The EU Green Claims Directive (GCD) will outlaw false environmental claims, regulating consumer trust, truthful business and meaningful sustainability action.

Credible sustainability systems will be vital in corporate adaptation to the GCD. Influencing companies’ claims work, they can create positive impacts for people and planet.

In Part Two of ISEAL’s credibility series, Vidya Rangan, Policy and Engagement Director and Patrick Mallet, ISEAL’s Innovations Director, reveal why credible claims are so vital.

Environmental claims are crucial because they drive consumer choices. 

Over time, the hope is that sustainable products gain a larger market share, and consumer choices can drive positive impacts.

But as the green transition hastened, corporate greenwashing confused consumers, fracturing this positive market process. 

Now, through the GCD, governments and companies are stepping up to find solutions. 

Together, they must truthfully evidence green claims and real-world impacts.

It’s a tough ask. Companies will need help to meet the new law. 

And lawmakers transposing the GCD into national legislation will need help defining which claims are aligned with the law’s good intentions.  

Why credibility and the GCD are perfect partners

“Businesses partnering early with credible sustainability systems get a built-in advantage; better alignment with forthcoming legislative requirements and better substance to their claims,” says Patrick.

Sustainability systems that comply with ISEAL’s Code of Good Practice and follow our Credibility Principles will be well positioned to help companies meet the law.

As the GCD moves towards implementation, Vidya believes the law and credibility together can define good claims.

“Here’s where credibility wins outright,” she begins. “If both legal instruments and voluntary frameworks push credible claims, it becomes doubly important for a business, company or brand to ask themselves hard questions.

“Why am I saying what I’m saying? Do I have the data to back it up? Is this the truth I’m putting out there? Am I being transparent about what I’m doing?”

Vidya believes such credible, deep questioning will be the differentiator for claims with the right real-world impact.

“We want a core shift on how companies talk and act on sustainability. Credibility sits at the heart of inspiring the deepest, long-term change,” she explains. 

Credibility: helping companies through compliance

“As repercussions for misleading claims become more significant, if there are punitive damages, companies may shy away from making any kind of sustainability claim at all,” Patrick explains.

Vidya believes sustainability systems can help companies put the right systems, processes and practices in place to meet the coming regulations; guiding businesses on their journey to speaking and communicating more credibly. 

“This partnership approach makes corporate compliance with the GCD potentially less costly,” she says.

“Plus, the transition to the GCD can be faster, so firms get claims and products into the world quicker – and companies can then go out and talk more credibly about what they’re doing.

“Partnering on credibility can guide not only what’s legally required, but systemic change for the long-term, adding competitive advantage.”

ISEAL’s experience and the future

EU governments will need to understand not just what good claims are, but whether the systems behind those claims are credible too.

“A key thing in implementing legislation like the GCD is the specifics,” Patrick says. 

“How will this work in practice, when you think about the coming transposition to EU countries implementing this law?”

“In addition to our claims work, I think this speaks fundamentally to ISEAL’s Code of Good Practice and Credibility Principles,” Patrick continues. 

“These speak to the detail of what systems need to have in place to underpin credible claims. 

“We have deep experience in what works and what doesn’t to support the assurance of a relevant, robust claim. All of that guidance can contribute, as we look to national transposition.”

Vidya feels the devil is going to be in the detail within future legislation.

“What’s fascinating about ISEAL’s work is we have already helped define robust systems and practices,” she says.

“We recognise that many schemes and companies have had implementation challenges on good claims. It is one thing to have good claims practice in theory, quite another to put this into the real world,” Vidya enthuses. 

“As the GCD comes into force, we expect lawmakers, companies and market forces to run into concerns on what good looks like. That’s where our credibility experience is really going to matter –
 and help guide good claims in the future.”

Getting claims right

ISEAL has consistently supported the need for credible claims, producing guidance for sustainability schemes and companies on what good claims are. For example, we have helped companies and schemes make credible claims on living wages, a topic that’s receiving a lot of attention and corporate commitment. 

“Without a sense of what credible claims look like, you can start eroding trust; from donors or consumers,” Vidya explains. 

Vidya argues such guidance results in unique benefits for policymakers, consumers, funders, investors and businesses.

Further, Vidya points out that voluntary measures don’t have compliance as their key denominator. Rather, their driver is the deepest, long-term sustainability impact. 

That’s why voluntary frameworks and measures set the bar higher.

As the GCD moves through negotiation and transposition, credible sustainability systems can help companies plan for the required minimum level of compliance. 

But, more importantly, they can help companies go above and beyond the law. 

Doing so will help improve company reputations and profits, while ensuring early preparedness should the GCD’s requirements increase over time. 

An eye on the future

Today, it’s too early to precisely predict the GCD’s influence.

But big changes are coming; where the law empowers consumers on sound, confident purchasing that drives sustainable markets with real-world impacts.

“We want to see businesses incentivised – talking confidently about well-evidenced claims,” Vidya says.

“Credibility is essential to good claims-making and can drive a race to the top.”