumers for the green transition5. The Commission’s Regulatory Scrutiny Board (RSB) first issued a negative opinion with comprehensive comments on 5 February 2021. After a significant revision of the initial draft, the RSB provided a positive opinion with further comments on 17 September 20216. Annex I of the impact assessment explains how the RSB comments were addressed.

The impact assessment identifies two problems divided into a number of sub-problems. This proposal focusses on one the two problems and two of its sub-problems.

Problem 2: Consumers face misleading commercial practices related to the sustainability of products.

Sub-Problem 2.2: Consumers are faced with unclear or poorly-substantiated environmental claims (‘greenwashing’) from companies.

Sub-problem 2.3: Consumers are faced with sustainability labels that are not always transparent or credible7.

A number of policy options were considered for each individual sub-problem. The Unfair Commercial Practices Directive and its amendment are designed to act as lex generalis. As such, it was decided that some of the elements of the preferred policy options selected in the impact assessment to tackle sub-problem 2.2 and sub-problem 2.3 would not be implemented via the initiative on Empowering consumers for the green transition but via dedicated and complementary lex specialis, a proposal on environmental claims.

On the basis of a multi-criteria analysis, complemented by a cost-benefit analysis, and a qualitative assessment of the proportionality of the various options considered, a combination of two preferred policy options8 were proposed to address these problems:

(1) Prohibition of environmental claims that do not fulfil a minimum set of criteria9 (to address sub-problem 2.2)

The preferred option would ensure consumers are protected from greenwashing, since a certain standard will need to be met by those making such claims. It would also facilitate enforcement by consumer protection authorities.

(2) Prohibition of sustainability labels not meeting minimum transparency and credibility requirements10 (to address sub-problem 2.3)

The preferred option would ensure consumers are protected from being misled by such labels and tools.

Furthermore, in the course of the preparation of this initiative, the following additional measures were identified to increase the effectiveness and efficiency of the EU rules on environmental claims:

- establishment of a verification mechanism to facilitate the implementation and enforcement of ensuring that minimum criteria on substantiation of claims are respected, that a level playing field on the EU market is created, and that companies operating on the single market have more legal certainty and less burdens;

- use of aggregated scores on environmental impacts to be limited to environmental claims, including labels, established at EU level only with the aim to ensure implementation of the lessons learned from the work on a common standardised method at EU level (see box below);

- the possibility to exclude microenterprises from the requirements on substantiation and linked rules on communication to avoid disproportionate impacts on the smallest traders;

- to effectively limit the proliferation of environmental labels and focus efforts on increasing the take-up of existing public schemes and on developing EU level labelling requirements for the single market,

4.

- the creation of new private schemes should be approved by Member States only and if they provide added value, and


- the creation of new public schemes at the national or regional level should be prohibited. New public schemes should be developed at the EU level only.


Lessons learnt from the work on a standard methodology to substantiate claims on environmental impacts

When initially preparing for an initiative on green claims, the European Commission launched work and consultations on the option of using a standard methodology to substantiate environmental claims. The scope of this work focused on the use of EU product and organisation environmental footprint methods to substantiate environmental claims. Depending on product category, these methods11 allow to measure the environmental performance of a product or organisation throughout the value chain, from the extraction of raw materials to the end of life. The environmental footprint methods aim to provide robust and prominent methodologies developed in full transparency with stakeholders and based on scientific evidence.

In the preparatory work the Commission considered as one of these options to establish an EU legal framework requiring companies making claims related to the impacts covered by the environmental footprint methods12 to substantiate them via those methods. However, even if the environmental footprint methods are helpful to businesses to identify the areas where they should improve their environmental impact and performance, and can adequately substantiate certain claims on several product categories, the methods do not yet cover all relevant impact categories for all product types (e.g. as regards marine fisheries – the sustainability of the targeted fish stock; as regards food and agricultural products – farm level biodiversity and nature protection, as well as different farming practices, as regards textiles- microplastics release) and may therefore give an incomplete picture of the environmental credentials of a product in the green claims context. In addition, many environmental claims are also made on environmental aspects (e.g. durability, reusability, reparability, recyclability, recycled content, use of natural content) for which the environmental footprint methods are not suited to serve as the only method for substantiation. Addressing the very wide and fast changing area of environmental claims by means of a single method has its limitations. Prescribing a single method like the environmental footprint as the standard methodology of substantiation for all environmental claims would not be appropriate and pose a risk for companies not being able to communicate on relevant environmental aspects or performance in relation to their products or activities.

