Nick Oettinger, Circular Economist and CEO of The Furniture Recycling Group (TFR Group), asks how will the EU’s new greenwashing regulations affect the UK’s recycling industry?
Earlier this year, the European Commission put forward a proposal called the Green Claims Directive. The plan aims to eliminate misleading environmental messaging across EU markets and address the growing issue of greenwashing.
The proposal outlines the EU’s first set of rules on how companies should market their environmental credentials and showcase performance.
The new rules will enforce significant changes to the way many companies currently evidence and communicate their environmental claims.
Greenwashing is a term used to describe when a company makes unsubstantiated claims about how environmentally friendly their products or services are.
In the UK greenwashing has been on the rise, with research finding that 42% of green claims were exaggerated, false, or deceptive in 20221 while almost half of the 230 eco-labels available in the EU have very weak or no verification procedures(EEB ).
Greenwashing is caused by a range of factors including consumer and competitor pressure, lack of investment and resources.
The new rules will enforce significant changes to the way many companies currently evidence and communicate their environmental claims.
For example, many companies make voluntary claims about sustainability including ‘ocean-friendly’, ‘carbon-neutral’ and ‘packaging made from 20% recycled plastic’, under the proposed rules these claims would have to be substantiated and verified before they could be used.
While this only impacts those businesses that trade in EU markets, there is a UK bill that will be proposed shortly giving the Competition and Markets Authority (CMA) more power to clamp down on misleading environmental claims for all companies in the UK.
The impact
Reduce greenwashing
Greenwashing is unethical and allows businesses across all sectors to mislead consumers into becoming customers and in some cases pay a premium for products or services they believe are sustainable.
The new proposed rules aim to significantly reduce greenwashing by enforcing fines, which will ensure that consumers have more peace of mind when purchasing.
Innovation that supports sustainability enables sectors to become more environmentally friendly, in turn helping to protect and preserve the planet.
The plan will also support those companies who are doing the right thing; from verifying their sustainability claims and working towards a sustainable business model to investing the time and resources into creating authentic innovative environmental solutions.
Regulate industry
While many industries find that regulation limits efficiency and innovation, it also ensures that businesses are held to account and consumers are protected by the minority of companies who don’t follow the rules.
With a more regulated industry, it will ensure that the companies who are showcasing accurate environmental information will thrive as consumers will trust in their sustainable credentials over those firms facing regulatory fines.
Support innovation
Competition is a key driver of innovation. While sectors become more competitive due to the need to stand out and prove their green credentials, firms will be driven to adopt more efficient production processes, and to offer new and improved products and services to customers.
Innovation that supports sustainability enables sectors to become more environmentally friendly, in turn helping to protect and preserve the planet.
Although the proposed Green Claims Directive delivers more rules and regulation for businesses to adhere to, it will also make a range of sectors more efficient and ethical, while providing opportunities for research and development into planet protecting solutions.
At The Furniture Recycling Group, we take pride in being more than just a recycling service, as we are committed to guiding businesses in their journey towards true sustainability.
Our services not only align with the ethos of the new EU regulations, but also drive innovation, and we offer solutions that help businesses transition smoothly in this evolving landscape while effectively reducing their environmental footprint.
