ESG claims such “environmentally friendly” are to be banned from product marketing in the EU.
The law comes as part of an anti-greenwashing package that stamps out generic environmental claims and other “misleading marketing tricks”.
The European Parliament and Council reached a provisional agreement this week on rules to ban misleading advertisements and improve product information.
Only sustainability labels based on approved certification schemes or established by public authorities will be allowed.
Terms such as “natural”, “biodegradable”, “climate neutral” or “eco”, without proof of recognised “excellent environmental performance relevant to the claim” are also in scope.
So too are claims based on emissions offsetting schemes that a product has neutral, reduced or positive impact on the environment.
The rules reach beyond fund products to broader commerce, for example MEPs insisted on making guarantee information more visible, as many people are not aware that all goods enjoy at least a two-year guarantee in the EU.
Parliament’s rapporteur Biljana Borzan said the Parliament was “clearing the chaos of environmental claims, which will now have to be substantiated”.
The provisional deal needs approval from both the Parliament and the Council. The vote by MEPs is expected to take place in November, and member states will then have 24 months to incorporate the new rules into their law.
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