For these reasons and based on the results of the consultation, an internal assessment of the implications in terms of burden to companies and further exchanges with stakeholders, the option of using one standard methodology to substantiate environmental claims was not pursued. Instead, a more flexible approach based on the preferred policy option from the impact assessment developed for the initiative on empowering consumers for the green transition was considered appropriate.

3.2.2. Impacts of the preferred policy option

The preferred policy option resulting from the cost-benefit analysis of the impact assessment has been translated in several provisions both in the proposal on empowering consumers for the green transition and the proposal on environmental claims. The impacts listed below concern the preferred policy option as a whole and thus encompass provisions from both proposals.

The proposal includes measures that are relevant for the Commission's ‘one in one out’ approach to reduce administrative burden and were previously reported and accounted for in the impact assessment accompanying the proposal on empowering consumers for the green transition.

- Expected impacts of the set scope

The proposal introduces minimum requirements on substantiation and communication of environmental claims which are subject to third party verification to be delivered prior to the claim being used in commercial communications. While this measure is expected to eliminate misleading or false claims and will help to ensure proper enforcement, it will put an additional cost on traders wishing to make such claims. The impact on smaller enterprises is expected to be proportionately higher than on larger companies. For this reason, and to ensure that the smallest companies (e.g. small family farms selling directly to consumers) are not disproportionately affected by this additional administrative cost, the proposal exempts microenterprises (fewer than 10 employees and annual turnover does not exceed EUR 2 million13) from the obligations of this proposal as regards substantiation and communication requirements linked to substantiation assessment. However, in case these smallest companies nevertheless wish to receive a certificate of conformity of the environmental claim that is recognised across the Union they should comply with all requirements of this proposal.

All traders, however, including the smallest companies, remain within the scope of the Unfair Commercial Practices Directive. This means that its general rules on environmental claims will still apply, and the consumers affected by unfair commercial practices will still be able to table complaints to the competent authorities and seek redress in national and EU courts.

Moreover, the proposal also asks of Member States to take the appropriate measures to help small and medium-sized enterprises apply the requirements of the proposal. With facilitated access to measures such as financial support and organisational and technical assistance, it is expected that these companies will be encouraged to be part of the green transition.

- Expected impacts of the requirements on substantiation of claims

By forbidding claims that do not meet the minimum criteria, this measure will contribute to improving the reliability of the information provided to consumers and therefore will have a positive impact on the decision making of consumers facilitating the choice of products offering better environmental performance, and thus an increased consumer welfare. With certain consumers purchasing products that will be trully better for the environment, it is estimated that the impacts on the environment will be highly positive..

In terms of impacts on businesses, claims that do not meet these minimum criteria will have to be removed. The removal of the claims will require adjustments to product packages, flyers, etc., but this will be a one-off adjustment cost14.

In addition, businesses will have to bear the cost of substantiation of claims. This cost will depend to a large extent on the type of environmental claim the company voluntarily wishes to make and for how many products. Claims regarding environmental impact of a product along the life-cycle (e.g. reduction of GHG emissions across the life-cycle and value chain) will require a significantly higher investment than claims focusing on a specific environmental aspect (e.g. recycled content in the packaging). Depending on the nature and complexity of the claim, the related substantiation cost can vary significantly. For example, substantiation costs for a simple claim, e.g. on materials used in production, are estimated at EUR 50015. If a company decides, for instance, to make a claim on the environmental footprint of one of their products and choses to conduct a study using the product environmental footprint method, it would cost around EUR 8 000 (this can decrease to EUR 4000 in case a product environmental footprint category rules exists). If the chosen claim concerns, e.g., the footprint of the organisation itself, using the organisation environmental footrpint methods to substantiate the claim can amount to EUR 54 000 (in case sectoral rules do not exist)16.

However, it remains a decision of companies to include (or not) environmental claims in their voluntary commercial communications. This means that the companies can control their costs by determining the scope of the claim (if any) considering its expected return on investment. In short, the costs of substantiation are of a voluntary nature to companies as they are part of one’s marketing strategy and therefore credible estimations of the overall cost for the Union market are difficult.

