The European Union is pushing its ambitious sustainability plan, the "European Union Green Deal", an agenda to advance the sustainability of member economies - which will have far-reaching implications for beyond the European Union Member States, just like the GDPR did.
Given the stringent environmental, sustainability, and other regulatory standards in the EU Green Deal's Sustainable Products Initiative, it is essential that businesses across the world monitor the targets and ambitions of the EU Green Deal to be prepared to comply with higher standards for imports into and trading with the EU.
Once more, the European Union is championing a vision - which in the context of the Green Deal is to become the world's first climate neutral continent by 2050. The European Climate Law codifies the objectives of the EU Green Deal to make the EU's climate, energy, transport and taxation policies capable of reducing net greenhouse gas emissions to at least 55% of 1990 emissions by 2030. Other key elements of the EU Green Deal include the elimination of emission of pollutants or toxic substances, a safe, cost-effective, and renewable energy supply, protection and reinstatement of ecosystems and biodiversity, the Circular Economy Action Plan (CEAP), which is intended to stimulate a green and sustainable EU economy, the Farm to Fork Strategy, which is intended to achieve an environmentally friendly food system, efficiency in using energy and resources in building and refurbishment, and advancing the transition to sustainable and smart transportation.
The stringent environmental, sustainability, and regulation standards within the EU Green Deal framework will not only affect companies domiciled in the EU - but also those that import into the EU. Consequently, it is essential that businesses begin early to monitor the targets and ambitions of the EU Green Deal, to get familiar with them and start preparing already now to comply with these higher sustainability standards for their products.
The Sustainable Products Initiative (SPI), which is a part of the CEAP, will put forward additional legislation to ensure that products in the EU market are more durable, reusable, repairable, and energy efficient, while simultaneously possessing the capacity to reduce waste and release harmful chemicals into the environment. The CEAP, along with the SPI, will introduce new eco-design requirements, ultimately creating a new standard for sustainable products in the EU that will require: incorporating recycled material instead of primary raw material in production; limiting single use; and, banning the destruction of unsold durable goods. Moreover, the SPI will extend the producer's responsibility for the product throughout its life cycle (from manufacture through disposal of the product). Hence, products that are not recyclable or that are difficult to recycle may be subject to additional costs, such as higher taxes for collection and sorting, whereas products that are easily recyclable, repairable, or reusable could benefit from financial incentives.
The SPI aims at empowering consumers to consider sustainable choices and the environmental and social impacts of products. And, very important, it shall contribute to combat greenwashing (misleading sustainability claims made by companies). Businesses will be required to be more transparent with consumers regarding a product's lifespan and carbon footprint as well as the availability of repair services, spare parts, and repair manuals for the product. This information will be required to be easily accessible via a quick response (QR) code.
It is expected that the first stage of the eco-design requirements will be applicable to products such as textiles, furniture, detergents, paints, lubricants, iron, steel, and aluminum because of their high environmental footprint and potential for circularity. Later stages are expected to include product-specific or well-defined product group specific legislation on compliance with certain eco-design requirements.
The EU will be imposing specific requirements on businesses to provide information on their social and environmental standards for sustainable production under the EU Product Environmental Footprint method (PEF). Businesses will have to justify how environmentally sustainable their products are throughout their value chain. In the near future, there is potential for other legal mechanisms to come into play, such as new laws on human rights and environmental due diligence to complement the EU Green Deal.
The SPI, in particular, may also cause businesses exporting into the EU to invest in transitioning to new models of sustainable production. For instance, businesses may have to start researching and investing in the procurement of recycled materials instead of primary raw materials, or adjust to higher standards of sustainability to ensure products are more durable, reusable, repairable, and energy efficient, while producing minimum waste and harmful chemicals.
Furthermore, under the SPI, businesses may have to disclose more information about the level of sustainability of the inputs into their product supply chains, such as recyclability potential, carbon footprint, reparability, resource use, so that consumers can compare sustainability levels of products as well as to strengthen market surveillance to tackle greenwashing by companies.
The EU is an important trade partner for many countries - including Switzerland. Consequently, these developments will not only impact the EU, but eventually the global market. It is important for businesses exporting to the EU to be well-informed of such changes and to begin preparing now to comply with these higher standards in the near future.
We expect that the EC will be providing additional information on the EU Green Deal in the coming months, and we will keep you updated on the latest developments in future articles.
Research also shows that consumers are confronted with unfair commercial practices, which actively prevent them from making sustainable choices. Early obsolescence of goods, misleading environmental claims (‘greenwashing'), non-transparent and non-credible sustainability labels or sustainability information tools are common practices.