EmpCo and regenerative agriculture claims explainer
- EmpCo targets vague environmental claims lacking clear supporting evidence
- Regenerative agriculture claims remain allowed when properly explained and substantiated
- Companies must specify practices used and business coverage clearly
- Industry frameworks can support claims but cannot replace definitions
- Marketing materials, websites and packaging all fall within scope
The EU Directive on Empowering Consumers for the Green Transition (EmpCo), which applied from last month, aims to prevent greenwashing by developing strict standards for sustainability claims, especially cracking down on those considered ‘vague’.
Regenerative agriculture is used by many of the food industry’s major players, including PepsiCo, Nestlé and Mars. Yet the term is not legally defined and consists largely of a loose collection of practices.
Could EmpCo affect the ability of companies to make regenerative agriculture claims?
How does EmpCo work?
EmpCo aims to prevent companies from making vague or unsubstantiated sustainability claims.
The directive does not stand on its own, explains Dr Constantin Eikel, partner at the law firm Bird & Bird. Instead, it writes new rules on sustainability claims into existing legislation on unfair commercial practices.
This means that the directive runs through each Member State’s unfair competition and consumer protection law, explains Gudrun Hausner, partner at law firm GvW Graf von Westphalen.
Nevertheless, there are certain key principles that apply to all Member States, she says. The directive:
- Bans making generic environmental claims unless the company can demonstrate ‘recognised excellent environmental performance’ relevant to the claim.
- It bans displaying a sustainability label that isn’t based on a certification or established by public authorities.
- It bans making claims about an entire product or business if it concerns only one aspect or activity;
- It bans claiming neutral, reduced or positive greenhouse gas impact based on offsetting.
- It bans any company from presenting legal requirements applying to all products as a special feature of its own offer.
In short, EmpCo addresses substantiation, pushing for claims to be substantiated, explains Bird & Bird’s Eikel. While it lacks general rules on how claims should be substantiated, it does ban ‘vague’, unproven green claims such as, for example, ‘eco-friendly’ or ‘green’.
If such claims are not backed up by a sustainability label or environmental performance, and not explained on the same medium as the claim, they are considered vague.
These terms can only be used in isolation if a company can point to recognised excellent environmental performance, i.e. if they’re verified by a scheme such as EU Ecolabel.
Terms such as ‘responsible’ or ‘sustainable’ are considered similarly vague, with the added complication that they also include a social dimension and so this element must also be backed up.
Yet this does not have to be restrictive if the company can explain its claims. “The way out is simple in theory,” says Eikel. “Explain the claim clearly, right next to it, wherever it appears. You can therefore talk about ‘responsible sourcing’, if you explain what you mean by that ... Once you have explained it, the term is not generic anymore.”
It is important that companies do not overstate such terms, however. These terms cannot be used if the actions companies are taking are not considered enough to justify them. Therefore, concrete terms are the safer approach.
“For most companies this means using these broad terms should be done with care, subject to legal review. When in doubt, switch to a concrete alternative. Instead of saying ‘responsible’, talk about the concrete measures taken.”
Will ‘regenerative agriculture’ claims be allowed?
So could EmpCo quash companies’ ability to make regenerative agriculture claims?
The short answer is no. Yet the directive changes how such claims can be made.
“With regard to the term ‘regenerative agriculture’ we see a risk that it might be considered a generic environmental claim,” says Eikel.
It is not a specific practice, instead combining a number of techniques. Furthermore, most companies only use some of these techniques. “It means something different to everybody,” he says.
Nevertheless, such claims can still be made if they are backed up, says Hausner.
“The more measurable and outcome-based the explanation, the better. The explained claim must still be accurate and well substantiated.”
A clearly specified explanation of the actions behind the claim – for example, “40% of our wheat is grown by farmers using cover cropping, reduced tillage and crop rotation, verified by X” – would not be considered generic.
What companies must not do is use ‘regenerative agriculture’ as a “bare buzzword”, Hausner stresses. Explanation is vital.
Can frameworks like SAI’s Regenerating Together help back up claims?
‘Regenerative agriculture’ does not have a legal definition. Yet the Sustainable Agriculture Initiative (SAI) has drawn up a framework governing regenerative agriculture practices, known as Regenerating Together.
The framework provides measurable outcomes and a definition of regenerative agriculture: “an outcome-based approach that improves soil health, biodiversity, climate, and water resources while supporting farmer livelihoods”. Major industry players including Mondelēz International, ADM, Unilever and FrieslandCampina, have signed up to it.
Can such frameworks back up regenerative agriculture claims? They can help, says Hausner, but they cannot substitute for a legal definition.
“A recognised industry framework gives companies a coherent, publicly available set of practices to point to. That makes it easier to explain a claim clearly on the same medium and to show that it is not misleading.”
Still, the industry definition cannot by itself turn ‘regenerative’ into a lawful generic claim.
A simple reference to ‘regenerative agriculture as defined by SAI’s Regenerating Together Framework’ is not enough, explains Bird & Bird’s Eikel. Even with SAI’s framework referenced, the methods behind the claim must still be explained on the same medium.
Where claims are made
The scope of EmpCo is not limited to packaging. This is important, as many key food players make extensive regenerative agriculture claims on websites and in marketing materials (although on-pack claims are growing).
“The definition of environmental claim covers messages in any form, including text, images, symbols, labels, brand names, company names and product names,” says Hausner. “This includes websites, social media, adverts and point-of-sale material.”
The exception to this, says Eikel, is mandatory communication such as sustainability reports, as long as they are not extensively used to make consumer-facing claims.
Furthermore, business-to-business claims fall outside the scope of the directive, says Hausner, although misleading advertising law may still apply.
The future of claims
EmpCo is likely to impact regenerative agriculture claims widely. Companies making such claims in the EU will be obliged to lay out in detail the methods they used and what part of the business they were used in. Simply the term ‘regenerative agriculture’ will not be enough.
Nevertheless, the directive will not quash the ability to make the claim at all. Providing it is backed up, the term can still be used.
