Investors want best-of-the-best ESG data. Here’s how to give it to them.

One of the main criticisms leveled against ESG investing is that the movement is all talk, no action. The main reason for this is that there simply aren’t enough entrepreneurs providing adequately ESG-aligned investing opportunities. In fact, a third of VCs face difficulties with identifying suitable ESG investment opportunities, even though 97% of them find it important in making investment decisions, driven by the lack of adequate ESG disclosures and excessive costs for gathering and analyzing ESG information.

At the same time, ESG-focused assets under management are projected to increase from $18.4 trillion to $33.9 trillion in the coming years. Whether these figures become reality is increasingly up to entrepreneurs who need to get serious about delivering high-quality ESG data, fast.

There simply aren’t enough entrepreneurs providing adequately ESG-aligned investing opportunities.

Choose the right disclosure framework

Investors have lower levels of confidence in companies that do not collect investment-grade data (shorthand for data that meets high standards of timeliness, accuracy, completeness and auditability), and the majority of investors see unstandardized and poor quality data as their biggest barrier.

Regardless of your market and industry, the best way to get started with delivering investors with high-quality data is to embrace preexisting reporting and disclosure frameworks as early on as possible. There are many frameworks to choose from, including Sustainability Accounting Standards Board (SASB), Global Reporting Initiative (GRI), Task Force on Climate-related Financial Disclosures (TCFD), CDP (originally known as the Carbon Disclosure Project) and United Nations Global Compact (UNGC). Although founders may need to carefully consider which framework to prioritize in the beginning, most of the frameworks are complementary in nature and mature firms tend to lean on several of them in their reporting.

For example, the GRI framework examines a company’s influence on the broader economy, environment and society to identify material concerns, while SASB is more tuned to serve the interests of investors who are interested in ESG data that could significantly affect the financial performance of firms in their portfolio. In short, GRI is an ‘inside-out’ framework that examines the company’s impact on the world, while SASB is an ‘outside-in’ framework that looks at the effects of the climate on the company and the risks it faces.

What ends up working best for any given company at any particular time will be down to a number of unique factors, and effective prioritization is key.

When eyeing an IPO, make aligning with TCFD your first priority

The Securities and Exchange Commission (SEC) introduced a proposed set of rules concerning mandatory climate disclosures last year. Under the proposed rules, firms who file with the SEC need to disclose a number of data points, including whether climate-related events are likely to push the needle on any of the accounts in its financial statements and what governance structures are in place to mitigate against climate risks. The disclosures envisioned in SEC’s proposal are largely in line with those of the TCFD and Greenhouse Gas Protocol, and if you are gearing up for an IPO, you would do well by ensuring that your ESG data is aligned with these frameworks as a matter of priority.

Investors want best-of-the-best ESG data. Here’s how to give it to them. by Jenna Routenberg originally published on TechCrunch

Startup says the seaweed blobbing toward Florida has a silver lining

A brown macroalgae native to the Atlantic’s Sargasso Sea is increasingly a menace to coastal ecosystems and communities across the Gulf of Mexico, ever since mats of the normally beneficial seaweed (known as sargassum) exploded in numbers in 2011. This is the backdrop for Carbonwave, which recently raised $5 million to put the hulking algae blooms to good use.

Researchers say farm and sewage runoff is likely driving the now 5,000-mile-wide “Great Atlantic Sargassum Belt.” Climate change may also be playing a role.

There’s no need to run screaming from sargassum, despite the tone of some stories covering the Florida-bound blooms. Still, they pose a threat to coral reefs and tourism-dependent livelihoods alike. When the stuff piles up on beaches, it rots, emitting skunky hydrogen sulfide. 

The recent sargassum surges are forcing folks to find creative ways to get rid of it, and already, possible applications run the gamut. Researchers and entrepreneurs aim to turn it into syrup, bricks and even jet fuel. As for Carbonwave, the Boston- and Puerto Rico–based startup is using it in fertilizer, cosmetics and even faux leather.

Backed by ESG-themed investment firms and Viridios Capital, as well as ocean-focused VC Katapult, Carbonwave says the new cash will help it scale production of its seaweed-based emulsifier for cosmetics. The startup said in a statement that it “has already sold half a ton” of its emulsifier, which it created as an alternative to petroleum-based ingredients. The company also claimed that its sargassum fertilizer “reduces the need of” climate change-driving nitrogen fertilizer.

