COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Accompanying the document Communication from the Commission to the European Parliament and the Council Building the Single Market for Green Products: Facilitating better information on environmental performance of products and organisations
Date: 2013-04-09
Institutions: European Commission
Subjects: consumer information, eco-label, environmental impact, marketing standard, organic product, single market

EUROPEAN 
COMMISSION 

Brussels, 9.4.2013  
SWD(2013) 112 final 

COMMISSION STAFF WORKING DOCUMENT 

EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT 

Accompanying the document  

Communication from the Commission to the European Parliament and the Council 

Building the Single Market for Green Products: Facilitating better information on 
environmental performance of products and organisations 

{COM(2013) 196 final} 
{SWD(2013) 111 final} 

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COMMISSION STAFF WORKING DOCUMENT 

EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT 

Accompanying the document  

Communication from the Commission to the European Parliament and the Council 

Building the Single Market for Green Products: Facilitating better information on 
environmental performance of products and organisations 

1. 

1.1. 

PROBLEM DEFINITION 

The  underlying  issue:  the  proliferation  of  methodologies  is  hampering  the 
functioning of the market of green products 

Many  methodologies  are  available  and  used  to  assess  and  communicate  the  environmental 
footprints  of  products  and  organisations1.  Their  number  is  rapidly  increasing  leading  to  a 
proliferation  of  national2  and  private  sector  initiatives3.  Companies  are  in  principle  free  to 
choose  which  one  to  apply,  but  are  also  often  required  to  use  a  particular  one  either  by  a 
national  administration  or  by  clients  downstream  in  the  supply  chain.  If  a  firm  supplies 
several  other  firms,  then  it  may  be  asked  to  supply  environmental  information  in  multiple 
ways  implying  the  use  of  multiple  methodologies.  At  the  same  time,  there  is  no  natural 
coalescence around a single specific methodology.  

There are numerous voices from industry calling for a harmonisation of methods to assess the 
environmental performance of products in order to create a level playing field, reduce costs, 
and  prevent  free  riding.  Respondents  to  the  public  consultation  considered  the  lack  of 
consistency  as  one  of  the  most  important  barriers  to  the  display  and  benchmarking 
environmental performance (72.5% agreement). When asked about the drivers of the barriers, 
multiple initiatives in the EU (70.8%) and multiple ways of reporting (76.3%) received high 
agreement from stakeholders.  

1.2. 

(a) 

The scope and scale of the problem 

Additional costs for businesses 

The co-existence of different methodologies implies a direct increase of costs for those who 
want  to  assess  and  communicate  the  environmental  footprints  of  their  products  or 

1 

2 

3 

See a list of the most important (diverging) initiatives on the assessment of the environmental footprint 
of product and organisations in Annexes 17, 18 and 19. 
E.g. France is currently evaluating a pilot programme on product environmental labelling. Since 2008, 
private companies have been invited to participate in the programme to demonstrate and test concrete 
example of multi-criteria environmental labelling . A preliminary evaluation of agri-food products show 
that  75%  of  the  companies  involved  in  the  pilot  programme  intend  to  continue  with  environmental 
labelling  and  about  64%  are  in  favour  of  a  EU  harmonised  approach.  (http://www.developpement-
durable.gouv.fr/IMG/pdf/LPS125.pdf) Other initiatives exist in the UK, Switzerland, internationally in 
Japan, Australia and Canada. See Annex 19 for more details. 
E.g.  the  Sustainability  Consortium,  Envifood  Protocol,  GHG  Product  Protocol,  different  labels  and 
standards  (carbon  footprint,  LCA,  water  footprint);  Carbon  Disclosure  Project,  sustainability  indices, 
Global Reporting Initiative, etc. See Annexes 18 and 19 for more details.  

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organisations. The increase of costs is due to: (1) increase in training costs to be able to cope 
with the requirements of the different methodologies; (2) increase in costs related to gathering 
of  different  information;  (3)  different  labelling  requirements;  (4)  different  verification 
requirements. 

(b) 

Reduced opportunities for cross border trading of green products 

Given  the  lack  of  a  commonly  agreed  definition  of  green  products,  it  is  difficult  to 
substantiate the scale of intra-EU and extra-EU trade that is affected by this issue. However, 
surveys  suggest  that  90%  of  consumers  buy  green  products  at  least  sometimes,  of  which 
export  products  would  have  a  share.  Overall,  there  is  clearly  considerable  trade  in  green 
products, and this is likely to be increasing. However, the proliferation of methodologies may 
hinder this positive trend, reducing the opportunity of cross border trading of green products, 
because companies find that the requirements related to the environmental information for the 
products they intend to sell change across those borders. Increasingly, different environmental 
information is requested by national governments in the case of public procurement, reporting 
or labelling requirements, or by private initiatives, for instance by a retailer to let the product 
be displayed in stores. 

