In the current global landscape, environmental awareness has profoundly reshaped consumer behaviour and market trends. As the reality of climate change and its impacts become increasingly undeniable, a significant shift in consumer consciousness has emerged. Individuals are now more informed and concerned about the ecological footprint of their consumption patterns, driving a demand for sustainable and environmentally friendly products.

This shift is not merely a trend but a transformation in the way consumers evaluate and make purchasing decisions. The modern consumer is not only looking at price and quality but also considering the environmental impact of their purchases. This includes factors such as the sourcing of raw materials, energy efficiency during production and the recyclability of the product.

As a result, companies are facing a dual challenge and opportunity: to innovate their practices to meet the new environmental standards demanded by consumers and to transparently communicate their genuine commitment to sustainability. This evolving consumer landscape is setting the stage for significant changes in business strategies, marketing approaches and corporate policies aimed at environmental sustainability.

Therefore, how do trademarks influence and shape eco-conscious business strategies within the evolving landscape of consumer sustainability preferences?

Trademarks at the forefront: key drivers in eco-conscious business strategies 

Trademarks play a significant role in the context of environmental awareness, particularly as companies seek to distinguish their products and services in a crowded market. 

Increasingly, brands are incorporating text, words and graphic elements related to the environment or ecology into their trademarks. This strategic inclusion is aimed at attracting consumers who prioritise sustainability and environmental responsibility in their purchasing decisions.

Companies are recognising that consumers are more likely to support brands that demonstrate a commitment to ecological values. By integrating green symbols, eco-friendly slogans and nature-themed imagery into their trademarks, brands communicate their environmental commitments at a glance. For instance, trademarks that feature leaf motifs, the earth or terms like “eco”, “green” or “sustainable” immediately convey a message of environmental stewardship. These elements make it easier for consumers to identify products and services that align with their values.

However, this trend has led to a proliferation of greenwashing. 

Understanding greenwashing

Greenwashing refers to the practice where trademarks use misleading environmental claims in their marketing and branding efforts. Specifically, the European Council defines greenwashing as any voluntary message or representation (which can be in any form, including text, images, graphics or symbols, such as labels, brand names, company names or product names used in commercial communications) that is not required by Union or national law, that claims or implies without substantiation that a product, product category or trademark has a positive or neutral environmental impact, is less harmful to the environment compared to others, or that it has improved its environmental impact over time. This deceptive practice not only misleads consumers, who rely on such information to make environmentally responsible choices, but also undermines the credibility of genuinely sustainable trademarks, creating an uneven playing field in the market.

Therefore, trademarks that engage in greenwashing seek to capitalise on the growing market for eco-friendly products without genuinely investing in environmentally friendly practices. However, it has become difficult for the public to distinguish between brands genuinely committed to environmental efforts and those merely using environmental claims to deceive consumers.

Thus, how has greenwashing influenced the development and enforcement of environmental regulations within the European Union?

The European legislative response to greenwashing

In response to the pervasive issue of greenwashing, the European legislator has taken decisive action with Directive 2024/825, issued on 28 February 2024. This Directive amends earlier legislation, specifically Directives 2005/29/EC concerning unfair commercial practices and 2011/83/EU regarding consumer rights. Its introduction aligns seamlessly with the broader objectives of the European Green Deal and the European Circular Economy Action Plan. The Directive’s primary goal is to empower consumers to make more informed decisions that favour sustainable consumption. It seeks to eradicate practices that detrimentally affect the sustainable economy and prevent consumers from making environmentally sound choices.

The amendments and their implications

Directive EU 2024/825 significantly strengthens the provisions of Article 6(1) of Directive 2005/29/EC by integrating environmental and social characteristics, as well as circularity aspects, into the criteria for determining misleading practices by traders. This pivotal amendment mandates a thorough, case-by-case evaluation to verify that the sustainability claims about a product authentically reflect its environmental impact. This enhancement fortifies the legal framework against misleading environmental claims, substantially bolstering consumer trust in eco-labelled products.

To further ensure the fairness and credibility of environmental claims, especially those related to future climate-related performance like carbon neutrality or similar objectives by a predetermined date, Directive 2024/825 introduces essential amendments to Article 6(2) of Directive 2005/29/EC. It addresses the challenge of unsubstantiated future-oriented environmental claims by requiring that such claims be rigorously evaluated on a case-by-case basis and are backed by clear, objective, publicly available and verifiable commitments.