When it comes to enforcement costs and other costs, the competent authorities will need to assess to what extent the specific claim complies with the criteria set out under this option, i.e. if the company making the claim holds a certificate of conformity delivered by an accredited verifier. However a number of the interviewed consumer protection authorities indicated that the option might lead to savings as it will mean that less resources are needed to substantiate their assessment of “greenwashing”.

- Expected impacts of the requirements on communication of claims

It is expected that the rules on communication will result in clearer and more transparent claims and thus will increase consumer welfare. In terms of costs to businesses, once the assessment to substantiate the claim is in place, the additional cost of complying with the communication requirements will be negligible and will mostly be embedded in the cost of substantiation.

- Expected impacts of the requirements on labelling schemes

The introduction of minimum criteria for all environmental labels will increase the transparency and credibility of labels (and slow down or even reverse the current proliferation of these labels) and will enhance the quality of consumer decision-making. Consumers will be assured that the products holding a sustainability label will meet minimum requirement on transparency and credibility, improving consumer trust and understanding of the labels. These additional requirements on governance of the labelling schemes are expected to reduce the number of labels, as schemes that are not robust will be weaned out. It is to be noted that the conditions for joining environmental labelling schemes for small and medium sized enterprises are proportionate to the size and turnover of the companies.

The introduction of minimum criteria for assessing the fairness of sustainability labels, as envisaged under option 2.3.B, is expected to increase consumer welfare. When it comes to impacts on businesses this measure is expected to contribute to a level-playing field between products displaying labels as all will have to adhere to the same minimum criteria. Furthermore, it will also contribute to a level playing field between organisations running labels.

In addition, this measure is expected to contribute to reducing the barriers to cross-border trade by avoiding non-harmonised national approaches by the Member States concerned with the proliferation of labels/logos that are non-transparent or not credible. This will decrease legal uncertainty and costs to companies as they will have to adhere to similar rules within the internal market.

Some administrative costs are expected for the entities running and managing the labels/logos17. They will also have substantive compliance costs resulting from implementing the necessary changes in their internal processes, including carrying out third party certifications for each application (if they are not doing it already at the baseline). The costs incurred by the entities running and managing the labels, as quantified in the impact assessment, will be passed on to the manufacturers and sellers applying for the label.

As for indirect costs, the costs of applying for labels are expected to increase. On the other hand, the increased harmonisation might reduce the need to apply for several labels.

Enforcement costs for public administration estimated in the impact assessment are not expected to be significant since the proposed minimum criteria require all relevant information to be provided online and the labels require 3rd party verification.

Further measures on labelling, developed additionally to the impact assessment, will provide a strong support to the achievement of the objective to stop proliferation of environmental labelling schemes across the EU and improve the functioning of the Internal Market. By putting a halt on new public schemes, regional and national authorities will be prevented from developing labels and labelling schemes that will have to be reviewed or abandoned soon after the introduction of an equivalent label at the EU level. The period between the adoption of this measure and its implementation will provide time for planning and prevent those additional costs for public authorities. Developing labels at the EU level for the same product groups will also ensure a more efficient use of resources than if these were developed at the national level.

The uncontrolled establishment of new labelling schemes developed by private operators will also be reduced. Member State authorities will have to validate the development of such schemes based on their added value. This is expected to contribute to the reduction of the proliferation of schemes. The administrative cost for public authorities for developing and implementing the validation procedure is difficult to estimate because there is no certainty as to the possible number of applications. This measure is expected to incur an administrative cost for companies in submitting the information accompanying their request to Member State authorities to develop a private labelling scheme. This administrative cost has not yet been reported and is relevant for the ‘one in one out’ approach to reduce administrative burden. However, the costs are not expected to be significant, as the number of such submissions is expected to be relatively low due to an advance notice of limitations on establishment of such schemes resulting from the delay between the date this proposal is made and the date of transposition (expected to be around 4 years).

Limiting the possibility for labels to present a rating or score based on an aggregated indicator of environmental impacts to only those developed at the EU level aims at reducing consumer confusion and misinformation as well as overall proliferation of labels. There is a risk that the nature of an aggregate indicator could be used to dilute negative impacts of certain parameters of the product with more positive impacts of other parameters and transmit misleading information to the consumer regarding the actual main impacts of the product. It is essential to stop potential schemes with aggregate scoring at regional or national scale to ensure harmonisation in the internal market. Moreover, such labels are usually based on different methodologies for the same product group, which may result in the same product receiving different rating depending on the scheme.

