Environmental/Sustainability Claims and Policy Frameworks for Nutrition Businesses

Sustainability continues to be an important topic, both for environmentally conscious consumers and for food and beverage organizations (FBOs). Consumers are becoming more aware of environmental impact, which means they are placing higher priority on “green” products in their purchasing decisions.

Indeed, in planning their advertising and marketing campaigns, traders are taking these factors into account, and environmental claims have become a powerful marketing tool. FBOs are responding to consumer demand with increasing communication about sustainability and environmental actions for their products—the so-called “green” claims.

Claims and Labels
Green claims (also known as environmental claims or eco-friendly claims) are claims that suggest a product, service, brand, or business provides a benefit for, or is less harmful to, the environment. In the case of products, claims most commonly refer to the length of supply chains (“food miles”) or sustainable agriculture/production, but this is by far not the only way a product can claim to be green.

Other claims are less specific, for example: “Environmentally-friendly,” “recyclable,” “100% recycled,” “biodegradable,” “conserves nature,” “eco-friendly,” and “resource-friendly” are only a selection of common environmental claims.

In fact, there are more than 200 environmental labels active in the E.U., and more than 450 worldwide. For carbon emissions only, more than 80 widely used reporting initiatives and methods exist. Examples include the Blue Angel eco-friendly label, the Naturland label, the V label for vegan and vegetarian products, the E.U. Organic logo for food, and the Fair Trade label, to name but a few. This makes it difficult for consumers, but also for companies and other market actors, to make sense of the complexity and variability of these claims.

Regulation and Validation
The U.K. is no longer in the E.U. and can therefore draw up its own legislation independent of E.U. law. Its Competition and Markets Authority (CMA), a government regulatory body responsible for strengthening business competition and preventing and reducing anti-competitive activities, is setting up stricter guidelines for these types of green claims—the Green Claims code. The goal is to address “green washing” and claims that are potentially misleading to consumers.

The CMA has set up a checklist to ensure that green claims comply with the consumer protection law. This checklist contains items such as the necessity for the claim to reflect the whole life cycle of the product, to not exaggerate its positive environmental impact, or to not miss out or hide information about the environmental impact.

Similar actions are being taken at the European level with the E.U. initiative on substantiating green claims. In the context of the European Green Deal, the Commission states that “Companies making ‘green claims’ should substantiate these against a standard methodology to assess their impact on the environment.” The Commission will also propose that companies substantiate their environmental claims using Product and Organization Environmental Footprint methods.

“Greenwashing” (i.e., stating ecological properties that are untrue or misleading), creates a risk of a less green economy. Currently, if green claims, or indeed any other claims, are made that are not true then Directive 2005/29/EC—the so-called Unfair Commercial Practices – UCP Directive—is invoked at the E.U. level. From its entering into force in January 2021, it protects the consumer from being misled by false advertising. Since it is a Directive, it needs to be adopted into the national legislations of E.U. Member States. In Germany, for example, the local version is the Unfair Competition Act (UWG).

This and other initiatives are intended to establish a coherent policy framework with the aim of making sustainable goods, services, and business models the norm while directing consumption patterns towards sustainability. The overall objective, of course, is E.U. climate neutrality by 2050. In this context, it makes sense to reduce the environmental footprint of products consumed in the E.U. The fact that these initiatives, at the same time, increase the appeal of these green products for consumers is a win-win situation for FBOs.

The European Green Deal initiative has so far not resulted in any concrete legislative measures; it remains to be seen what the results will be, and how FBOs can respond and use these changes. Experienced consultancies such as a&r are ready to assist.