CEO Geoff Chapin said Carbonwave makes these products through a “proprietary extraction process,” which involves pressing the seaweed and removing the arsenic. The process yields a liquid fertilizer, while the leftover pulp forms the basis for the emulsifier and fake leather. The way Chapin tells it, the company uses “almost every part of the seaweed to make these products.”

Carbonwave is part of a wave of startups vying to turn algae into environmentally friendlier products. For starters, there’s H&M-backed Algiknit (now Keel Labs), which creates textiles; a slew of bioplastics companies, including Loliware and ULUU; and a firm called Umaro, which makes sea-bacon. Seaweed startups often focus on commercializing kelp in one way or another, but a few (like Carbonwave and Seaweed Generation) focus on sargassum.

“We need to put it to good use before it creates more ecological and climate harm,” Carbonwave told TechCrunch. 

The startup added that it topped off its $5 million Series A with additional funding. It’s secured at least $12 million to date.

Startup says the seaweed blobbing toward Florida has a silver lining by Harri Weber originally published on TechCrunch

IntegrityNext raises $109M for a platform to audit supply chains for ESG compliance

The funding landscape remains very tough for technology startups, but there are still some pockets, and specific companies, driving a lot of interest right now among investors because they look like they’ll break through whatever current macroeconomic trends that are gripping the world. Today, a startup out of Munich called IntegrityNext announced that it has raised its first-ever funding, an equity round of €100 million ($109 million), for a new twist on supply chain software: a platform that helps organizations with lots of suppliers automatically audit and monitor those companies for compliance with environmental and sustainability governance (ESG) rules — both those that companies set for themselves, as well as those coming from a growing body of regulation.

The funding is coming from a single investor, EQT Growth, and it will be used to continue building out the breadth of the platform but also the company’s go-to-market position: it has a growing number of customers — and there are even a fledgling number of would-be suppliers — across the U.S. and Europe, and so the plan is to build more capabilities to meet that opportunity. Those capabilities will stay in the areas environmental and ethical labor commitments, and for now there are no plans to loop in audits around, say, whether a supply chain implicates a company in the act of breaking embargoes on countries over political disputes or issues of national security.

The crux of the product is a platform that acts like a big data ingestion engine sourcing information that is publicly available, to help develop risk profiles for different markets and different companies, complemented by regular contact with businesses in the supply chain to supply details. This all gets compiled into a database that then provides a warning system and audits for IntegrityNext’s customers to better understand what is going on in their supply chains. What they do next is up to those customers, though: they can then use this to help either require their partners to change, or to change partners, or send in human auditors for deeper investigations, or I guess nothing at all. But ultimately, this is about building a way to manage what might be thousands of suppliers for some companies.

“You have to find an efficient way to manage that,” said Dominik Stein, a partner at EQT Growth. “You can’t go to every company and do every check yourself, it just doesn’t work.” (Stein’s joining an advisory board with this round.) From what I understand, a typical customer might pay $60,000/year for the service, but the figure could be significantly higher or lower depending on the size of the supply chain.

IntegrityNext, and this round, are part of that group of startups that have grown impressively over several years, but under the radar. The startup has been profitable since 2004, and until now it’s been completely bootstrapped. On its own steam, it’s picked up a 200-strong list of enterprise customers, including Siemens Gamesa, Infineon and SwissRe, with a supply chain database that monitors close to 1 million suppliers across 190 countries. According to CEO Martin Berr-Sorokin — who co-founded the company with Simon Jaehnig (CRO) and Nick Heine (COO) — the decision was made to raise now to essentially strike while the iron is hot.

The company had never taken outside funding, but it had no shortage of inbound interest, he said, and the state of the market and the fact that raising might not be as easy later swayed things.

“We wanted to have a strong partner for next growth phase,” Berr-Sorokin said in an interview. “We were getting to the next phase we need support for hiring, extending our network, sales and marketing, and going into new markets in Europe and the U.S. We didn’t have to do it. It was an option, and we feel lucky to have done it.”