- Expected impacts of the ex-ante verification

The ex-ante verification carried out by independent accredited bodies will facilitate and support the enforcement of the proposal’s requirements without putting an excessive strain on the competent authorities’ resources. The certificate of conformity allows the local competent authorities to easily check the reliability of a claim on the market. The complaints against claims for which a valid certificate of conformity exists could be handled quicker contributing to cost savings of enforcement as compared to business as usual.

Companies making environmental claims would benefit from the process of certification of claims because the certificate of conformity recognised across the EU would provide legal certainty and would require only one certification within the EU making the process of certification cheaper and easier for entities trading within the internal market.

As for administrative costs for companies, they would need to submit an ex-ante request to a ‘verifier’ for a certificate of conformity before making an environmental claim. This administrative cost will depend on the scope of every voluntary claim made and the expected quantities of claims, making the overall cost for the Union market difficult to estimate in a credible manner. For this reason this cost has not yet been reported while it is relevant for the ‘one in one out’ approach to reduce administrative burden.

- Expected progress towards relevant sustainable development goals

Regarding SDG 12 ensuring sustainable consumption and production patterns, the implementation of the preferred policy option in this proposal and in the proposal empowering consumers for the green transition is expected to lead to an increase in the purchase of products which do not deceive the consumer as to their environmental impact. The initiatives are expected to better protect consumers against unfair commercial practices such as greenwashing or non-transparent voluntary sustainability labels, which are not compatible with the green transition. As for SDG 13 on climate action, the initiatives are expected to lead to a saving of 5 – 7 MtCO2e over a period of 15 years18.

3.3. Regulatory fitness and simplification

The proposal is a new initiative aiming to complement the general consumer law directives and specifically, as lex specialis, the proposal on empowering consumers for the green transition. The proposal aims directly at reducing regulatory burdens by strengthening the functioning of the internal market for green products and companies and by setting minimum criteria on environmental claims. It will reduce the risk of legal fragmentation of the single market and increase legal certainty. This, in turn, is expected to result in cost savings for businesses willing to make such claims and for competent authorities responsible for the enforcement of consumer law. Moreover, the proposal foresees a review clause six years after entry into force to assess if the directive achieved its objectives, and whether further harmonisation is needed as regards substantiation and communication of environmental claims to achieve these objectives in a more efficient manner. The proposal concerns environmental claims made in both the physical and digital environments and is thus considered digital-ready.

3.4. Fundamental rights

The proposal is in accordance with Article 38 of the Charter of Fundamental Rights, according to which the EU must ensure a high level of consumer protection. This will be ensured by ensuring the reliability, comparability and verifiability of environmental claims and by addressing greenwashing and the use of unreliable and non-transparent environmental claims and labels. The proposal will also enhance the right to a high level of environmental protection and the improvement of the quality of the environment, as enshrined in Article 37 of the Charter. In addition, by fighting greenwashing, the proposal will ensure a level playing field for businesses when marketing their greenness and therefore guarantees the freedom to conduct a business in accordance with Union law and national laws and practices.

4. BUDGETARY IMPLICATIONS

The initiative involves a budget of a total of approx. EUR 25 million until 2027 (i.e. under the current MFF).

As detailed in the Legislative financial statement, the initiative foresees human resources and administrative expenditure to implement the Directive and prepare delegated and implementing acts.

It also foresees appropriations which will be fully financed through redeployment within the LIFE programme envelope. As detailed in the tables included in Section 3 of the Legislative Financial Statement, this amount covers the acquisition of environmental footprint and other required datasets to support companies, especially SMEs, in complying with the proposal on environmental claims. Indeed, public access to this information for SMEs, larger companies, public agencies and all interested parties will help reduce costs for developing and strengthening their own methodologies and potentially help decreasing the costs for the users of the developed methodologies. The access to environmental footprint datasets will also support the implementation of other EU policies on environmental sustainability and helping consumers to make the right choices, such as the proposal for Ecodesign for Sustainable Products Regulation (ESPR). The ESPR introduces the possibility to set mandatory information requirements, which may also be linked with labelling requirements, and will result in improved information flows through Digital Product Passports. The EF datasets will support the calculation and setting of information and performance requirements in delegated acts linked to the ESPR, e.g. related to carbon and environmental footprint, based on a harmonised set of high-quality secondary data. Together those data and evidence-based policies will lead to a better-informed consumer that can trust the environmental information provided by companies.

