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The new legislation, which will come into force in 2026, received overwhelming support in European parliament and will make it harder for organisations to adopt misleading climate claims.
The law will ban terms such as “climate neutral” and “climate positive” that rely on offsetting on the grounds that the information paints an inaccurate picture of an organisation’s climate impact.
After the laws come into fruition, green labels for products and services will need to be accredited by approved sustainability schemes and supported with hard evidence. Once the changes are made, the EU will be one of the world’s toughest regarding its green claims code. In its simplest terms, any green claims which rely on carbon offsetting will be banned within the EU.
Unsure about greenwashing? Find out what it is and how to avoid it here.
Also coming under fire are loose, general, and poorly understood climate labels such as green, energy efficient, biodegradable, eco-friendly, and environmentally friendly. Organisations will still be able to use these terms but will be required to support them with succinct explanations and evidence.
The main driver of these new laws was a debate surrounding the environmental impact of carbon offsetting schemes and their effectiveness in mitigating negative climate outcomes. The schemes used alongside “carbon neutral” labelling led consumers to believe their purchase of a particular product or service has no averse effects on the climate, which very often isn’t the case. As an example, the popular clean cookstove project, one of the most popular offsetting schemes, has been found to overstate their beneficial climate impact by an average of 1,000 per cent, according to a recent study.
“This new legislation puts an end to misleading advertising for supposedly environmentally friendly products and thus enables consumers to make sustainable choices,” says Anna Cavazzini, Green MEP and chair of the Committee of the Internal Market and Consumer Protection.”
“Investments by companies in climate protection projects are welcome and of course they can still be communicated. However, it should no longer appear that planting trees in the rainforest makes the industrial production of a car, the organisation of a soccer World Cup or the production of cosmetics climate neutral,” Anna added.
The legislation isn’t designed to deter organisations from making and communicating climate commitments, but rather to ensure they are choosing the right environmental schemes and projects and using them honestly and effectively.