(c) 

Lack of clarity for consumer choices 

At  present,  consumers  have  very  poor  information  on  what  is  genuinely  'green'.  Without 
providing  this  information  in  a  trusted  way,  purchasing  decisions  are  distorted  and  many 
consumers  end  up  not  buying  green  products  despite  their  declared  intention  to  do  so.  This 
has been shown by a Eurobarometer survey: while 75% respondents say they are ready to buy 
environmentally  friendly  products,  only  17%  had  actually  done  so  in  the  month  before  the 
survey4. 

The number of green claims is growing, even if they are becoming more superficial and vague 
in  their  use  of  terminology,  further  deteriorating  consumer  trust:  48%  of  consumers  do  not 
trust environmental information on products5. People tend to distrust green claims, both those 
attached to products and those included in companies' Corporate Social Responsibility (CSR) 
or  other  environmental  reports6.  This  situation  penalises  those  companies  who  have  been 
investing  a  lot  in  improving  their  performances  and  greening  their  business  models.  The 
perception  is  that  companies  are  competing  on  the  basis  of  their  claims  rather  than  on  the 
basis of the underlying environmental performance. 

(d) 

Missed opportunities for resource efficiency  

The more proactive companies have understood the large margins for further efficiency gains 
along their supply chain and in order to exploit that they are more and more using life cycle 
management  approaches7.  Those  who  are  using  life  cycle  approaches  to  improve  their 
resource efficiency can also enjoy other benefits, like a better return on investment, develop 
new markets, improved corporate image, better customer loyalty, a better understanding of the 
risks across their full supply chain, and better product differentiation. 

4 
5 
6 

7 

Eurobarometer Attitudes of European citizens towards the environment, 2008. 
The Flash Eurobarometer 332 . 
The  second  Eurobarometer  survey  on  the  Attitudes  of  European  citizens  towards  environment  (2011) 
showed  a  decline  of  respondents  thinking  that  labels  on  products  allow  the  identification  of  those 
environmentally friendly (47% compared to 52%, scored in 2008). 
For a list of studies supporting this statement, please consult Annex 21. 

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More green products being sold on the market and more organisations getting greener would 
contribute  to  achieving  the  objectives  of  the  Resource  Efficiency  flagship  and  the  EU  2020 
Strategy. Although environmental reporting per se does not mean performance improvement, 
many of the companies measuring performance set up targets and actions. The low take up of 
green products has repercussions on the take-up of eco-innovation as well, putting at risk the 
competitive  edge  of  EU  eco-industries,  which  are  still  leading  globally  and  are  growing. 
Indeed,  green  technologies  have  been  identified  as  an  important  source  of  growth  in  the 
Industrial Policy Update8. 

2. 

ANALYSIS OF SUBSIDIARITY 

The proliferation of methodologies, the related difficulties and the increased costs calls for co-
ordinated EU action, as they directly affect the smooth functioning of the Single Market. If the 
EU  chooses  to  intervene  at  a  later  stage,  companies  will  have  had  to  comply  with  several 
methodologies  already,  bearing  the  cost  of  compliance;  national  administrations  will  have 
had  to  build  their  policy  implementation  structures  –  costs  that  could  have  been  foregone 
through earlier EU action. Thus action at EU level is justified now. 

The  EU  is  ideally  placed  to  promote  harmonisation  of  methodologies  across  the  Single 
Market,  relying  on  experiences  of  Member  States  and  private  initiatives  in  this  area  and  in 
discussion with the stakeholders. The EU can bring an important value added, as further co-
ordination  would  bring  significant  cost  savings  for  national  governments  and  the  private 
sector9. 

2.1. 

The inapplicability of the principle of mutual recognition 

In the absence of EU level rules, private economic operators as well as public authorities are 
free  to  adopt  and  apply  the  preferred  scheme  to  calculate  and  communicate  environmental 
performance. However, in case of a Member State, the regulatory flexibility is limited by the 
requirement that technical regulations are not prepared, adopted or applied with a view to, or 
with the effect of, creating unnecessary obstacles to trade. In the case of national regulations, 
the principle of mutual recognition is often the best way to ensure the free movement of goods 
within the internal market. However, it does not seem useful in this context because at present 
some  Member  States  do  not  even  have  methods  to  calculate  and  communicate  the 
environmental performance and in others the methods applied have different scope, ambition 
and rules. As a result, it is currently not possible to establish equivalence between them. 

