Welcome to Better Europe’s weekly update on EU Affairs.
MEMBER STATES KEEP RETAIL INVESTORS IN THE DARK ON SUSTAINABILITY IMPACTS
As Parliament prepares to formalise its positions on their legislation where it could not yet start negotiations with the Council, the Belgian Presidency is keen to use April and May for internal decision-making between Member States. One of the major initiatives discussed is the Commission Retail Investment Strategy, which saw a lukewarm proposal to ban some kickbacks paid for financial advice where actually no such advice is given. In a full day meeting next week, national officials will discuss alternative “value-for-money” experiences in Germany and Denmark, along with two Belgian drafts on disclosure of information to consumers and on how to test whether a product is suitable for a given retail client. The first draft scraps the disclosure of financial performance scenarios to consumers and limits the sustainability disclosure requirements to products that actually target a positive impact on the taxonomy objectives of “climate change mitigation” and “climate change adaptation”. For all other products, it will not be necessary to say that the product is 0% aligned to the two initial EU green objectives, and disclosure of the expected greenhouse gas emissions of the investment product is also not needed.
WHY GREENWASHING THREATENS FUNDAMENTAL RIGHTS
This week, MEPs in the Internal Market Committee were told why greenwashing is a risk to human rights – in short, because a clean, healthy and sustainable environment is essential to the enjoyment of a range of human rights, and greenwashing unfairly promotes not-so-sustainable products. In a recent report, the EU’s Fundamental Rights Agency explains that improved enforcement of consumer rights is essential to combat the rise of greenwashing. The report identifies gaps in existing laws and enforcement and recommends stronger sanctions for false green claims, and a requirement to remove misleading claims. To avoid additional “burden”, businesses should benefit from guidance on how to comply with environmental obligations. The agency also calls for a new holistic approach to consumer protection legislation. All negative impacts of a product on the environment that affect consumers, not just those related to physical danger, should be taken into account. Because of the link between environmental protection and greenwashing, environmental NGOs should be allowed to pursue legal action on these matters, just like consumer associations.
LIBERALS AND GREENS SEE INCREASE IN SEATS FOR THE FIRST TIME IN MONTHS
As Europeans welcome back spring, the European Parliament’s liberal party Renew Europe welcomes back its third place in the latest polls. The most recent data show a stop to the continuous growth of far-right parties for the first time in recent months, as these parties see a decrease in projected seats. However, despite the liberals slight growth this month, the race for the third place is likely to continue. There are only six seats difference between Renew Europe and Identity and Democracy (ID), and one seat difference between the ID and European Conservatists and Reformists (ECR). The Greens have also gained additional seats in comparison to previous polls, and now estimated to send 52 MEPs to Strasbourg/Brussels, still 20 seats down from their 2019 record of more than 70 seats. The Left continues to be the smallest European Parliament party, even if they are growing compared to the 2019 elections.