Understanding the Green Claims Directive: A guide for STR operators
The approaching implementation of the European Union’s Green Claims Directive (GCD) is set to significantly reshape the landscape of sustainability claims within the travel and hospitality sectors. For owners and managers of short-term rentals, this directive presents new challenges and opportunities to enhance the credibility of their sustainability claims.
In this blog post, we’ll delve into what the Green Claims Directive entails. It definitely has implications for STR businesses. Consequently, we offer you practical steps to ensure compliance and effective communication of sustainability efforts.
What is the Green Claims Directive?
The Green Claims Directive is a legislative proposal aimed at preventing greenwashing—the practice of making misleading claims about the environmental impact of products or services. It mandates clear, substantiated, and transparent communication of environmental information. All with the purpose of enabling consumers to make informed decisions. This directive is part of the broader European Green Deal initiative, designed to foster a clean, circular economy.
This directive is specifically designed to cover companies based within the European Union and those outside the EU that engage in commerce within its borders. This comprehensive scope is crucial because it ensures that environmental claims about products or services are accurate and substantiated, irrespective of the company’s headquarters location.
For example, a company based in the United States or Asia might operate short-term rentals in the EU. If they advertise these properties as having “energy-efficient appliances” or claim their operations are “carbon neutral,” these statements must meet the same rigorous standards as those made by EU-based companies. Maintaining this uniform standard is essential for consumer trust.
Why do we need the Green Claims Directive?
Despite the growing number of eco-labels and green certifications—over 230 ecolabels and 100 private green energy labels in the EU alone by 2020—the lack of standardisation and verification has led to rampant greenwashing. Businesses often use vague or unsubstantiated claims such as “eco-friendly” or “sustainable,” making it challenging for consumers to make informed choices. The EU Commission found that in 2020, 53% of the environmental claims were misleading or unfounded. This undermines consumer trust and hampers genuine sustainability efforts.
The GCD seeks to streamline this process by setting stringent guidelines on how businesses can communicate their environmental impact. Thereby, helping consumers make informed decisions and fostering a genuinely sustainable economy.
What are the guiding principles of the Green Claims Directive?
The standards outlined in the GCD are designed to ensure that environmental claims made by businesses, including those in the short-term rental industry, are accurate, reliable, and verifiable. Here’s a breakdown of the key standards and requirements set by the GCD that businesses need to meet to ensure compliance:
1. Verification by third parties
Environmental claims must be substantiated and verified by independent third parties. This standard ensures that
a) any claim made about a product or service’s environmental impact is backed by credible evidence.
b) the verifiers need to be accredited and comply with specific EU regulations to ensure their independence and reliability.
2. Transparency and traceability
Businesses must provide clear, understandable, and accessible information about the environmental claims they make. This includes detailed explanations of how these claims are substantiated. The idea is to make environmental information traceable and transparent so that consumers can easily understand and verify the claims themselves.
3. Standardisation of claims
The GCD pushes for the use of standardised and approved environmental labels and certifications. This standardisation helps prevent confusion among consumers caused by the myriad of private labels and certifications that may not have a consistent basis for comparison.
4. Documentation and record keeping
Businesses are required to maintain comprehensive records of all data and information used to substantiate their environmental claims. These records must be kept up-to-date and be readily available for inspection by regulatory authorities to ensure ongoing compliance.
5. Prohibition of misleading practices
The directive explicitly bans certain practices that could mislead consumers. This includes:
a) Making broad or vague claims like “green” or “eco-friendly” without specific substantiation.
b) Using sustainability labels that are not backed by any recognised certification or standard.
c) Claiming environmental benefits when the benefits apply only to a part of the product or service but are presented as if they apply to the whole.
d) Displaying a sustainability achievement that merely complies with existing legal requirements as if it is a distinctive voluntary effort.
6. Consumer engagement and redress
The directive regulates the claims themselves and provides mechanisms for consumer engagement and redress. This means consumers can challenge misleading claims and seek remedies, which adds an extra layer of accountability for businesses.
7. Penalties for non-compliance
EU member states are required to establish and enforce penalties for non-compliance that are proportionate, effective, and dissuasive. This could include fines, mandatory corrective actions, or public notices about the non-compliance, ensuring that there is a strong deterrent against making misleading environmental claims.
Once fully implemented, these standards will apply to all sectors and all sizes of businesses within the EU, although micro-enterprises may have specific exemptions or lighter requirements.
For STR businesses, adhering to these standards means ensuring that any claims about the environmental friendliness or sustainability of their properties are clear, substantiated by evidence, and aligned with EU-approved labels and standards.
7 actions to prepare your STR business for the Green Claims Directive
To keep your short-term rental business aligned with growing traveller demand for sustainable stays—and to empower property owners to reduce utility costs—it’s essential to get ahead with some strategic actions. By adopting sustainable practices now, you can prepare to stay ahead of the curve as GCD legislation approaches. Here are seven key steps to help you embrace sustainability while positioning your business for future success. Let’s explore these impactful measures!
1. Substantiation of claims
Ensure that any environmental claim about your rental property is backed by credible, verifiable information. This might involve obtaining third-party certifications or conducting audits to assess the environmental impact of your operations. Sustonica and QALIA are recognised experts in verifying sustainability initiatives, particularly within the STR industry. Consulting with them can offer crucial guidance on beginning and improving your sustainability efforts.
2. Engage with verified environmental labelling schemes
Utilise EU-recognised labelling schemes to ensure your environmental claims are credible and standardised across the industry.
3. Invest in sustainability
Beyond compliance, use this directive as an opportunity to genuinely enhance the sustainability of your operations. This could involve investing in energy-efficient appliances, using sustainable materials in your renovations, or improving waste management practices. Not sure? The EnviroRental Roadmap offers a step-by-step guide on kickstarting your sustainability journey. The best part is that it is free!
4. Monitor legislative developments
Stay informed about the progress and specific requirements of the GCD as it moves towards formal adoption and implementation. This can affect timelines and compliance strategies. When you subscribe to EnviroRental, you’ll receive our monthly newsletter filled with the latest sustainability trends in the STR industry. Signing up is a great way to keep informed and actively engage with sustainability in your operations. Join today!
5. Prepare for audits and verifications
Set up internal processes that allow for easy verification of your environmental claims. This might include detailed record-keeping, regular internal audits, and establishing contacts with accredited third-party assessors. Dive into what other businesses are acing in their green game. Take a peek at EnviroRental’s case studies—handpicked just for STR managers and owners like you—and catch some eco-smart strategies for your playbook!
6. Transparency in communication
Clearly and accurately communicate the specific environmental aspects of your STR. Avoid vague or broad statements that could be misinterpreted as misleading.
7. Educate yourself and your team
Understanding the nuances of the Green Claims Directive is crucial. Consider training sessions or webinars for your team to navigate the complexities of compliance effectively. If you’re just beginning your sustainability journey, make sure to join webinars on sustainability in the STR industry. These sessions are a great way to get up to speed and start implementing effective strategies.
A more transparent and genuine green future
The Green Claims Directive is setting a new standard for sustainability claims across the EU. For STR owners and managers, adapting to these changes not only involves compliance but also presents an opportunity to genuinely enhance the sustainability of their offerings. By embracing these changes, you can help avoid penalties while positioning your business as a leader in the sustainable travel movement, potentially attracting more conscientious consumers. Profitable for your business, beneficial for the planet!
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