EU green agenda under pressure: The future of greenwashing

EU countries are calling to weaken the Green Claims Directive, a legislation designed to prevent greenwashing, according to a document seen by the Financial Times. This shift came in the build-up to recent elections, as a response to political pressure to ease parts of the EU’s climate agenda. The changes could significantly impact the future of the EU Green Deal, initially aimed at achieving net-zero emissions by 2050.

Join our ESG team as we break down the latest developments shaping the future of sustainability in Europe.

What is the EU Green Deal?

The EU Green Deal was initially proposed by European Commission President Ursula von der Leyen in 2020 after a groundswell of support for Green parties in the 2019 election. The EU Green Deal aims to achieve net-zero emissions by 2050.

What has happened?

Von der Leyen has since backtracked on several critical planks in a bid to gain support from more conservative groups in the lead-up to the voting. After a weakening of rules on packaging waste and environmental due diligence during the legislative process, member states are now aiming to soften the Green Claims Directive.

Softening the Green Claims Directive

There have been complaints that the verification process is overloading companies already facing stricter environmental reporting and tighter rules on pollution and waste, with untenable amounts of paperwork.

Why is this happening now?

The weakening of the green agenda comes as EU citizens start voting (06.06.24-09.06.24) to determine the shape of parliament and set the direction for the next five years of policy. The EU’s Green Deal is a heated campaign issue, with parties on the right blaming it for contributing to industrial decline and laying a heavy bureaucratic burden on companies.

What has been proposed?

Member states have offered a “simplified procedure”. Only four countries, including Germany and Austria, have not backed the loosening of the rules. This process allows companies to assess whether their own claims are scientifically credible under certain circumstances, allowing for “a balance between consumer protection and administrative and financial burden for economic operators.”

Other points of contention: Carbon offsets

Current position of EU governments:

• Simplified procedures: Companies may self-assess the credibility of their carbon-neutral claims under certain circumstances, aiming to reduce administrative burdens.
• Use of offsets: Governments view carbon offsets as a legitimate tool for companies to use at the beginning of their decarbonisation journey, not just as a final step.

European Parliament’s stance:

• Stricter regulations: Parliament wants to ban slogans based on carbon offsets unless the company has maximised its emission reductions and uses offsets only for remaining emissions.
• Transparency: Parliament aims to ensure companies clearly state if their carbon neutrality relies heavily on offsets, avoiding small print disclaimers.

The final decision on these changes will be made by EU ministers on June 17.

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