ESG is rapidly evolving as a market opportunity at the moment. On one hand, consumers, thanks in part to social media, have become significantly more aware of how a businesses’ supply chains might effectively paint that business with the tar of labor exploitation and poor environmental practices, and that is putting a lot of pressure on those businesses to do better. The businesses themselves, meanwhile, are at the end of the day run by humans. Some may be hard-nosed when it comes to getting business done at any cost, but a good number have a conscience and want to do right by that, not just for the sake of appearances.

On the other hand, there have been notable developments playing out in the regulatory realm that might make whatever “nice to have” that has swirled around ESG into more of a “must do.” In Germany, companies with more than 3,000 employees are required to provide audits and reporting to demonstrate their own ESG compliance — compliance set by regulators — lest they face fines and other penalties. That number is coming down in 2024 to 1,000 employees. And in Europe there is regulation in progress that will place similar requirements on EU companies, bringing down the number of employees even more, to 250.

And that opportunity is definitely one being spotted by others: Worldfavor and Prewave are also building platforms that automate the process of businesses auditing and monitoring suppliers. Others like Salesforce have started to put ESG supplier monitoring into their sustainability product sets, and a startup in France, Sesamm, is building AI tech to help companies with their sustainability commitments.

That’s not the whole story, though: there will be inevitable pushback on these regulations, and there is a big question mark over how all of this will play out in one of the biggest and most industrialized nations in the world, the U.S., where some legislators have floated the idea of not only staying away from any regulation of this kind, but even proactively discouraging developments on this front as counter to economic progress. Businesses are also not all on board.

“Yes, some companies complain but others see it as a competitive advantage to be good in ESG,” said Berr-Sorokin. “Of course the regulatory regime helps us but if it gets pushed back we still have trends in our society and good corporate practices.”

IntegrityNext raises $109M for a platform to audit supply chains for ESG compliance by Ingrid Lunden originally published on TechCrunch

Lun is in a mad rush to help heat-pump installers decarbonize homes

Lun, a climate tech startup out of Denmark, is on a mission to help homes decarbonize fast — starting with heating systems and swapping out boilers for electric heat pumps.

What are heat pumps? The technology is a low carbon form of heating which is based on the principle of refrigeration that offers an alternative to environmentally unfriendly options like oil and gas-fired boilers. At a basic level, heat pumps work by using electricity to transfer heat from one place to another, so they’re able to both heat a house in winter and cool it in summer (or at least up to a balance point at which a supplemental system may be required).

There are several different types of heat pump (air-source, water-source, ground-source etc); and installations need to start with an assessment of the property which needs to consider a variety of factors before being able to go ahead — such as which type of pump is appropriate to the given property, land and climate; where to site units and components and whether to reuse elements of an existing heating system; how well (or poorly) insulated the property is; and even whether the heat pump brands a particular tradesperson prefers to work with are appropriate for the job in question.

The need for all this detailed up-front assessment complicates the sales process for heat pump installations — and that, in turn, slows down the decarbonization of households. Since in-demand plumbers and electricians may simply decide it’s easier to focus on other types of work (including, climate-horror-of-horrors, installing more fossil fuel burning boilers that pump CO2 directly into the atmosphere).

Helping redirect the energy (ha!) of installers towards decarbonization via fitting more heat pumps is what Lun hopes to do by building a platform for tradespeople — which it dubs an installation “operating system” — to provide them with “full stack” support so they can get on with ripping out boilers and replacing them with heat pumps. And, as they earn money doing that work, help decarbonize the planet faster.

Its software, which is currently in an alpha release with an undisclosed number of testers in Denmark, aims to take some of the strain out of installation assessments, design and planning, as well as handle other business elements like taking payments. It’s providing tradespeople with a suite of tools for gathering relevant data from householders and automating suitability assessments — doing the latter by drawing on public and/or open data (such as satellite imagery), as well as feeding in data from OEMs (such as price, specifications), as well as property type/location etc, to try to find the best match between a job and a professional installer.

“We start very small,” says co-founder and CEO Martin Collignon. “We start with where they lose the most time — which is in sales. Many of them go visit homes way too early, before they actually know whether the customer is interested or not. Or whether the house is relevant or not. And that’s what we focus on and then we build on the the entire stack all the way to payment… to make sure that they’re supporting every part of the journey. And they could focus on what they’re good at, what they trained at, and what they earn money on — which is installing the heat pump.”

