Fewer or more consumer rights for a more sustainable world?

Better informed consumers in a (more) eco-friendly economy

Consumers must be correctly and sufficiently informed about the environmental impact of the products they buy. Some studies have shown that 62% of consumers say they are willing to adjust their purchasing behaviour to reduce climate impact and 70% say they are willing to pay higher prices for products that are better for the environment.1 Manufacturers are already responding by increasingly indicating on their packaging and in advertisements that their products are - in some way - environmentally friendly choices. However, this leads to several problems. There is, for instance, an abundance of labels and claims (more than 200 in the EU) - some legislatively required, others issued by (independent) third parties, but still many self-declared. In addition, clear standards or references for claims are often lacking. Lastly, a significant proportion of claims appears too vague and general, and it is not always clear to consumers what the environmental claim actually means. The resulting effect is that companies' labels sometimes wrongly convey an environmentally friendly image (so-called 'greenwashing'), and thus (may) mislead consumers.

To combat this, one of the proposals the European Commission is working on, is a Proposal for a Regulation on Ecodesign for Sustainable Products2 . With the exception of some product categories, such as food, animal feed and medication, this proposal applies to all tangible products placed on the market or put into service, including components and intermediate products. This proposal imposes for instance 'digital product passports' providing reliable information on the environmental sustainability of products (instructions for repairs, energy efficiency, carbon footprint, expected waste from the product, presence of concerning substances, etc.).3 It should help consumers and businesses make informed purchasing choices, enable more repairs and recycling, and provide more transparency regarding the environmental impact of products. Product passports should also help public authorities in performing their inspections.4

In addition, the proposal provides labelling requirements, stipulating which environmental aspects must be indicated on the label. If applicable, the “performance class” with regard to this environmental aspect (think of the current ‘Energy label’ from A+++ to D) should also be indicated, making it easier for consumers to compare products.5

In a second phase of the legislative process the European Commission will determine requirements for the digital product passports and labelling for the different product categories.

Additionally, there is a Proposal to amend the Unfair Commercial Practices Directive and the Consumer Rights Directive.6 The aim is to improve consumer information (e.g. on the durability and repairability of products) but also to protect against unfair practices, such as 'greenwashing' (misleading environmental claims), the premature failure of products, etc.

Whereas today there is room to debate whether environment-related information is one of the ‘main characteristics’ of the goods (which is a requirement to prohibit misleading in this regard), such debate is now avoided, as the proposal explicitly indicates the ‘environmental or social impact’, ‘durability’ and ‘repairability’ as the ‘main characteristic’ of the goods. Therefore, a company misleading a consumer about these environmental attributes and thereby influencing their purchasing decision deals in unfair commercial practices.7

In addition, some very specific and new rules are proposed. The proposal provides some practices that would be prohibited in all circumstances (new ‘blacklisted practices'), for example:

• Displaying a sustainability label which is not based on a certification scheme or not established by public authorities.
• Making a generic environmental claim for which the trader is not able to demonstrate recognised excellent environmental performance relevant to the claim;
• Omitting to inform the consumer that a software update will negatively impact the use of goods with digital elements or certain features of those goods even if the software update improves the functioning of other features;
• Omitting to inform the consumer about the existence of a feature of a good introduced to limit its durability.
• Inducing the consumer into replacing the consumables of a good earlier than necessary for technical reasons;
• Etc.8

In addition, the pre-contractual information requirement would be tightened. Before concluding the contract, a company would be obliged to inform consumers about, among other things:

• The repairability of goods via a repairability score, or if this is not applicable: information on the availability of spare parts (including the ordering procedure thereof), and of a user and repair manual;

• The existence and duration of the producer's commercial guarantee of durability (if for the entire good and a duration of more than 2 years);
• Etc.9

The right of withdrawal vs. the fight against the disposable society?

In addition to introducing new (information) rights, there is the question whether other (curbing) measures may also be necessary to make the consumers' purchasing behaviour more durable. E-commerce has boomed in recent years and has a significant impact on climate. Some of the consequences are positive: a decrease in energy consumption for the construction and maintenance of physical buildings, less consumer traffic to physical shops, etc.  But other consequences of e-commerce are more detrimental: prevention of efficient and economical transport to accommodate ‘fast deliveries’, using more packaging material, a tendency to over-consume, etc.

