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Organic and Sustainable, but Is It Legal? Green Advertising and the Organic Claims Directive

According to a European Commission study, the demand for organic products among EU consumers has increased by 69% over the last 20 years. A survey commissioned by the State Consumer Rights Protection Authority (SCRPA) reveals that 59% of Lithuanian consumers consider the environmental impact when making purchases. This statistic has spurred businesses to enhance their environmental image to boost profits, resulting in green marketing becoming a favored strategy. Unfortunately, this trend has led to unfair commercial practices that consumers often encounter.

Unfair Commercial Practices

Unfair commercial practices against consumers can be categorized into three problematic areas. Firstly, “early obsolescence” refers to goods that have a shorter lifespan than they did in the past. The second issue is “sustainability labeling,” where some companies use unverified “green labels” as marketing tools. Lastly, the third category pertains to the use of “green” claims in advertising.

Green or Ecological Claims

A “green” or environmental claim is defined under European Union law as a statement that asserts or implies a positive environmental impact, reduced harm to the environment, or improved environmental effects. Such claims can be explicit, generic, or implicit, such as using the color green or specific logos. A study found that 80% of online shops, websites, and advertisements make green claims, with 53.3% being unclear or misleading. Using ecological claims in advertising that are incorrect, incomplete, or misleading is considered misleading advertising, which is prohibited.

In 2019, the Supervisory Authority deemed an advertisement by a Lithuanian petrol station chain as misleading. The ad claimed a 20% reduction in pollution and CO2 emissions without proper comparison to other fuels available in Lithuania. The omission of critical information rendered the ad incomplete and misleading. At the time, these claims were not identified as “green.”

The Eco-Claims Directive

Recognizing the need to combat misleading environmental claims, the European Commission proposed the Eco-Claims Directive in March 2023. This directive aims to establish comprehensive rules on advertising environmental impact and performance. It requires substantiated and verified claims, based on widely accepted scientific evidence, with a life cycle approach. Environmental trade-offs must also be included in claims, and publishers must review the information every five years. Competent authorities will verify claims, granting certificates of conformity for use in commercial activities. Consumer notification of green claims will be mandatory.

Scope and Timeline

The proposed requirements will apply to most EU companies, including those outside the EU targeting EU consumers. Micro and small enterprises may be exempt unless they voluntarily comply with the directive. Member States will have 18 months to transpose it into national law. However, discussions on the final text may extend the implementation timeline, considering the directive’s significance for the European market.