According to recital 4 of the Directive, the required implementation plan for these claims must include all relevant elements necessary to fulfil these environmental commitments, such as budgetary allocations and technological advancements. Furthermore, the plan must be verified by an independent third-party expert with substantial experience and expertise in environmental matters. This stringent verification ensures that claims about future environmental performance are not only ambitious but also realistically grounded in feasible and concrete plans, thus safeguarding consumer trust and reinforcing the Directive’s objective to combat greenwashing by ensuring transparency and accountability in environmental advertising.

Directive 2024/825 also strengthens the integrity of sustainability labels by including a specific provision in Annex I of Directive 2005/29/EC, which lists commercial practices which are considered unfair under all circumstances. This provision targets sustainability labels that lack certified backing or are not established by governmental authorities, aiming to prevent misleading practices in environmental advertising. This measure ensures that any sustainability label displayed on products, processes or company communications is founded on verifiable standards, protecting consumers from potentially deceptive claims.

Moreover, Directive 2024/825 sets out a comprehensive action plan to facilitate the green transition and rigorously combat greenwashing. The Directive enforces three fundamental principles: firstly, requiring brands to substantiate all environmental claims with concrete evidence; secondly, mandating that these claims undergo validation by an independent, authoritative body to confirm their accuracy and reliability; and thirdly, ensuring that the information provided to consumers is clear, transparent and dependable, thereby enabling them to make informed decisions based on reliable environmental data.

To implement these stringent new regulations, Member States are afforded a 24-month window, starting from 6 March 2024, to transpose the Directive into their national legislation. This period is designated for the necessary adjustments within national legal frameworks to align with the Directive’s rigorous standards, thus reinforcing efforts across the EU to maintain integrity in environmental marketing and to support effective sustainable consumption practices.

National efforts and the French example 

France has demonstrated a robust commitment to curbing greenwashing by implementing specific legislative measures through Decrees No. 2022-538 and 2022-539, which were enacted on 13 April 2022, and came into effect on 1 January 2023. These decrees establish stringent requirements for advertisements that declare a product or service to be carbon-neutral. They mandate the regular publication and annual update of a comprehensive report that meticulously outlines the methods employed to achieve carbon neutrality. This stringent regulation ensures that such claims are well-substantiated and transparent, thereby preventing any misleading representations regarding the environmental impact of products or services.

Building upon the groundwork set by Law no. 2021-1104, enacted on 22 August 2021, which pertains to climate and resilience, France has integrated an environmental dimension into the legal definition of misleading commercial practices. This law significantly broadens the scope of what is considered unfair competition, directly addressing greenwashing by requiring that all environmental claims be precise and verifiable.

Moreover, starting in 2023, France has further incentivised manufacturers to improve their environmental sustainability practices through a revised eco-contribution system. This system rewards manufacturers who are affiliated with mandated eco-organisations, such as ReFashion for the fashion industry, with reductions in their eco-contribution fees. These reductions are based on a performance evaluation system that assesses the manufacturers’ efforts in three key areas: the durability of the product, the acquisition of relevant environmental certifications and the use of recycled materials in their production processes. This incentivisation scheme not only motivates manufacturers to adopt greener practices but also harmonises economic incentives with environmental stewardship, fostering a more sustainable industrial landscape.

These comprehensive measures reflect France’s proactive approach in integrating environmental accountability into the corporate sector, significantly contributing to the broader fight against greenwashing and promoting a sustainable future.

Conclusion: the future of legal interventions in greenwashing 

The recent legislative changes across the European Union necessitate a heightened level of diligence from companies when making environmental claims. The implications of these legal standards mean that businesses must meticulously ensure that their environmental assertions are not only compliant with the latest regulations but also robustly substantiated in order to withstand scrutiny. This precision in claim formulation is critical to avoid the pitfalls of greenwashing, which can lead to severe penalties, including fines, reputational damage and consumer distrust.

For legal professionals specialising in environmental law or corporate compliance, these evolving regulations demand continuous education and adaptation. Lawyers must stay abreast of these changes to provide sound legal advice that encompasses not just the avoidance of legal infractions but also the strategic management of reputational risks and the complexities of potential litigation. This involves a deep understanding of both the letter and the spirit of the law, ensuring that client practices are transparent, sustainable and aligned with public and regulatory expectations.

The broader fight against greenwashing is pivotal in maintaining public confidence in environmentally-friendly products and the sustainability claims made by companies. In this context, it is imperative for brands to adopt a strategy of transparency. By aligning marketing practices with genuine environmental standards, companies can fortify their credibility and sustain consumer trust. This approach is not merely about compliance but about leading by example in the transition towards a more sustainable and environmentally responsible business landscape.