When consumers exercise their right of withdrawal as regards online purchases, it often has dire consequences. In the EU, consumers have the right to withdraw their online purchase within 14 days of receipt. With a few exceptions (such as custom-made or perishable products), this is an almost unlimited right, and the consumer doesn't have to provide justification. Although the seller may charge the consumer with the actual cost for sending and returning, many sellers offer both free of charge.  Consequently, any threshold to limit consumers from excessive ordering and returning is removed. Not only does this lead to unnecessary transport and packaging, but also to mass destruction of returned goods, in part, because it is too expensive for many companies to inspect, repackage, and resell the goods and/or because offering a ‘second-chance’ product at a discount would not fit within the brand's image.10 Such practices are incompatible with the ambition for a more sustainable economy.

Hence, proposals to reform the consumers' right of withdrawal are being discussed. One of the suggested measures is prohibiting a right of free return for withdrawals (although, a free solution in the event of a non-conforming delivery should remain). Currently, the seller may charge the actual cost of returning the products to the consumer, but many sellers, especially big players, offer free returns for commercial reasons.

In addition, the costs a seller may charge for a withdrawal could be expanded. At present, the seller may only charge the actual costs of the return shipment, while the costs of resale after a withdrawal are more significant. For example, there are calls for mandating an optional right of withdrawal where consumers should be given the choice to buy the product without the right of withdrawal at the regular price, or with the right of withdrawal at a higher price.

Another option is to exclude the right of withdrawal when the consumer has treated the good beyond what was necessary for testing, and that, the product has diminished in value. Under current legislation, the consumer may still withdraw the purchase in that case, but the seller may charge the consumer for the value decrease. However, in reality this does not happen for practical and commercial reasons. The fact remains that products are returned and often destroyed. An exclusion of the right of withdrawal in this situation, would make consumers more conscious of their purchase and return decisions.

Currently, there are no concrete legislative proposals at European or Belgian level that would restrict the right of withdrawal. With regard to companies, however, there is an actual proposal from the European Commission to prevent the destruction of unsold products.11 Large companies12 would have to publicly provide information on the unsold products they discard (e.g. via a website): How many products do they discard per year? What are the reasons for discarding? How many discarded products were shipped for reuse, re-manufacturing, recycling, energy recovery and disposal operations? With this proposal the Commission also has the option to outright prohibit the destruction of unsold consumer goods if the destruction of a specific product category has a ‘significant environmental impact’.

In short, to effectively achieve a more sustainable economy, companies need to take action (such as offering more transparency regarding their environmental performance), but consumers, too, need to be encouraged to drastically change their purchasing and return behaviours.

• 1IBM and NRF, 'Research Insights. Consumers Want it All: Hybrid shopping, sustainability, and purpose-driven brands' (2022), p. 9 (https://www.ibm.com/downloads/cas/YZYLMLEV).
• 2Proposal for a Regulation on Ecodesign for Sustainable Products, Commission 30 March 2022, 2022/0095, https://environment.ec.europa.eu/system/files/2022-03/COM_2022_142_1_EN_ACT_part1_v6.pdf
• 3Articles 5 and 7 of the Proposed Regulation on Ecodesign for Sustainable Products.
• 4Recital 26 of the Proposal for a Regulation on Ecodesign for Sustainable Products.
• 5Articles 14 and 15 of the Proposed Regulation on Ecodesign for Sustainable Products.
• 6Proposal for a directive amending Directives 2005/29/EC and 2011/83/EU as regards empowering consumers for the green transition through better protection against unfair practices and better information, Commission 30 March 2022, 2022/0092.
• 7Article 1 of the Proposal for a Directive amending Directives 2005/29/EC and 2011/83/EU.
• 8Annex to the Proposal for a directive amending Directives 2005/29/EC and 2011/83/EU.
• 9Article 2 of the Proposal for a directive amending Directives 2005/29/EC and 2011/83/EU.
• 10The total value of destroyed textiles and electronic products in the EU alone is estimated at €21.7 billion in 2022. See the study by Lund University (International Institute for Industrial Environmental Economics (IIIEE)) ‘Product destruction: Exploring unsustainable production-consumption systems and appropriate policy responses’, https://www.sciencedirect.com/science/article/pii/S2352550922003050?via%3Dihub#bb0080
• 11Article 20 of the proposed Regulation on Ecodesign for Sustainable Products.
• 12Article 20 of the proposal does not apply to SMEs.