In May, the European Parliament (the “Parliament”) overwhelmingly approved the proposal for a new directive (see the Parliament’s adopted amendments) requiring organisations to substantiate and verify their environmental claims and labels, aimed at protecting consumers from greenwashing.
The directive addresses a need for reliable and verifiable information for consumers, as well as concerns that companies are not making meaningful progress towards reducing emissions by relying solely on carbon offsets. Carbon offsets are generated from reductions in greenhouse gas emissions, which may then be utilised by companies to compensate for greenhouse gas-emitting activities.
Background
The proposed directive is part of the first circular economy package, along with the ecodesign regulation, construction products regulation and an own-initiative report on the EU strategy for sustainable and circular textiles. It paves the way for a new Green Claims Directive that will further specify the conditions for making environmental claims in the future.
The Carbon Offsetting proposal
Carbon pricing can play a role in guiding economies towards low-emission pathways, and has attracted greater attention recently, largely driven by developments at international level around carbon market frameworks, and by corporate net zero commitments. Around one third of the world’s largest publicly listed companies now have net zero targets.
Offsetting will likely play a part in many companies’ net zero...
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