In  addition,  mutual  recognition  would  not  remove  other  non-technical  hurdles  to  intra-EU 
trading:  even  without  legal  requirements,  exporters  will  need  to  use  the  communication 
methods familiar to consumers in the foreign market in order not to be disadvantaged vis-à-
vis local producers. 

3. 

OBJECTIVES 

The general objective of the EU action is to improve the availability of reliable information 
on the environmental performance of products and organisations.  

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COM(2012) 582 final, A Stronger European Industry for Growth and Economic Recovery - Industrial 
Policy Communication Update 
Interesting  to  note  that  the  UK  and  French  schemes  already  make  strong  cross-reference  to  EU 
developments  and  Italy  foresees  a  strong  link  as  well.  Member  States  appear  to  be  calling  for  a 
harmonised EC-level guidance/support on the assessment of the environmental footprint. See also the 
Council  conclusions  of  20  December  2010  inviting  the  Commission  "to  develop  a  common 
methodology on the quantitative assessment of environmental impacts of products, throughout their life-
cycle".  

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3.1. 

Specific objectives 

Promote  the  use  of  a  common  methodology  to  assess  and  communicate  the  environmental 
performance of products and organisations. 

3.2. 

Operational objectives 

The above specific objective can be broken down into operational ones as follows: 

Table 1 - Operational objectives 
Specific objective 

Operational objectives 

Promote the use of a 
common methodology to 
assess and communicate 
the environmental 
performance of products 
and organisations 

1. 

Launch two methodologies that are relatively simple to 
use, but also robust, one for the measurement of the 
environmental performance of products and one for the 
measurement of the environmental performance of 
organisations  

2. 

Encourage the take-up of the methodologies in Member 
States and by private actors 

3.  Develop product and sector specific environmental 

footprint category rules through an open, transparent, 
multi-stakeholder process 

4. 

POLICY OPTIONS 

4.1. 

Option 1. Baseline scenario – no policy change 

Without  further  EU  intervention  the  proliferation  of  private  and  public  initiatives  would 
persist. Although some spontaneous approximation of methods is expected to arise in widely 
covered  areas  such  as  Greenhouse  Gases,  companies  would  still  need  to  face  markets  with 
differing  requirements.  This  would  represent  a  particularly  heavy  burden  for  SMEs.  With  a 
confusing  range  of  information  available,  private,  public  and  business  consumers  would 
continue to mistrust green claims regarding environmental performance. 

4.2. 

Option 2. A new mandatory product policy framework  

A new EU legal framework for sustainable products will replace and consolidate the existing 
product-related  policy  instruments  included  in  the  2008  SCP/SIP  Action  Plan  (such  as  for 
instance  Ecodesign  and  Ecolabel).  In  practice,  this  would  generate  a  stronger  consistency 
between  requirements  concerning  product-related  environmental  performance,  by  using 
common  evidence  to  improve  coordination  in  standard  setting10;  by  establishing  a  single, 
streamlined (and less costly) “criteria setting” process for the same product categories11; and 
by  applying  a  single  process  for  developing  and  approving  the  requirements  for  the  same 
product categories as well as homogeneous testing and verification methods.  

10 

11 

The criteria for the EU product-related policy instruments are usually set on the basis of technical and 
market evidence that is collected by way of specific preparatory studies. If this evidence is univocal for 
all  the  EU  SCP  instruments,  assumptions  on  environmental  and  economic/competitive  effects  of  new 
criteria are the same and the result can be a higher level of homogeneity. 
If the criteria are set as a result of a single process for different “uses”, taking into account the different 
objectives  of  the  EU  product-related  policy  instruments,  a  stronger  consistency  can  ensured  (e.g.:  in 
defining the thresholds for Ecolabel and Energy label). 

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4.3. 

Option 3. A mandatory Organisation Environmental Footprint (OEF) reporting 
framework 

Under this option the use of the OEF methodology will be obligatory for large organisations 
in  priority  sectors  for  reporting/information  provision  purposes12.  In  order  to  prompt 
continuous  improvement,  the  requirement  will  be  associated  with  incentives  for  use  and 
benchmarking.  In  collaboration  with  stakeholders  the  Commission  will  develop  over  time 
OEF sector rules (OEFSR)13, increasing the consistency of their environmental reporting and 
also,  to  some  extent,  the  comparability  of  their  overall  environmental  performance.  Thus,  it 
will  be  possible  for  an  organisation  to  provide  OEF-based  information  with  the  purpose  of 
communicating  its  environmental  performance  and  showing  progress  over  the  years;  but  in 
order to participate in benchmarking or sector-based league tables, an organisation will have 
to report on the basis of the established sector rules (the sector-specific OEFSR).  

4.4. 