5. OTHER ELEMENTS – implementation plans & monitoring, evaluation & reporting arrangement

The Commission will submit a report, assessing the achievement of objectives of this Directive, to the European Parliament and Council no later than six years after its adoption. Member States are to regularly monitor the application of this Directive based on an overview of environmental claims that have been notified to the enforcement authorities. Member States are to supply this information to the Commission on an annual basis. The European Environment Agency is to publish a bi-annual report with its assessment of the evolution of environmental claims and labelling schemes in each Member State.

6. Detailed explanation of the specific provisions of the proposal

6.1. Scope of the proposal

Article 1 sets the scope. The proposal sets minimum requirements on the substantiation and communication of voluntary environmental claims and environmental labelling in business-to-consumer commercial practices, without any prejudice to other Union legislation setting out conditions on environmental claims as regards certain products or sectors (as described in Section 1.2).

6.2. Requirements on substantiation of environmental claims

Article 3 of the proposal focuses on elements that have not been integrated to the consumer protection legislation, notably as regards the substantiation of claims, and in some instances provides additional clarifications. The proposal requires that the substantiation of explicit environmental claims shall be based on an assessment that meets the selected minimum criteria to prevent claims from being misleading, namely that the underpinning assessment:

- relies on recognised scientific evidence and state of the art technical knowledge;

- demonstrates the significance of impacts, aspects and performance from a life-cycle perspective;

- takes into account all significant aspects and impacts to assess the performance;

- demonstrates whether the claim is accurate for the whole product or only for parts of it (for the whole life cycle or only for certain stages, for all the trader’s activities or only a part of them);

- demonstrates that the claim is not equivalent to requirements imposed by law;

- provides information on whether the product performs environmentally significantly better than what is common practice;

- identifies whether a positive achievement leads to significant worsening of another impact;

- requires greenhouse gas offsets to be reported in a transparent manner;

- includes accurate primary or secondary information.

Microenterprises (fewer than 10 employees and with an annual turnover not exceeding EUR 2 million1) are exempted from the requirements of this article unless they wish to receive a certificate of conformity of the environmental claim in which case they will have to comply with these requirements.

In addition, Article 4 sets out further requirements for comparative claims (i.e. claims that state or imply that a product or trader has less or more environmental impacts or performs better or worse regarding environmental aspects than other products or traders). These requirements are:

- the use of equivalent information for the assessment of environmental impacts, aspects or performance of compared products;

- the use of data generated or sourced in an equivalent manner for the products or traders that are subject to comparisons;

- the coverage of stages along the value chain is equivalent for the products and traders compared while ensuring that the most significant stages are taken into account for products and traders compared;

- the coverage of environmental impacts, aspects or performances is equivalent for the products and traders compared and ensures that those most significant are taken into account for all products and traders compared;

- the assumptions used for the comparison are set consistent for the products and traders compared.

- for comparative claims on improvement of impacts (compared to earlier version of product) include explaining the impact of improvement on other aspects and impacts and stating the baseline year.

Different types of claims will require different levels of substantiation. The proposal does not prescribe a single method and does not require conducting a full life-cycle analysis for each type of a claim. The assessment used to substantiate explicit environmental claims need to consider the life-cycle of the product or of the overall activities of the trader in order to identify the relevant impacts which are subject to the claims, and to enable the trader to avoid omissions of any relevant aspects. This is also necessary to check if the benefits claimed result in a transfer of impacts to other stages of the life cycle or to significant increase of other environmental impacts.

For the assessment to be considered robust, it should include primary, company-specific data, for relevant aspects contributing significantly to the environmental performance of the product or trader referred to in the claim. Consumer protection authorities in some countries are starting to question product specific environmental claims if no primary data has been used in the substantiation. The right balance should be found between ensuring relevant and robust information for substantiating claims and the efforts needed to gather primary information considering the accessibility of primary information. The requirement to include primary information should consider how much influence the trader making the claim has over the respective process, and if primary information is available. The requirement should also consider if the processes are run by the trader making the claim and, in the case, where they are not, if the trader has access to primary information on the process. Moreover, if the process is not run by the trader making the claim and if primary information is not available, the use of secondary information should be permitted, even for processes that contribute significantly to the environmental performance of the product or trader. In any case, both primary and secondary, i.e., average data, should show a high level of quality and accuracy.

