Electric Vehicles May No Longer Be ‘Green’ Under New EU Greenwashing Law Jon McGowan
Continuing EU Uncertainty hangs over markets: The EU is in early stages of negotiating the Green Claims Directive, a new law that aims to curb greenwashing and help consumers make greener choices.
Electric Vehicles May No Longer Be ‘Green’ Under New EU Greenwashing Law
Contributor
Follow
0
Jun 25, 2024,10:37am EDT
Updated Jun 25, 2024, 02:36pm EDT
The European Union is in the early stages of negotiating the Green Claims Directive, a new law that aims to curb greenwashing and help consumers make greener choices. The proposal heavily regulates the environmental marketing practices of businesses, limiting what can be claimed. However, under the initial proposal, it is likely that electric vehicles, a staple of the green movement, will not be allowed to be advertised as environmentally friendly.
As global concerns rise over the impacts of climate change, there has been a significant increase in consumer interest in supporting businesses and products that are environmentally friendly. This rise in consumer interest, as well as pressures from financial investors and other parties, have pushed businesses to take climate friendly stances. However, there is a growing and reasonable concern that businesses are exaggerating their environmentally friendly actions in what is known as greenwashing.
Traditionally, greenwashing was done through marketing. When the customer base wanted environmentally friendly companies, companies benefited by making themselves appear greener. In recent years, the phrase climate washing has developed as a subset of greenwashing that directly addresses the exaggeration of claims relating to climate change and greenhouse gas emissions. For decades, greenwashing frustrated environmental activists who wanted actual change by companies. However, as environmental, social, and governance investing grew, so did the legal pitfalls of greenwashing. Shifting from just clever marketing campaigns to misleading investors and violating consumer protection laws.
PROMOTED
There has been a general lack of regulation of greenwashing. However, as the Paris Agreement drives other climate related regulations, legal development in the area of greenwashing has increased as well. In February, the EU adopted the Directive on Empowering Consumers for the Green Transition, legislation that specifically targeted green and climate related claims. On June 18, the Council of the European Union announced that it adopted its position on the Green Claims Directive, a stricter companion to the Empowering Consumers Directive. The adoption of a position is the first stage of negotiations between the Council and the European Parliament for the final language of the Directive.
The Council position of the Green Claims Directive states: “If environmental claims are not reliable, comparable and verifiable, consumers and other market actors cannot fully leverage their purchasing decisions to reward better environmental performance.”
MORE FOR YOU
‘The Acolyte’ Rotten Tomatoes Score Keeps Falling, And Maybe It Should If We Ever Hope To Find Balance In The Force
WWE Raw Results, Winners And Grades After Great Wyatt Sicks Follow-Up
China Delivers Another Economic Blow To Russia
“It would be misleading to consumers if an explicit environmental claim or environmental label pointed to the benefits in terms of environmental impacts or environmental aspects while omitting that the achievement of those benefits leads to negative trade-offs on other environmental impacts or environmental aspects.”
Investing Digest: Know what's moving the financial markets and what smart money is buying with Forbes Investing Digest.