Logo overload? New rules for sustainability schemes and labels

The European Commission has long wanted to exert more control over independent sustainability schemes, and now, with the recent publication of the new Green Claims Directive, the extent of its ambitions are clear. Well known not-for-profit organisations, such as FSC (Forest Stewardship Council) and RSPO (Roundtable on Sustainable Palm Oil), will have to show they comply with the requirements of the Directive in order to be placed on a list of environmental labels that can be used on consumer products within the EU.  New private schemes will be discouraged, and they will have to prove benefits beyond those of existing systems, in order to operate in Europe. These changes are all part of a wider effort to clamp down on greenwashing.

As a justification for the new restrictions, the European Commission cites results from an open public consultation. It claims that ‘27% of participants agreed with the statement: "the proliferation and/or lack of transparency/ understanding/reliability of sustainability logos/labels on products and services" is a relevant obstacle to empowering consumers for the green transition’. Certainly, there has been a rash of company specific sourcing claims and logos appearing on products, as big brands try to distance themselves from deforestation or human rights abuses. These claims have little, or no independent oversight.  They provide a way for some companies to talk about sustainability without having to pay extra for purchasing certified raw materials.  But already announced updates to commercial practices and consumer rights Directives, will put an end to such labels and logos. So, it is difficult to see a justifiable reason for further restrictions on reputable multi-stakeholder schemes.

Perhaps the European Commission wants to drive uptake of its own voluntary sustainability scheme, the EU Ecolabel, by bearing down on competitors. But the EU Ecolabel, which was established in 1992, only covers a restricted range of products that doesn’t as yet include food, feed or agricultural products. Its environmental standards are under the direction of the Joint Research Council (JRC), which is the European Commission’s scientific body, whilst the helpdesk is run by a commercial consultancy. It no doubt has a place, but the EU Ecolabel does not provide any additional benefits.  Traditional sustainability schemes offer much more than certification, important though that is. They provide a meeting place for debate, carry out training, offer technical help, provide advice and disseminate scientific advances. 

The Green Claims Directive has a wider purpose. It sets out to ensure that all environmental claims on products are accurate, regardless of whether they are made under the auspices of a sustainability scheme. Statements about greenhouse gas savings on a particular product, for instance, will require external verification. While no one wants consumers to be misled, sometimes there is no simple right answer.  It is widely acknowledged that calculation of greenhouse gas emissions depends on the assumptions made and the baseline chosen for comparisons. For example, there is an ongoing debate about whether bioplastics are better for the environment than plastics made from oil and gas, which hinges on a disputed life cycle assessment from the JRC. An article I wrote last year summarised the discussion at the time. If this argument over LCAs is anything to go by, the rules and framework for verification will be contentious. The likely side-effect will be that fewer companies make environmental claims and consumers have less information to make choices. 

It is a shame to penalise reputable sustainability schemes by burdening then with extra administration. The Directive itself says that the costs incurred will be ‘substantive’ and should be passed on to manufacturers and sellers. A number of legal questions are left open, which means that delegated acts will be needed to provide answers. EU countries will be able to add their own requirements on top. Organisations will need to employ a lawyer to interpret the requirements for different types of claims and statements.

Sustainability schemes for biofuels, such as ISCC (International Sustainability and Carbon Certification), are already approved by the European Commission. Since their inception in 2011 the administrative burden has increased steadily, with the effect that some smaller biofuels schemes have dropped out. Based on this experience, it is likely that a number of existing sustainability schemes will find it too costly to operate in the EU market. It is ironic that in its attempt to eradicate greenwashing, the European Commission is punishing the very organisations that are doing the most to ensure that environmental claims are accurate. 

Published: 18 April 23

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