“We want to make them more efficient,” he continues. “So right now around 40% of the time spent on heat pump sales and installation is spent on not installing the heat pump… So we just want them to be able to do more heat pump installations, over the year, because they have less of the other stuff to do — the sales, the design, the procurement, the financing, the paperwork, the compliance work, finding other [tradespeople]… all these things.

“We want to make it automated, with the technology in there, so they don’t have to spend time doing that… And the result of that is that doing heat pump work will be at least as profitable as the other task — and hopefully more profitable — so they can focus on heat pumps because it’s just a great job for them. So it’s not as much of a pain in the butt as it is today.”

“It’s an industry that is less digitalized than most… and our goal — and what we really focus on — is [building] a product that they see as a no brainer,” Collignon adds.  “That’s really the challenge because they’re busy enough. So we really need to build something that they love. And that’s what we focus on right now.”

Heat pumps are also just the start for Lun — as he says the big vision is for the platform to support tradespeople who’re able to apply a full sweep of renewable and decarbonizing technologies. Whether that’s installing electric charging points for vehicles, fitting PV panels to generate solar energy, or electrifying stoves. (In some rural regions of Europe solid fuel and/or wood burners for home heating are still absolutely a thing!)

Other startups are also looking to grease the pipe of household renewables — from the likes of Germany’s Zolar, Spain’s Samara, US-based OpenSolar or Are Solar, to name a few (there are also others focused on HVACs, such as US-based Conduit Tech) — but such is the scale of humanity’s home decarbonization task it’s going to take several villages’ worth of startups attacking the problem from as many angles as possible as fast as humanly possible. Or, as Collignon says, the more the merrier.

“We focus on heat pump now but our goal, our mission is to decarbonise homes faster in general,” he tells TechCrunch. “Heating is the major lever — that’s 80% of the energy consumption — but there’s a bunch of other things that we need to think about.

“So the goal really is that we can be the platform that all the tradespeople that want to aspire to be professionals in renewable technologies and decarbonisation technologies for buildings they can use that platform. And we focus very much — and will focus for a long time — on retrofits. So that’s taking the old buildings that we have and making them modern, more clean, more affordable [not dependent on] of fossil fuels that come from bad places around the world, basically.”

The Copenhagen-based startup was founded at the end of March last year, shortly after Russia invaded Ukraine. The war triggered a major crisis around Europe’s energy needs, amping up the argument for transitioning away from gas — now on geopolitical grounds, as well as the climate crisis. The Ukraine war was the final catalyst for the co-founders to formally incorporate Lun, per Collignon.

He’s a climate activist turned tech founder who before all this worked in the tech industry — for giants including Google and Uber. But after several years of grinding away at the Big Tech coalface he says he got “very, very badly” burnt out and decided to refocus his priorities. Then, along with his co-founder Anders Valentin — who brings a background in insurtech to the venture; and was a friend of Collignon from their business school days — the pair set about figuring how they could make maximum impact in the climate fight. Fast. And they landed on streamlining the installation of heat pumps.

“The simple reason we looked at heat pumps was it was mentioned in all the climate reports — you could find from the IPCC to the IEA to the European Union, everything — everyone mentioned heat pumps. But when we started looking at it, a bit more than two years ago, it was still a very niche technology where demand was the main issue but we knew from all these reports that they would change, hopefully soon, to a supply problem,” he explains, fleshing out their rational for starting with what’s still a pretty unfamiliar technology in many European markets. (Figures for installations can vary considerably depending on the country but overall numbers are still low; market data from the European Heat Pump Association puts the total figure of regional installation at 16.98 million or around 14% of Europe’s heating market.)

“So we started looking at what will be the issue — not now but really in five, seven years from now — for the industry. And it became very clear that [tradespeople] would become — very fast — a bottleneck… Plumbers is already the profession that we lack the most in Europe, way ahead of software engineers, for example. So we were really thinking it seems unlikely that we’re going to get more [tradespeople] before 2030 if you look at all the reports, so the only way we could solve this is really make the task of installing renewable technology into something more interesting — more economically viable — for these [tradespeople]. Because, if you think about it, they can do a bunch of other things… So that’s how we started looking at the problem. That’s what we’ve been doing since.”

