Empowering Consumers & Enabling Companies: Unravelling the Potential of the EU Green Claims The number of labels and claims on sustainability advantages of products and services marketed in the European Union is at an all-time high. But, does this mean that consumers are truly empowered and enabled to make informed decisions? The European Commission thinks they aren’t. According to the European Commission, over 50% of green claims are misleading or unfounded and 40% do not have supporting evidence. From the 230 sustainability labels currently registered in the EU, at least half offer weak or non-existent verification. Due to the lack of strict criteria and transparency, consumers are often overwhelmed and misled instead of informed and empowered. To meet this challenge, the European Union has launched the Green Claims Directive, an important initiative to set standards and restore confidence in environmental claims and labelling. The directive sets the stage for a circular and sustainable EU economy by introducing stringent measures and setting transparent criteria for companies to substantiate their environmental claims. Under the new regulation, environmental claims have to be independently verified and offset claims can only be used if companies can prove a net-zero target, show progress towards decarbonisation, and disclose percentages of total greenhouse gas emissions offset. Ultimately, the aim is to ensure that consumers receive correct and comparable information by taking action against unverified, unsubstantiated or exaggerated claims. In doing so, the directive aims to promote fair competition, level the playing field, and incentivise responsible practices. Rethinking business as usual In order to comply with the EU Green Claims Directive, companies will have to rethink not only their marketing strategies but also the way they run business in general. An important question is, for example, which internal processes are needed in organisations so that traditionally separate corporate functions are brought together in order to utilise synergies. How can marketing and sales specialists within a company work together with their sustainability colleagues to shape holistic strategies that have a solid foundation and align with the regulation? Building trust & enhancing transparency Moreover, the volume and complexity of the data required to validate sustainability claims will also put a new focus on trust, collaboration, and transparency among and between supply chain actors. Therefore, questions such as how to design frameworks and put in place strategies and processes that allow companies to collect the necessary data in efficient and seamless ways are becoming increasingly relevant. Starting new collaborations Finally, companies will also have to think about collaborations and partnerships beyond their immediate business and supply chain networks: there’s a wealth of untapped potential in partnering with diverse stakeholders. How can actors from the fields of academia, civil society organisations, consumer associations, and innovative sectors such as digitalisation and AI, be involved to tackle related challenges and give way to holistic and impact-oriented solutions? At the CSCP, we believe in the power of collaborations to enable companies to turn the new regulation into a business opportunity while at the same time keeping a strong focus on empowering consumers to make informed decisions. Our tailored multi-stakeholder approaches are holistic and draw on real-world strategies that bring stakeholders together around a common goal with a shared sense of responsibility. Rather than simply replicating analyses and assessments and disseminating information, we prioritise building an ecosystem in which key actors, including consumers, can build collaborations that are based on trust, transparency and accountability and add value to all parties involved. Moreover, we rely on our expertise on consumer insights, behaviour change, and sustainable lifestyles to ensure that consumer insights are fed into business decision-making while at the same time involving consumer organisations and initiatives to enable and empower European consumers to confidently navigate the changing marketing landscape. The EU Council will start talks with the European Parliament on the EU Green Claims Directive in the new legislative cycle, which begins in September 2024. Would you like to engage with us on the topic of EU Green Claims Directive? Reach out to Francesca Grossi!