Lack of trust can be a possible dealbreaker for customers. It's crucial for companies to communicate their company’s sustainability efforts and environmental responsibility with trustworthy green labels.  

The correct use of green labels is not just about marketing but also about transparency, credibility, and avoiding greenwashing, which can damage a brand’s reputation. To protect customers from misleading sustainability claims, the European Commission introduced the Green Claims Directive. 

What is the Green Claims Directive? 

53% of green claims give vague, misleading, or unfounded information, and 40% have no supporting evidence. The EU Green Claims Directive is a proposed framework aimed at preventing companies from making misleading environmental claims. It ensures that businesses substantiate their environmental claims with clear, science-based methods.  

The green claims must be verified by independent, accredited organisations, promoting transparency and consumer trust. The directive applies to voluntary environmental claims and aims to protect consumers, enhance market fairness, and support the EU's transition to a circular, green economy. 

Green Labels vs Misleading Green Labels 

A green label is a third-party certification given to products, packaging, or overall operations that meet specific environmental declarations or claims, usually related to sustainability, energy efficiency, or eco-friendliness.  

Green labelling serves as a strategic tool for companies to communicate their environmental performance and gain a competitive market edge for specific products and services, also helping customers to make informed choices that align with their sustainable values.  

The International Organisation for Standardisation (ISO) has classified three types of voluntary labels: 

• Type I: Voluntary, multiple-criteria, third-party verified labelling schemes, which assess a product's environmental impact based on its life cycle. 

• Type II: Self-declared environmental claims that are not validated by an external, independent verifier. 

• Type III: Voluntary report based on Life Cycle Assessment (LCA), providing multi-criteria quantified environmental data that is verified by a third party. 

On the other hand, misleading green labelling is a form of greenwashing that usually uses vague or unsubstantiated claims to make products seem more environmentally friendly than they are. These labels may use symbols that resemble trusted certifications, or they may use terms like "eco-friendly” or “100% green” without providing specific details or certifications to support these claims.  

Misleading labels exploit the customers demand for sustainable products and services. In 2023, 81% of consumers expressed a preference for sustainable packaging. Although it seems like a shortcut to win the market, misleading labels lead to confusion and could damage the brand image in the long run. 

Identify Green Labels to Avoid Greenwashing

Avoid falling into the greenwashing trap by recognising the differences between legitimate green labels and misleading claims: 

1. Look for third-party verification: The most credible green labels are awarded by independent organisations that follow strict assessment procedures. For example, if a product is labelled “compostable,” check whether it has a certification from a recognised authority like TÜV Austria. 

2. Be cautious of vague terms: Words like “green,” “eco,” or “natural” are often used loosely without specific criteria. A product that uses these terms without offering clear explanations of what they mean in terms of environmental benefit should raise suspicion. 

3. Assess the hidden trade-offs: A truly sustainable product considers its environmental impact from start to finish. If a product claims to be “eco-friendly,” consider how it was made and transported and how it will be disposed of. Genuine certifications will assess the life cycle impact, whereas misleading labels often focus on one aspect of sustainability while ignoring others (e.g., a product made from recycled materials that’s packaged in non-recyclable plastic).  

4. Research the label: Before trusting any green label, it’s a good idea to research the organisation behind the certification. Reputable certifications will have detailed websites that explain the processes and assessments involved. Beware of unfamiliar labels that may not have a clear verification process. 

5. Irrelevant claims or information: Just because a claim sound environmentally friendly doesn't mean it's relevant. For example, a product may highlight the absence of a harmful chemical that is already banned by law, making it seem more eco-conscious than it really is. This misleading claim blurs the line between truly sustainable products and those that appear environmentally friendly without real impact. 

What do green labels mean for business? 

Green labels add credibility to a company’s sustainability claims and foster consumer trust as more consumers become aware of environmental issues. For businesses, having a recognised green label not only sets businesses apart in a crowded market but also helps consumers quickly identify products that meet specific environmental standards, giving certified brands a competitive edge and boosting sales. Green labels can also be a powerful tool for businesses to communicate their compliance with environmental regulations, reducing the risk of regulatory issues.  

For example, Solinatra coffee capsules, certified "OK Compost Industrial" by TÜV Austria, provide businesses in the coffee industry with the reliability they need to appeal to environmentally conscious consumers.  

One of Solinatra's grades, Solinatra Universal Food, is also certified industrial compostable by TÜV Austria, further supporting businesses with endless possibilities for truly sustainable packaging solutions. These certifications can open doors to new markets, particularly in regions like Europe and North America, where retailers prioritise sustainability. 

Green labels are a commitment to better practices, making it easier for everyone to contribute to a sustainable future. Only choose materials and products with genuine green labels!