Can a Policy Stop Companies From Greenwashing?

In 2022, the EU planned to tackle empty ‘green claims’ with new legislation. Here’s how it aims to improve the transparency of food systems across Europe.

If you inspect the package of your cereal, coffee, or energy bar you will likely find some sort of label attesting to the product's sustainability. From the EU Ecolabel, CarbonNeutral, Dolphin Safe, Marine Stewardship Council, to Rainforest Alliance Certified, the European Commission noted that today, there are 457 voluntary environmental labels worldwide, with over 100 currently used in the EU.¹ This number is even higher for so-called environmental claims (e.g. “green”), which tend to be vague and poorly defined, often leading to greenwashing, a phenomenon where products are falsely marketed as more environmentally friendly than they really are.² All of this begs the question - how can we possibly judge the true sustainability of our products and food amongst this onslaught of claims and labels?

The need for label harmonisation

The problem with eco-certifications and labels is that there isn’t a single unified approach to provide reliable environmental information about a product. That means consumers, businesses, and investors are reliant on their own individual understanding of the food, product or supply chain to make informed purchases or investments. A new harmonised methodology in the EU would compare all labels and claims under the same framework. If it works, this would provide reliable, comparable and verifiable information about the impacts on the environment throughout the life cycle of a product, something most eco-labels fail to do.²

In 2020, the European Commission released the Sustainable Product Initiative (SPI) as part of the Circular Economy Action Plan of the EU's Green Deal. After a feedback period and public consultation with European citizens, the Commission adopted the legislative proposal for the initiative in March 2022. The SPI will legally require companies to verify the environmental claims on their products and improve the credibility of environmental performance evaluations. It will also set rules for product design and require information sharing through a digital product passport. Ultimately, the SPI aims to promote a more sustainable and circular economy within the EU.³

Learn how the EU Green Deal could impact your food systems

One method to measure impact

To analyse the environmental impacts of a product over its life cycle, Life-Cycle Assessments (LCAs) are used. These LCAs assess the environmental impacts of all materials and processes used within the supply chain of a product, from start to finish, giving us a truer picture of the total impact of a product while also allowing producers to identify possible areas for improvement in their supply chains. LCAs also provide input around the trade-offs between several environmental impacts and avoid shifting the environmental burden from one part of the product life cycle to another. To evaluate the magnitude and real-life significance of any environmental impacts discovered in the LCA, a Life-Cycle Impact Assessment (LCIA) is conducted to show us how much each environmental ‘cost’ is really worth.⁴ This LCIA phase of the assessment looks to weigh up different factors like emissions, land use, or carbon costs and places them on a relative scale to help us make sense of where and how each product is having an impact on our environment.

To support the new policy, the European Commission’s Joint Research Centre developed its own standardised method for conducting LCIAs, called the Product Environmental Footprint (PEF). Under development since 2013, the PEF will harmonise the rules of undertaking LCIAs and provide a consistent approach to assessing and validating product impacts. While the PEF is similar to a regular LCA, it has more stringent rules than a regular LCA and allows different products to be compared more easily.^1,2

How the Product Environmental Footprint (PEF) works

A product of 10 years of development, the PEF methodology forms the backbone of the Sustainable Products Initiative. This initiative proposed a legal framework requiring companies to substantiate their ‘green’ claims. Aside from using information tools and labelling for products, it also involves identifying the necessary conditions for entering the European market. In short, the goal is to make sustainable goods and services the norm.^4,5 

There are 16 environmental impact categories recognised to assess the environmental impact of food and other products. The 16 impact categories are based on indicators ranging from greenhouse gas emissions to land use, radioactive emissions, and water contamination.^6,7 While it is important to take an integrative approach to assessing the impacts of a product and look at the broad set of impact categories, not all are relevant for an individual product.² Hence, the PEF methodology prioritises only the environmental impacts covering the most relevant environmental issues related to the product supply chain of interest. This selective process has however been critiqued as a factor for making the assessment method more subjective, as it allows for certain impacts to be neglected.³

What impact could this policy have on food sustainability?

The policy is about much more than a label. It is a chance for legislation mandating clear guidelines and standards for green claims using the robust PEF methodology. In practice, this legislation could lead to legally legitimised ecolabel certifications. If successful over time, it could also lead to establishing a public European register that would offer companies a breakdown of the conditions and measures needed to validate sustainability assertions, as well as a listing of approved and banned environmental claims.^3,4

Early talk about the policy discussed the idea of an “eco-score” or a traffic light front-of-pack label system.⁸ However, it is still unclear how or if the PEF could be implemented for labels.

Many questions remain

There are still many questions to answer. Would it lead to creating a single reliable and recognisable consumer-facing label? Would it really help to reduce the mass of confusing eco-labels? And importantly, if there were another standardised label, would it be voluntary or mandatory for companies to use it? Introducing a mandatory label would fully harmonise labelling schemes and prevent the proliferation of labels by adding yet another one to a congested market, but it is unlikely that the EU would make this decision, as it would likely result in significant international trade disruptions and backlash from private actors.^3,9

There is already an existing EU-wide Ecolabel called the “EU flower” that is relatively widespread, although this doesn’t cover food but is commonly seen on the packaging of products such as paper and paint.⁸

The PEF method provides weighting of the most relevant impact (e.g. global warming) depending on the product and its manufacturing externalities. Some argue that the emphasis on carbon dioxide emissions is too heavy and that the weighing of indicators by producers can be subjective and sometimes underestimates other environmental impacts such as biodiversity loss or water pollution. Additionally, the methodology requires collecting extensive data across the entire value chain, from farm tools to transportation and storage methods used until retail. Finding this data is not only complicated, but in many cases, it simply isn’t something that all small businesses can provide - limiting the assessment’s applicability in favour of larger producers with greater resources.^6,9

Perhaps the belief that a unified label or methodology can make our supply chain more sustainable still has to be demonstrated. That said, requiring companies to substantiate their environmental claims against a standardised methodology and reevaluating the validity and ethics of empty green claims is undoubtedly necessary. Information on the production of a product should be presented in a clear, specific, unambiguous and accurate manner, and this initiative could be the push needed to start digging for more transparency across the supply chain.