Lun is being buoyed up in its decarbonization mission by closing a new round of funding — €10.3M in seed funds, which it’s announcing today — topping up a €550k pre-seed it raised previously to build its MVP. The seed funding comes from new investors including Norrsken VC, Partech, Lowercarbon Capital, and MCJ Collective as well as existing investor Foundamental. (Xoogler Ventures and other angel investors also backed its pre-seed.)

The funds will go on continuing to build out the product — making sure it delights the target user so they can get more of the critical tradespeople on board. Lun is also eyeing European expansion and Collignon notes it has an early partner in Austria so that is likely to be one of the next markets.

Commenting on the seed funding in a statement, Chris Sacca, founder of Lowercarbon Capital, said: “Getting off gas for heat isn’t just critical for the climate, if you live in Europe it’s the patriotic thing to do, and Lun is the cheapest, fastest, and easiest way to get an electric heat pump installed.”

“Changing the way we consume energy in our homes should be a top priority for everyone for many different reasons: Climate, health and economic well-being,” added Agate Freimane, Norrsken VC, in another supporting statement. “We were impressed by Lun’s speed of execution and excited to be supporting them on their journey.”

Foundamental’s Patric Hellermann dubbed electrifying buildings “top of mind” in the climate fight — with the “No.1 bottleneck” being making more installer-time available — going on to pronounce that Martin and Anders “have cracked that code with their software” in another statement.

Lun is a for-profit venture, despite its high worth climate mission. So what’s the business model? That’s still a work in progress, per Collignon, who says it’s exploring different revenue streams — potentially a subscription fee or a transaction model. He suggests they could also look to tap revenue streams around financing or even the heat pump hardware itself. “Your heat pump is quite an expensive thing — that can cost between €15,000 to €25,000 in many, many places. So we think there’s different ways where you can take a small cut of that. Basically, if you make things more efficient,” he adds.

When does he predict a tipping point for consumer uptake of heat pumps? And a mass move away from fossil fuel burners that we all desperately need to see happen ASAP. “When it’s worthwhile for consumers,” he responds on that. “I’ve worked in climate tech for quite some time and… it’s always the technology that makes it affordable for consumers that wins, basically, not the one that’s the greenest. So we need to make sure that it’s economically advantageous to instal heat pumps — and to instal these technologies more than anything else.

“I believe that when that will happen is when it becomes worthwhile. Which it was last year — when the gas prices were insane. And then now we see some countries moving with certain bans [on installing gas boilers after particular cut-off dates] and certain de facto obligations to instal heat pumps as your next in technology. Then that’s of course a game changer. And I believe that’s going to happen in more places.”

Another decarbonization ‘lever’ Collignon says he’s personally fought for in Denmark is making sure the “externalities of using fossil fuels are priced correctly”, as he puts it. Or reform of energy markets and taxation systems to support consumers to make green choices — so there’s definitely work for regulators to be getting on with here too. “Make sure you have a carbon tax that reflects the impact on the climate, basically, and if that happened, then be very obvious very very, very fast that it’s a lot better to use a heat pump — economically, for climate, for geopolitics etc — than it is today,” he adds.

Lun is in a mad rush to help heat-pump installers decarbonize homes by Natasha Lomas originally published on TechCrunch

Europe tools up for the repairable future

The European Commission has laid out another piece of its Circular Economy Action Plan today — adopting a proposal to set common EU rules which are intended to make it easier for consumers to get faulty products repaired.

The “right to repair” measures are aimed at reducing e-waste by preventing repairable products from being prematurely junked.

A Commission proposal last year set out to expand the bloc’s ecodesign rules. The right to repair rules are designed to build on that. The EU wants the full sweep of policies to promote longer tech product lifespans to boost sustainability and work toward its headline goal of being carbon neutral by 2050. (Aka the European Green Deal.)

Goods for which EU reparability requirements currently exist include household washing machines and washer-dryers, dishwashers, refrigerating appliances, electronic displays, vacuum cleaners, and servers and data storage. But mobile phones, cordless phones and tablets are slated to soon be added to the list — once respective ecodesign reparability requirements are adopted by the bloc’s lawmakers. So the consumer electronics industry is certainly in the frame.

A right to repair for consumer kit including mobiles and tablets was floated by the Commission back in 2020 — when the EU’s executive said electronics and ICT would be a priority for the expansion of the Ecodesign Directive to help tackle the growing scourge of e-waste.

