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ESG Today: EU Council adopts law banning misleading product sustainability claims, and more...

The European Council announced that it has adopted a law aimed at protecting consumers from misleading green claims and other greenwashing practices, including banning unverified generic environmental claims such as “environmentally friendly,” or “biodegradable” and those based on emissions offsetting schemes, marking the last major step to the passage of the new legislation.

Key aspects of the new directive include rules aimed at making product labels clearer by banning the use of generic environmental claims not backed up with proof, and the regulation of sustainability labels to allow only the use of those based on official certification schemes or established by public authorities. A European Commission study recently found that more than half of green claims by companies in the EU were vague or misleading, and 40% were completely unsubstantiated.