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| 3 minutes read

Sustainable Labels – Good for the climate or for the conscience?

There are currently around 230 sustainability labels in the EU. According to the EU, about half of the green advertising claims are vague, misleading or provide unfounded information. Reason enough to take a closer look at them.

Environmental awareness is on the rise. Everyone wants to help save the planet, but mostly as comfortably as possible and at a low price. It is practical when even at the discounter the majority of products have the label "climate neutral" or similar. That is good for the conscience and also good for the environment, isn't it?

However, "climate neutral" only means that the emissions related to a specific product are compensated by the purchase of so-called CO2 certificates. The idea behind this is a global CO2 balance. Roughly speaking, this means that CO2 emissions from production in country A can be offset by climate projects (e.g. reforestation) in country B. This is practical for companies, because through tis the often lengthy process of climate protection can be outsourced to third parties, while the own climate-damaging production continues to run at full capacity. The products can still be sold to customers as, e.g., "climate neutral". However, the environmentally harmful production and the products themselves remain unchanged. The overall effect on climate protection and the actual reduction of CO2 emissions worldwide is small. Consumer protectionists in particular criticise the lack of environmental protection through the use of such certificates - some even draw parallels to the sale of indulgences. The criticism by consumer protectionists is mainly based on three points:

  •  CO2 certificates are based on questionable calculations. Fictitious scenarios have to be used, which makes the calculation unrealistic and hardly verifiable. In the case of renewable energy projects, it is often unclear whether they actually provide additional climate protection or whether the project would not have been realized anyway. Another problem is double counting, which occurs when, for example, both the country in which a climate protection project was implemented and a company that buys offset certificates from the project claim the CO2 reductions for themselves.
  • CO2 offset is non-transparent. The quality of the certificates issued can hardly be traced. This is because, certificate trading takes place in the private sector and is not uniformly controlled by a central body. As a result, monetary motives are often the guiding principle and the CO2 savings of the projects are overestimated.
  • CO2 offset sets the wrong incentives. On the part of companies, it seems attractive to invest in the acquisition of cheap certificates instead of redesigning their own operations to save resources and reduce CO2 emissions in production. On top of that, certificates can be immediately converted into partly misleading labels that have a positive effect on the consumer and lead to higher consumption. Consumers deliberately choose such products because they feel that they are actively protecting the environment when they buy them. CO2-intensive products such as meat, dairy products or juices made from exotic fruits are not called into question by the label "climate neutral".

The diversity of labels and the lack of regulation presents itself as a gateway for greenwashing.

To address this, the EU Commission adopted a proposal for a directive on green claims in March 2023. As part of the Green Deal, this proposal contains measures in the form of clear criteria for future labels. According to the proposal, the labels should only be permitted if they meet the requirements for labelling systems developed at EU level. In other words, there is to be an independent review based on scientific findings. The proposal must now be approved by the European Parliament and the Council. This process can take months to years and depends largely on the complexity of the directive. Once the directive has been adopted, it still needs to be transposed into national law.

Those who want to protect the environment should therefore not blindly rely on labels, but rethink their consumption. It will still take some time and regulatory efforts before consumers may be able to fully rely on sustainability labels.


greenwashing, sustainability, esg