Understanding the European Commission Green Claims Directive: A Guide for Fashion Sustainability Teams

When it comes to protecting the climate, the ever-changing regulatory landscape makes compliance with corporate social responsibility a challenge — but one that’s, at least so far, been manageable. 

However, if you're a textile or fashion brand operating internationally, planning to create a global mark, and court consumers in the EU market, there's a new base of standards in town and it's also about protecting customers. Translation brace yourself for significant change in your products' sustainability claims.

The good news is that the GCD — aka, the Green Claims Directive — acts in concert with co-existing legislation and directives, such as the Digital Product Passports (DPP), as part of the EU’s Ecodesign for Sustainable Products Regulation (ESPR). That makes it easier to implement because it won’t require a complete overhaul of pre-existing systems and workflows internally.

And CSR Managers paying attention won’t be surprised: rollouts like the UK Green Claims Code and the 2023 decision Norwegian Consumer Authority targeting misleading environmental claims also make this a fairly familiar development. 

The bad news? The GCD, part of the general EU Green Deal, is dense, with a number of nuances and details that CSRs are liable to miss (and, potentially, misinterpret). 

So, in this blog post, we’ll aim to translate what the GCD means for your fashion brand when the adopted proposals state the EU’s intention to develop “climate, energy, transport and taxation policies fit for reducing net greenhouse gas emissions by at least 55% by 2030, compared to 1990 levels.”

Let’s dive in.

What Do CSR Managers Need to Know About the EU Green Claims Directive?

In some ways, the GCD does provide a more robust, broader “update” to earlier legislation. Besides the DPP and ESPR, implementing requirements of the Green Claims Directive and remaining in compliance must include aspects of the Unfair Commercial Practices Directive. As defined by the European Commission, the UCPD:

“[I]s the overarching EU legislation regulating unfair commercial practices that occur before, during, and after a business-to-consumer transaction has taken place.

EU rules on unfair commercial practices enable national enforcers to curb a broad range of unfair business practices. Examples of unfair business practices include untruthful information to consumers or aggressive marketing techniques to influence their choices.”

Put differently, you can look at the GCD as taking a two-pronged approach: the first focuses on maintaining the EU Green Deal’s goals and the second is concerned with protecting global consumers from predatory marketing and claims relating to sustainability. 

Let’s take a look at how this plays out as we translate GCD legislation into actionable insights. 

The EU Commission Green Claims Directive sets out some key rules to make sure environmental claims are clear, credible, and backed by real evidence. Here’s what CSR Managers need to keep in mind:

• Claims are only true and substantiated when they’re based on solid scientific research and up-to-date technical knowledge — you can't provide or make vague or unverified statements.

• It’s not just about transparency, it’s also about legibility: This means that if a product claim only applies to one part or just a specific area of a company’s ops, you, as the CSR, are responsible for customer awareness about product facts. Customers need to know exactly what the claim refers to.

• To maintain compliance CSRs will need to make sure that any product claims are holistic—it isn’t meaningful if it only highlights one eco-friendly aspect while ignoring the bigger picture.

• All major environmental impacts must be taken into account to give a fair and balanced assessment.

• Claims can't just reflect what’s already legally required — brands need to prove that they’re going beyond basic compliance and prove actual progress.

• If a product is marketed as environmentally better than the norm, companies need to back that up with solid proof.

• Businesses should be upfront about whether an environmental improvement in one area leads to unintended negative effects elsewhere.

• When it comes to related claims like carbon offsetting, companies must clarify whether they’re reducing or eliminating emissions and explain exactly how they’re doing it.

Now, the best approach for CSR Managers to take when making the transition is to think about the GCD and its related claims as less about avoidance or compliance and more about protecting buyers to their fullest. While the EU Commission Green Claims Directive undoubtedly has a political angle, you can’t ignore the positive, customer-focused requirement it fulfills. 

