Last month, the European Parliament set out its new Green Claims Directive, which seeks to address the rampant problem of greenwashing across the continent. Greenwashing practices have become prevalent and the new directive hopes to solve that by proposing two new laws that address vague and misleading green claims by companies. The launch of the new policy appears to have already made an impact as a series of reputable brands quickly backtracked on green campaigns. Here we explore the directive and its impact on commercial buildings.

As news emerged of the directive, major low-cost airlines easyjet and JetBlue moved away from their established carbon offsetting schemes entirely, suggesting that the environmental impact of those schemes would not have stood up to scrutiny. And, after a lawsuit at the end of May, Delta Airlines was forced to pay damages to customers for “misleading carbon-neutral statements” in campaigns that warranted customers paying a higher price.

In fashion retail, Gucci is amongst the high-profile companies now transitioning away from its carbon-neutral messaging, having also removed carbon offsetting from its website following the decision made by the European Parliament on May 11th. Other notable retailers, H&M and Zara, have discontinued their Conscious and Join Life collections respectively, while the famous shoe brand Crocs has backtracked on their net zero targets, delaying these from 2030 to 2040.

“As the climate crisis has become more urgent, we’ve worked proactively to ensure our regulation remains effective,” said Director of Complaints and Investigations for the Advertising Standards Authority (ASA), Miles Lockwood. “Advertisements shouldn’t suggest that brands are further along that journey than they are. Too often we witness a lack of precision and over-ambition, with firms exaggerating their credentials and lacking evidence or balance.”

A specific focus of the EU’s new directive is to tackle misleading carbon offsetting claims. Carbon offsetting is when organizations compensate for their impact on climate change by supporting the reduction of greenhouse gas (GHG) emissions elsewhere, rather than in their own operations —like outsourcing their environmental improvement. To save our planet we don’t really care where the GHGs are reduced, as long as they are reduced, but the current carbon offsetting landscape has historically offered too many opportunities to exaggerate and mislead.

“For too many companies, offsetting has been a quick fix that makes the sustainability problem disappear for a while. Recent legislation will motivate industry players to dig deeper into the work of sustainability in more impactful and authentic ways. It is not enough to mitigate or ‘neutralize’ our carbon impact—rather we need to drive it to zero,” says Aileen Lerch, senior manager of sustainability at sustainable shoe company Allbirds. “With every unclear and unsubstantiated claim made, the word ‘sustainability’ is losing its meaning and credibility.”

After Greenwashing, Is Smartwashing next?

Greenwashing terms like those being discussed in aerospace and retail will be very familiar to those in the real estate sector. Held up to scrutiny, however, would our green, net-zero, and carbon neutral buildings stand up to the test? Whilst energy consumption and generation may be easy to measure, things get a lot more vague with embodied carbon, for example, while inspection and enforcement is minimal across the board. The same would also apply to smart, intelligent, or intuitive buildings and devices that claim direct or indirect green performance benefits.

“Smartwashing is also becoming a trend in the industry. Smart technologies in buildings, when implemented correctly, can have a significant benefit on the social, environmental and economic impacts of a building. This is why there is a trend towards increasing claims of “smartness” from many actors in the built environment industry,” writes the Smart Building Collective. “As with sustainability claims, smartness claims for buildings should be verified in a systematic and proven way. If there is no proof of smartness to match the claims, that’s smartwashing.”

Just like consumer products that claim environmental or social benefits, the devices and systems that create green and smart buildings will also be put under the spotlight as the Green Claims Directive expands and others emerge. Green and smart building certification programs will also be under scrutiny for the status they impart and premiums they generate on real estate assets. The Green Claims Directive is a warning sign for organizations across all industries and around the world to make sure they live up to their green marketing.