It is deemed appropriate to address climate-related claims based on offsets in a more transparent manner. Therefore, the proposal requires, for climate-related claims, to report separately from greenhouse gas emissions any greenhouse gas emissions offsets used by the traders, as additional environmental information, which is also the approach followed by the product environmental footprint/organisation environmental footprint methods. In addition, this information should also specify whether these offsets relate to emission reductions or removals and ensure that the offsets relied upon are of high integrity and accounted for correctly to coherently and transparently reflect the claimed impact on climate.

Microenterprises are exempted from the requirements of this article unless they wish to receive a certificate of conformity of the environmental claim in which case they will have to comply with these requirements.

The Commission should be empowered to adopt delegated acts to complement the requirements on substantiation for certain types of claims. These delegated acts should in principle follow the results of monitoring of evolution of environmental claims on the market to allow prioritising claims that are prone to misleading consumers. However, for some types of claims it may be necessary for the Commission to act prior to that.

6.3. Requirements on communication of environmental claims

The provisions of Article 5 respond to the problem of lack of reliable information on product’s environmental characteristics2 for those traders who make an environmental claim. These requirements also support the aim of ensuring that environmental claims are made on products or traders that offer environmental benefits as compared to common practice.

5.

Notably, the proposal sets out that, when communicated, all claims:


- shall only cover environmental impacts, aspects or performance that are assessed in accordance with the substantiation requirements laid down in this proposal and are identified as significant for the respective product or trader;

- where relevant for the claim made, shall include information on how consumers may appropriately use the product to decrease environmental impacts;

- shall be accompanied by information on the substantiation (including information on product or activities of trader; aspects, impacts or performance covered by the claim; other recognised international standards, where relevant; underlying studies and calculations; how improvements that are subject to the claim are achieved; the certificate of conformity and coordinates of the verifier).

Microenterprises are exempted from the requirements of this article as regards provision of information on substantiation unless they wish to receive a certificate of conformity of the environmental claim in which case they will have to comply with these requirements.

The Commission should be empowered to adopt delegated acts to complement the requirements on communication for certain types of claims in case this is necessary to complement the supplementary rules on substantiation adopted under Article 3. Furthermore, Article 6 states that comparative claims on the improvement of an environmental impact of a product as compared to another product of the same trader, or that the trader no longer sells to consumers, shall be based on evidence that improvement is significant and achieved in the last five years.

6.4. Provisions on environmental labels and labelling schemes

These requirements should be seen as complementary to the requirements on displaying a sustainability label set out in the proposal on empowering consumers for the green transition and the Commission guidance on interpretation and application of the Unfair Commercial Practices Directive3.

On top of requirements on substantiation and communication applicable to all types of claims, this proposal builds on the requirements of the proposal on empowering consumers4 banning labels based on self-certification5, and provides additional safeguards to improve the quality of ecolabelling schemes by requiring the following transparency and credibility requirements (as per policy option from the impact assessment).

Article 7 ensures labels fulfil the requirements already set out in previous articles and subject labels to the verification in accordance with Article 11.

The proliferation of environmental labels and the ensuing consumer confusion, market fragmentation and increased burden from complying with requirements in different Member States necessitate ambitious measures that benefit both consumers and businesses. Therefore, in the course of the decision making process it was considered appropriate that the proposal on environmental claims foresees additional provisions to target proliferation of labels, beyond those assessed in the impact assessment accompanying this proposal and the proposal Empowering consumers for the green transition, notably the prohibition of labels presenting a rating or score based on an aggregated indicator representing cumulative environmental impacts unless these are established at the EU level.

Article 8 further details requirements for environmental labelling schemes. These requirements are relatively similar to the governance criteria of a number of well-known and reputable public and private sustainability labelling schemes, and include as follows:

- requirements on transparency and accessibility of information on ownership, decision-making body and objectives,

- the criteria underlying the award of labels are developed by experts and reviewed by stakeholders;

- the existence of complaint and resolution mechanism;

- procedures for dealing with non-compliance and possibility of withdrawal or suspension of labelling in case of persistent and flagrant non-compliance.