“94% of Europeans say that protecting the environment is important to them personally, and 68% agree that their consumption habits adversely affect the environment in Europe and globally.  For this to happen, consumers need reliable, verifiable information.” — “Attitudes of European citizens towards the Environment”, Special Eurobarometer 501.

Clearly, the numbers speak for customers' firm expectations when it comes to sustainability and eco-claims.

Key Takeaways From the GCD About Environmental Claims in the EU

From the standpoint of CSR Managers, it’s useful to think about transitioning and implementing the GCD across two broad categories: the first concerns actions around communication and the second covers anything having to do with verification. Of course, there are additional actions you’ll need to take such as labeling, data collection and reporting, and impact assessments, to name a few, but they’ll likely come under these umbrellas. 

If you start with these and harness tools that prioritize automation over manual processes, your actions when transitioning and decarbonizing your business’s value and supply chain become clear. Let’s take a closer look.

The requirements for environmental claim verifications

Remember: businesses must confirm any green claims they make are reliable, transparent, and fully backed by evidence. If they’re comparing their products to related competitors, those comparisons can't be misleading. They must use the same data and criteria across similar stages of the value chain. 

For example, if one company is measuring environmental impact based on energy use, water consumption, or dyeing processes, the other should be doing the same to ensure a level playing field.

Furthermore, when making claims about improvements in environmental impact, companies also need to use a baseline year and extrapolate their data to explain how those changes affect other areas.

Pro-tip: if you can’t prove the added value of your environmental claims or impact assessments, you can’t use new environmental labelling.

Now, it’s the responsibility of EU member states to verify and enforce minimum standards for backing up and communicating green claims in the EU. Before any environmental claim reaches potential buyers, it must go through an independent verification process to ensure it’s accurate, reliable, and it's not misleading or a case of greenwashing. On their end, EU member states must work with accredited and independent, third-party verifiers.

On your end, you’ll need to prepare for these verifiers with the mindset of improving information visibility or transparency of green claims in the EU.

One way to prepare is to work closely with your suppliers and ensure the claims you make about your materials are accurate. Platforms like Retraced supports CSR Managers with features like supplier questionnaires and audits and documents management to facilitate supplier-brand communications. You can encourage your suppliers to upload necessary documentation and certifications, promoting transparency and accuracy across your supply chain.

Pro-tip: If you’re the CSR Manager for a fashion or textile brand outside of the EU, selling and/or marketing to EU consumers, these rules apply to you. However, small- and medium-sized businesses with fewer than ten employees and less than €2 million turnover don’t need to comply with these new standards — unless, of course, they want to.

Communicating about offsets

Greenwashing — or making “green claims” about a product — is just one example of verification standards. You’ll also need to communicate specific additional information such as offsets and trade-offs. So terms like “climate neutral” and “net-zero” are, according to the GCD, just as confusing for consumers in Europe as greenwashing. 

“Companies claiming to offset carbon must ensure all environmental claims, especially those related to carbon credits, are supported by up-to-date scientific data, such as LCAs, and that they use certified carbon credits that comply with recognised standards, such as those outlined in the Carbon Removals Certification Framework.” EU Green Claims Directive: its impact on business operations, Publyon.

One solution to this need for communication is Retraced’s CAPA Management feature. CSR Managers can rely on this option to provide clear information about claims relating to the environmental impact of your products and how they contribute to a healthier planet. 

Additionally, Consumer Engagement Tools offered by Retraced allow you to share this information effectively, empowering consumers to make informed choices.

Wrap-Up: A Green Deal Calls for New Technologies

EU Green Claims Directive is a game-changer for the global fashion supply chain, encouraging brands to prioritize transparency and accountability. 

As you navigate this new landscape, collaborating and engaging stakeholders in the transformation that compliances calls for is vital. 

Retraced’s platform helps you keep track of necessary data, including information on certifications, and allows you to streamline the process of obtaining third-party verification, ensuring you’re always prepared and compliant.

As you support your team to adapt to these new standards, you’ll be able to turn the activity of “compliance” into a powerful opportunity for connection with conscious customers.