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HOW TO: Avoid greenwashing with the new ACM rules for sustainability claims

Updated: Aug 29, 2023

In this article:


Key insights

 
  • It is no longer allowed to claim that a product or service is 'sustainable', 'conscious', or 'ethical' unless you can provide substantial proof.


  • A sustainability filter in a webshop may no longer be called 'sustainable', 'sustainability', 'conscious choice' etc.


  • If you communicate about your company's sustainability ambition, you need to have and share a clear action plan on how to achieve it.



  • If it is required by law, it does not count as a sustainability benefit.


  • If you use carbon offsetting as a strategy for carbon reduction, you may not claim carbon neutrality.

 

The new greenwashing regulations


The European Commission published a proposal for new greenwashing regulations earlier this year (the Green Claims Directive). Many European countries have their own verification body to check if companies comply with the regulations. Most of these 'watchdog' organizations come out with a guidance document to translate these EU rules into a more comprehensive document. In the Netherlands, the Authority for Consumers & Markets (ACM) released an update for their sustainability claims guidelines. All companies that are selling products or services on the Dutch market, need to follow these guidelines if they want to make sustainability claims. A sustainability claim is a statement about a product, service, or company explaining how ‘sustainable’ it is. The rules have been developed to prevent greenwashing and are based on the European consumer protection law and the rules about unfair commercial practices.


Read more about greenwashing: what it is, and why it is hindering sustainable change in the fashion industry in this article.

The ACM released the first version of their 'Rules of Thumb' in January 2021, to provide a framework for companies for formulating sustainability claims to avoid misleading consumers. Since then, there have been many developments in the area of sustainability, which have led to the updated version. The June 2023 update is more extensive and includes more examples that illustrate what companies are and are not allowed to say.


In short, the new guidelines are about:

  1. Accuracy and Specificity: Use accurate, clear, specific, and complete sustainability claims.

  2. Facts and Updates: Claims need to be substantiated by facts and kept up to date.

  3. Fair Comparisons: Comparisons with other products or competitors need to be fair.

  4. Concrete and Measurable Ambitions: Future sustainability ambitions must be concrete and measurable.

  5. Clear Visual Claims: Visual claims and labels need to be helpful and not confusing.


In this article, we want to highlight the biggest changes for you, compared to the previous edition of the ACM Rules of Thumb, to make it easy for you to assess if your company's sustainability claims are compliant or if they need a revision. We work with different fashion brands on their sustainability strategy and communications. From this experience, we have learned which of the changes have the biggest impact on the brand and require immediate action. Let's get into it.



1. You may no longer claim that a product is sustainable


It is no longer allowed to claim that a product or service is 'sustainable', 'conscious', or 'ethical' unless you can provide substantial proof.


The ACM has determined that the use of general or absolute terms is misleading in many cases. An absolute claim gives consumers the impression that a product as a whole has (great) sustainability benefits or no negative impact. For such claims, the burden of proof is high: you need to demonstrate that your product does not have a negative impact on the issue the claim is about, e.g. animals, humans, and/or the environment, through, for example, a Life Cycle Assessment (LCA) or the True Cost Method. Currently, this is unfeasible for almost all products.


WHAT ARE ABSOLUTE/ GENERAL/ VAGUE CLAIMS?

Examples of this type of claims are environmentally friendly, eco, green, friend of nature, ecological, sustainable, more sustainable, good for the environment, climate-friendly or friendly to the environment, non-polluting, biodegradable, emission-free, low-carbon, reduced CO2 emissions, CO2-neutral, climate-neutral, slave-free, conscious and responsible.


2. A product filter can no longer be named 'sustainable' or 'sustainable choice'


A sustainability filter in a webshop may no longer be called 'sustainable', 'sustainability', 'conscious choice' etc.


The name of a sustainability filter should explain directly which criteria the products covered by the filter meet. The name of the filter needs to be sufficiently specific, and further explanation of the product criteria should be found next to the filter or - if the space does not allow it - one click away.


The same concept applies as in the previous point. The term 'sustainable' is too general and vague as there are no real criteria as to what makes a product 'sustainable'. Therefore a more specific term needs to be used that describes the specific sustainability attribute of the product category.


WHAT DOES THIS MEAN?

If you have a sustainability filter on your website to make it easier for your customer to find the 'more sustainable' product offer, the filter needs to clearly explain what exactly makes products in this category 'more sustainable'. Do they contain recycled materials for example? Then you could opt to call the filter 'recycled' for example.


Also, make sure that it is clear what criteria the products that fall in this category have. Do they contain a minimum of 5% recycled materials or a minimum of 50% for example? Be as specific as you can be.


3. You need to have and share an action plan if you communicate about your company's sustainability ambition


If you communicate about your company's future sustainability ambition, you need to have and share a clear action plan on how to achieve it.


The action plan needs to meet the following criteria:

  • Consists of concrete actions on how you will achieve your ambitions

  • Is specific. Make clear whether your plan relates to a specific product or to your entire company

  • Is achievable and therefore realistic

  • Is measurable. Express your ambitions for example in % and not in immeasurable terms such as 'a greener world within 5 years'

  • Is accessible and findable for consumers

  • Has started or is starting very soon

  • It is advisable to have your sustainability ambitions and their feasibility checked by an independent expert party


WHAT DOES THIS MEAN?

If you communicate your company's sustainability ambitions, make sure you have a clear plan with SMART targets and share this plan on your website.


Read about more benefits of creating sustainability goals for your company here.


4. Regulatory requirements may not be used as a sustainability claim


If it is required by law, it does not count as a sustainability benefit.


It is not allowed to create the impression with a claim that legal obligations or standard features are sustainability benefits.


EXAMPLE:

If your products are REACH compliant, this can not be used as a sustainability claim. REACH is EU legislation and therefore a legal requirement for products that are sold on the European market.


OPPORTUNITY:

If you are ahead of laws and regulations that are not yet in force you could still claim that as a sustainability benefit.


5. The rules for carbon neutral claims are more strict


If you use carbon offsetting as a strategy for carbon reduction, you may not claim carbon neutrality.


Do not use absolute claims based on carbon offsets, such as 'climate neutral' or 'net zero'.


Many companies have made claims about carbon-neutral shipping options or carbon-neutral products, if this is (in part) made possible by carbon offsetting, it is not allowed to claim carbon neutrality of a product or service.


How to ensure that your company is compliant with the new greenwashing regulations?


Our advice? Train your team, create a sustainability claims manual, and implement a sustainability claims process with a gatekeeper function. And, if you want to be really sure when making claims, get additional legal advice.


By doing so you will avoid law-suits, fines (of at least 4 percent of annual revenue in the offending market), negative media attention, and the impacts of having to change all communications (including online texts and visuals, hangtags, packaging, POS, in-store banners, marketing banners, etc.).


Would you like support in preventing greenwashing?

We train marketing, sustainability, and CSR teams and professionals to understand and implement the new guidelines for sustainability claims. We make sure your team knows what to say and - maybe more importantly - what not to say when communicating about sustainability. You can contact us with any questions.


If you want to have a clear overview of the new greenwashing rules, to use together with your team, you can download our updated Greenwashing Checklist here.


Note: We do not offer legal advice, but we help companies to adopt the guidelines, and to develop sustainability claims that are compliant with the green claims directive.


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