Today’s package of measures propose a supportive framework to wrap around specific reparability requirements and encourage the development of the necessary services.

“Over the last decades, replacement has often been prioritised over repair whenever products become defective and insufficient incentives have been given to consumers to repair their goods when the legal guarantee expires. The proposal will make it easier and more cost-effective for consumers to repair as opposed to replace goods,” the Commission wrote in a press release. “Additionally, more demand will translate into a boost to the repair sector while incentivising producers and sellers to develop more sustainable business models.”

The proposed measures include a new consumer right to repair both for products that are under guarantee and those no longer covered by a legal guarantee.

“Today’s proposal will ensure that more products are repaired within the legal guarantee, and that consumers have easier and cheaper options to repair products that are technically repairable (such as vacuum cleaners, or soon, tablets and smartphones) when the legal guarantee has expired or when the good is not functional anymore as a result of wear and tear,” the Commission suggested.

For covered tech products still under warranty, sellers will be required to offer repair except when it is more expensive than replacement. While, beyond the legal guarantee, the Commission said EU consumers will get a new set of rights and tools to “make ‘repair’ an easy and accessible option”.

Here’s a summary of the main measures in the Commission proposal:

  • A right for consumers to claim repair to producers, for products that are technically repairable under EU law, like a washing machine or a TV. This will ensure that consumers always have someone to turn to when they opt to repair their products, as well as encourage producers to develop more sustainable business models
  • A producers’ obligation to inform consumers about the products that they are obliged to repair themselves
  • An online matchmaking repair platform to connect consumers with repairers and sellers of refurbished goods in their area. The platform will enable searches by location and quality standards, helping consumers find attractive offers, and boosting visibility for repairers. It will also enable consumers to sell used products to refurbishers
  • European Repair Information Form which consumers will be able to request from any repairer, bringing transparency to repair conditions and price, and make it easier for consumers to compare repair offers
  • European quality standard for repair services will be developed to help consumers identify repairers who commit to a higher quality. This ‘easy repair’ standard will be open to all repairers across the EU willing to commit to minimum quality standards, for example based on duration, or availability of products

Additionally today, the Commission announced measures targeting ‘greenwashing’ — via a Green Claims Directive — proposing common criteria for environmental claims by product manufacturers in a bid to combat the flood of misleading marketing that’s sprung up to feed off consumer concerns about climate change.

The bloc is already on the way to making USB-C a common charger standard after lawmakers backed a proposal to further shrink mobile e-waste last year.

Making ‘right to repair’ a reality

Speaking during a press conference to announce the dual proposals — both of which will need the backing of the European Parliament and Council before they can be adopted as EU law — the bloc’s justice and environmental commissioners, Didier Reynders and Virginijus Sinkevičius, said the measures are intended to work together to drive sustainability.

“This proposal is the latest in a series of measures to make the ‘right to repair’ a reality,” said Reynders. “First, we needed to ensure that there were more and more repairable products on the market. This is what we did with the proposal for a Regulation on eco-design, or eco-design of sustainable products… Secondly, it was also important to enable consumers to make sustainable choices based on reliable information.

“This is what we wanted to improve with the proposal “Empowering consumers for the green transition”, also adopted in March 2022. And finally, with the proposal for a Green Claims Directive… Our proposal is the last piece of the puzzle to ensure access to repair in the after-sales phase. To make repair easier, more accessible, and more attractive.”

The repair proposal aims to empower EU consumers to ask for a free repair of a faulty product when it’s under warranty (so up to two years after purchase) — which must be provided by the manufacturer if it’s less or the same cost as a full replacement.

In the case of goods that break down out of warranty, Reynders said the goal is to make it cheaper and easier for consumers to obtain a repair. A Commission Q&A on the plan suggests there will be an obligation on manufacturers to repair a product for 5-10 years after purchase (depending on the type of product) — unless a repair is technically impossible.

“The rule will be clear: The producer will no longer be able to refuse to repair your washing machine, unless repairing it is technically impossible. In other words, the producers will be obliged to look into the repair options,” he suggested. “This obligation will apply to goods that are repairable by design in the EU. Such as a washing machine, dishwasher or TV and soon also smartphones or tablets.