For the same reasons listed above on the proliferation of environmental labels and the ensuing consumer confusion, Article 8 also introduces additional provisions to target the proliferation of labelling schemes, notably:

- prohibition of establishment of new national or regional publicly owned schemes ;

- a validation procedure for new schemes established by private operators from the EU and third countries that should be assessed by national authorities and validated only if they demonstrate added value in terms of their environmental ambition, their coverage of environmental impacts, of product category group or sector and their ability to support the green transition of SMEs as compared to the existing Union, national or regional schemes.

New public schemes from third countries wishing to operate on the Union market have to meet the requirements of this proposal and shall be subject to prior notification and approval by the Commission with the aim of ensuring that these schemes provide added value in terms of environmental ambition, coverage of environmental impacts, product groups or sectors.

Article 9 sets the requirements for the review of environmental claims by traders.

6.5. Ex-ante verification of environmental claims and labelling schemes

Article 10 details how the substantiation and communication of environmental claims and labels will have to be 3rd party verified and certified to comply with the requirements of the Directive before the claim is used in a commercial communication. An officially accredited body (the ‘verifier’) will carry out this ex-ante verification of claims submitted by the company wishing to use it. This measure will ensure every claim that the consumer will be exposed to had been verified to be reliable and trustworthy. The proposal also defines detailed requirements for ‘verifiers’ to fulfil in order to be accredited by the Member States.

Once the ‘verifier’ has carried out the verification of the submitted claim, it will decide to issue (or not) a certificate of conformity. This certificate will be recognised across the EU, shared between Member States via the Internal Market Information System6 and will allow companies to use the claim in a commercial communication to consumers across the internal market. The certificate of conformity of claims will provide businesses with certainty that their certified claim will not be challenged by the competent authorities in another Member State. This procedure will also apply to the verification of labelling schemes in terms of their compliance with the governance provisions. The Commission will be empowered to adopt an implementing act specifying the format of certificate of conformity of claims.

Article 11 sets out that the ‘verifier’ must be an officially accredited7 independent body, with no conflicts of interest to ensure independence of judgment and hold the highest degree of professional integrity. They must have the required expertise, equipment, and infrastructure to carry out the verifications as well as enough suitable personnel that observe professional secrecy.

6.6. Small and medium sized enterprises

Given the context of programmes from which small and medium sized enterprises can benefit, Article 12 ensures such initiatives are taken into account and the appropriate measures are taken to help them including financial support, access to finance, specialised management and staff training as well as organisational and technical assistance.

6.7. Enforcement of provisions

Article 13 foresees that each Member State will designate one or more appropriate competent authority as responsible to enforce the provisions set out in the proposal. As the consumer protection mechanisms vary between each Member State, it is more pertinent to let them designate the most efficient competent authority to carry out the enforcement including inspections, sanctions and judicial pursuits. In this way, the proposal leaves the possibility to Member States to choose the existing mechanisms under consumer protection law.

If more than one competent authority is designated on their territory, Member States will need to clarify the duties of each and establish the appropriate communication and coordination mechanisms, once again with the aim of efficiency.

Article 14 delineates the powers of the competent authorities to investigate and enforce the requirements. They include the power to access relevant information related to an infringement, to require access to relevant information to establish if there has been an infringement, to start investigations or proceedings, to require traders to adopt remedies and take action to end an infringement, to adopt injunctive relief where appropriate and to impose penalties.

Article 15 sets out that the competent authorities are also bestowed with the responsibility of monitoring the compliance of the proposal on the internal market. They are expected to perform regular checks of claims and labelling schemes (based on publicly available reports) as well as evaluating claims and labelling schemes that present a risk of infringement. Article 16 details the complaint handling mechanisms and requirements for access to justice.

When it comes to addressing infringements, Article 17 defines a series of obligations for Member States to respect when defining their penalty regime. The penalty must depend on the nature, gravity, extent and duration of the infringement, its character (i.e. intentional or negligent), the financial strength of the responsible party, the economic benefits derived from the infringement as well as any previous infringements or other aggravating factors. The penalties already imposed in other Member States for the same infringement shall also be considered.

Article 18 sets out the exercise of the delegation. The Committee procedure is set out in Article 19.

Article 20 sets out the monitoring requirements which is to be based on an overview of faulty environmental claims and labels provided by the Member States. The EEA shall publish on a bi-annual basis a report assessing the evolution of environmental claims in each Member State and the Union as a whole. An evaluation of the Directive is also foreseen in the provisions.