Home » EU clamps down on greenwashing – will the MENA follow? 

EU clamps down on greenwashing – will the MENA follow? 

by Madaline Dunn

From fake green labels to shady carbon-neutral claims, the EU’s new law on greenwashing means companies must now wave goodbye to problematic marketing tactics and start getting real about their sustainability practices. 

The EU law is the latest in a series of measures aimed at stamping out misleading and exaggerated claims on climate and empowering consumers.

With companies now required to walk the talk, this could help tackle the disconnect between businesses and consumers, providing the latter with more clarity around and confidence in such claims and, more broadly, encourage more tangible action on climate change. 

But as this global regulatory shift takes place, will the MENA follow suit? 

Goodbye to buzzwords

The EU first reached a provisional agreement on the rules in September, and on Wednesday, 17 January, MEPs gave it the green light, voting 593-21.

The law, set to come into effect in 2026, aims to put an end to companies running riot with misleading advertisements about their products and services. 

Indeed, over the last few years, we’ve seen everything from airlines advertising “carbon-free” flights to big beverage brands being called out over their bottle recyclability claims.

Research also shows that oftentimes, the language used by brands isn’t well understood by consumers, meaning that greenwashing can be hard to spot, and companies get away with using buzzwords and ‘greenspeak.’ 

A recent survey conducted by Trajectory and Fleet Street in the UK, for example, found that among the general public, there is a limited understanding of terms such as ‘net zero,’ ‘green,’ and ‘sustainability’.

Of course, the impact of this legislation on businesses could be huge, considering that EU research found 53 per cent of green claims give vague, misleading or unfounded information, while 40 per cent are without supporting evidence. 

On the labels front, the EU also found that across the 230 sustainability labels and 100 green energy labels, there are “vastly different levels of transparency.” 

Now, only labels that use approved certification schemes will be permitted.

“The recent EU greenwashing ban will make product labelling more reliable and advertising more trustworthy. This ban will filter which companies are actually taking sustainability into their product design and which have benefitted from loose regulations on “green” product labelling,” said Svenja Weber, Senior Responsible Investment and Sustainability Advisor at Sustainable Square.

“It will be interesting to witness how companies will deal with the mandate and how many organisations will need to re-label their products and recall their claims,” added Weber.

Christopher Shelton, ESG Legal Director, Eversheds Sutherland, said the rules are a “welcome step” from the European Union: “It will empower consumers to make more informed sustainable choices based on fact.”

However, he noted the risk of unintended consequences: “The potential downside of the regulations is that companies might become more reluctant to promote their ‘green’ products, or ambitions, for fear of falling foul of the regulations.”

Indeed, a recent report by South Pole found that greenhushing – whereby companies keep quiet about their sustainability and ESG credentials – is on the rise, even amongst climate-conscious companies. 

Carbon offsetting crackdown 

The anti-greenwashing law also outright bans claims that a product has a “neutral, reduced or positive impact on the environment” based on emissions offsetting schemes.

Indeed, research has uncovered that many of these schemes lack credibility, and even leading certifiers have been embroiled in scandal.

The unregulated voluntary carbon market, dubbed by some the ‘Wild West’, has historically lacked oversight, but movement towards regulation is now picking up speed, including in the US and Brazil, with the latter announcing plans to launch a regulated carbon market.

Carbon markets also came into the spotlight during COP28, although the climate summit ultimately closed without an agreement to operationalise Article 6 of the Paris Climate Agreement. 

Some, including not-for-profit watchdog Carbon Market Watch, said it was better to have no deal than “a bad one.”

Binning throwaway culture 

Also included in the clampdown are durability claims and prompts to replace consumables earlier than strictly necessary. 

MEP Biljana Borzan called the move a “big win” and said the legislation signalled a “step away from throwaway culture.”

“People will be able to choose products that are more durable, repairable and sustainable thanks to reliable labels and advertisements.”

Indeed, this throwaway culture has contributed significantly to the global plastic pollution crisis, which has filled the world’s waters with waste, killing both marine and land life and destroying the environment.

In this vein, the legislation complements the EU’s right to repair and EcoDesign rules.

Commenting on how the situation is evolving in the UAE, Weber said that while the UAE’s “Year of Sustainability” and private sector initiatives have encouraged more responsible consumption, there’s still a way to go. 

“Although the ban on plastic bags and other single-use plastic items, announced in October, was a great step in the right direction, it is still not tackling the “throwaway” consumerism culture we largely see in the UAE and the region.”

Robust frameworks, transparency and traceability 

When it comes to sustainability and environmental considerations, consumers are more clued up than ever, and ‘greenwashing’ has become part of everyday language.

The tide is certainly changing, and research shows consumers do want brands to be more vocal about sustainability, but only if they can back it up. 

Indeed, recent global research from brand engagement platform PicoNext found that 91 per cent suspect brands of engaging in greenwashing. 

Of course, not every brand that’s found guilty of greenwashing has done so intentionally, and with increased scrutiny around sustainability practices, recent research from Ivalua has found that nearly half of US organisations are concerned that they could be at risk of unintentional greenwashing. 

This was especially true with regard to Scope 3 emissions. 

Worryingly, nearly two-thirds said reporting on Scope 3 emissions feels like a “best guess.”

Further, another poll conducted by the Chartered Institute of Marketing (CIM) last year found that many of the 200-plus marketing professionals it surveyed were being asked to work on sustainability-related campaigns for clients without feeling qualified to do so. 

Ultimately, companies require robust frameworks and mechanisms to ensure they prevent slipping up and facing potentially catastrophic fallout. 

But, equally with the huge consumer shift towards more sustainable brands, products, and services, retreating into the shadows and failing to present greener products isn’t an option for companies either. 

Will the MENA follow suit? 

As the EU ramps up its greenwashing measures, questions remain about whether we will see similar legislation emerge elsewhere. 

Indeed, while the MENA hosted yet another COP last year, with climate action the hot topic on everyone’s lips, the region has not yet offered up any specific regulation targeted at greenwashing.

“Although sustainability has gained significant importance on corporate agendas, we are seeing more action concerning financing opportunities, reporting mandates and framework launches,” commented Weber.

Echoing this, Shelton noted that in the Middle East, and the UAE in particular, there are currently no specific rules or guides on “green” marketing, highlighting instead the “strict” advertising rules in place aimed at protecting consumers from false or misleading claims. 

“Despite this, and considering the ‘tsunami’ of global ESG regulations that have emerged over the past 24 months, we cannot rule out a move to further regulate green claims in the Middle East,” Shelton said.

Weber, on the other hand, said that change is unlikely to happen any time soon. “In the short term, I don’t see a similar ban in the region as customers are not widely demanding such from companies and private and public sustainability priorities are set elsewhere.”

That being said, when it comes to consumers in the region, purchasing priorities are shifting. 

Indeed, a recent report by RetailX found that 72 per cent of consumers in the Middle East now say sustainability is important to them, and 69 per cent believe that businesses should demonstrate this in their business practices – trusting whether they actually do is a different matter. 

Speaking about what’s required to drive greater transparency and accountability around sustainability and green claims, Weber said: “We need action from all three groups: the government, the private sector and consumers. Governments drive compliance and accountability, whereas businesses are the innovators and changemakers. Consumers need to raise their voices and demand more sustainable, eco-friendly and healthy alternatives.”

By Madaline Dunn, Lead Journalist, ESG Mena.

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