“This obligation will apply to the goods that are directly covered by any repairability requirements under EU law, such as the rules on Ecodesign. And we will continue to add more product groups to this list in the future, as we want Ecodesign products to become the norm. You can therefore notice the strong interconnection between today’s proposal and the Ecodesign proposal.”

“Producers will also have to inform consumers about this obligation and availability of their repair services so that consumers know about their rights,” Reynders added. “The producers will therefore be obliged to repair a product, even if the consumers caused the damage themselves. For this reason, producers can charge a price for repair.”

Per Reynders, the only scenario where a manufacturer will be exempt from the obligation to repair is when repair is impossible — such as when the goods are damaged in a way that makes repair technically unfeasible.

He said the proposal aims to open the door to the development of the repair sector — since consumers will not be obliged to go only to the manufacturer for a repair.

“They will also be able to turn to independent repairers and find other repair services that better meet their needs or offer more attractive options,” he added. “We are therefore removing the obstacles that still deter too many consumers from having repairs done. The obligations and solutions we are presenting with this text will help to reverse this trend.”

A Q&A at the end of the briefing raised questions about the cost of repair — with a member of the press pointing out that cost frequently puts consumers off from trying to repair an item vs buying a new one. On this, Reynders said last year’s Eco Design proposal will be key — suggesting that, over time, it will drive down the cost of repairs by requiring manufacturers to bake repairability and sustainability into product design.

“It means that it’s possible to really cut significantly the cost of repair,” he said. “If a product is designed to be repairable, if there’s access to different parts, components, if you can open up a device. Because often — in the sound sector for example, audio equipment, it is not possible to actually open up a device — you can’t actually get inside it yourself. So the Eco Design approach should simplify things there.”

Bye-bye greenwashing?

On greenwashing, the EU’s proposal aims to introduce “minimum requirements” for businesses that make voluntary environmental claims — in the areas of substantiation, communication, and verification.

“Companies will have to ensure the reliability of their voluntary environmental claims, and communicate their claims in a transparent way. Their claims will need to be checked by an independent verifier against the requirements of the Directive. The verifier will then issue a certificate of compliance recognised across the EU,” the Commission said in a Q&A on the Directive.

“By putting in place this common set of rules within the EU internal market, the proposal will give a competitive advantage to companies who make a genuine effort to develop environment-friendly products, services and organisational practices, and lessen their impact on the environment,” it also suggested, adding that it expects the directive to reduce the risk of legal fragmentation of the single market and save costs for businesses that have their claims certified by an accredited verifier — as well as boosting the credibility of European industries abroad.

“If you make a claim as a company, you will need to be able to prove that claim,” said Sinkevičius, speaking during today’s press conference. “So you will have to show that it’s based on science. And that it is reliable. You will have to be specific and you will need to submit your claim for checks by accredited verifiers to ensure it complies with the new directive — and of course you will need to communicate this information in a manner that’s clear and transparent.

“Taken together, these actions should prevent misleading claims from reaching consumers. They will also make life easier for consumers protection authorities once the claim appears on the market.”

Additional measures in the Commission proposal aim to rein in the proliferation of eco labels that have sprung up touting eye-catching green claims to reel in environmentally conscious consumers. “There are around 230 environmental labels on the EU market and no wonder that consumers are confused,” added Sinkevičius. “This proliferation also hinders sustainable business operating across borders and fragments our single market.

“Under new rules we will only allow new public schemes that work at the EU level. We have to mobilise the resources. We have to work together on reliable EU labels — such as the EU Eco label — and if companies want to bring in new private scheme it will need to be better than the ones that are already in place. So there should be a place for labels that show exceptional performance on environmental sustainability but only in well justified cases.”

The proposal comes armed with “teeth”, per the commissioner — who said Member State agencies will be empowered to set “dissuasive” penalties for dyed-in-the-wool greenwashers.

During the Q&A, he was asked whether carbon offsets would be banned under the Green Claims Directive given many such schemes have been found to be worthless, at best. (And given offsetting does not actually reduce carbon emissions — whereas massive reductions in CO2 are absolutely required if humanity is to avoid climate disaster.)

Sinkevičius said the proposal would not ban carbon offsetting claims altogether. But he said “full” information would have to be provided to consumers to stand up the claims being made and also provided to an independent verifier to check such projects are delivering as claimed. 

Europe tools up for the repairable future by Natasha Lomas originally published on TechCrunch