Option  4.  Integration  of  the  methodologies  for  the  environmental  footprint  of 
products (PEF) and organisations (OEF) in relevant policy instruments 

Under  this  option  the  PEF  and  OEF  methodologies  are  integrated  in  existing  voluntary  and 
mandatory  policy  instruments  where  relevant  and  technically  implementable14.  For  instance 
PEF and OEF will be immediately used in instruments such as Ecolabel, GPP and EMAS for 
informing  the  criteria-development  process15  and  the  creation  of  Sectoral  Reference 
Documents16  for  determining  relevant  environmental  impacts  and  life  cycle-based  key 
performance  indicators.  Under  this  option  it  would  also  be  necessary  to  establish  a  set  of 
incentives, both by the public and private sector, that would reward companies and reinforce 
the positive effect on environmental performance improvements17. 

4.5. 

Option 5. Recommending the application of PEF and OEF on a voluntary basis 

A  Commission  Recommendation  will  be  addressed  to  Member  States  to  recommend  that 
whenever a Member State intends to introduce a voluntary scheme or requirements related to 
the  measurement,  verification,  reporting,  benchmarking,  and  communication  of 
the 
environmental performance of products and organisations, it should apply the PEF and OEF 
methodologies respectively18.  

The Recommendation will be addressed to business as well. It will recommend using PEF and 
OEF  methodologies  in  the  calculation  of  the  environmental  footprint  of  products  or  the 
overall  footprint  of  the  company  whenever  such  a  calculation  is  undertaken.  It  would  also 
invite the financial community (investors, insurers, banks) to use environmental performance 

12 

13 

14 

15 
16 
17 
18 

Since 2010 the EU's Joint Research Centre has been developing the Product Environmental Footprint 
(PEF)  and  Organisation  Environmental  Footprint  (OEF)  methods  (umbrella  methods).  Both  PEF  and 
OEF are LCA-based methodologies to identify and quantify the most relevant environmental impacts of 
products  (good  and  services  alike)  or  a  product  and  service  portfolio  (organisation).  They  build  on 
existing  approaches  and  international  standards,  even  if  using  LCA  for  organisation-level  assessment 
represents a relatively novel approach. See Annex 9 for a more complete description of PEF and OEF 
features. 
Organisation Environmental Footprint Sectoral Rules are a set of tailored methodological specifications 
and instructions to be applied for a specific sector. See Annex 9 
The option for integration and the technical implementability would need to be assessed in detail on a 
case by case basis. See Annex 9 for more information about the methodological developments needed 
to fully implement PEF and OEF in existing policy instruments. 
http://ec.europa.eu/environment/ecolabel/products-groups-and-criteria.html  
http://susproc.jrc.ec.europa.eu/activities/emas/index.html  
For more details on incentives, see Annex 20 and Annex 14. 
E.g. in case of national scheme or requirements related to non-financial reporting or promoting the use 
of environmental performance indicators in risk assessments in investment, the reference methodology 
would be OEF, coupled with OEFSRs. 

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information  based  on  the  application  of  OEF  and/or  OEFSRs  in  assessing  environmental 
risks.  

5. 

ASSESSMENT OF IMPACTS AND COMPARISON OF OPTIONS 

For the purposes of the assessment and comparison as well as to create groups of options that 
are mutually exclusive, the policy options presented above are clustered according to whether 
they relate to the environmental performance of products or of organisations. Please refer to 
the  Impact  Assessment  report  for  a  detailed  analysis  of  the  economic,  social  and 
environmental impact of each option. 

5.1. 

Comparison of policy options related to environmental performance of products 

Table 2 – Comparison of impacts of options related to the environmental performance of products 

Policy option

Impact category 

Functioning of the internal market and competition 
Competitiveness, trade and investment flows 
Operating costs and conduct of business 
Impact on SMEs 
Administrative burdens on businesses 
Burden for public administrations and simplification potential 
Innovation and research 
Consumers and households 
Overall economic impact 
Employment and labour markets 
Social inclusion and protection of particular groups 
Public health 
Overall social impact 
Overall environmental impact 

2
.

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5
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5.2. 

Comparison  of  policy  options  related  to  environmental  performance  of 
organisations 

Table 3 – Comparison of impacts of options related to the environmental performance of organisations 

Policy option

Impact category 

Functioning of the internal market and competition 
Competitiveness, trade and investment flows 
Operating costs and conduct of business 
Impact on SMEs 
Administrative burdens on businesses 
Burden for public administrations and simplification potential 
Innovation and research 
Consumers and households 
Overall economic impact 
Employment and labour markets 
Social inclusion and protection of particular groups 
Public health 
Overall social impact 
Overall environmental impact 

3
.

M
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5
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++ 

5.3. 

Comparison of options according to efficiency, effectiveness and coherence 

The scoring system used for the comparing tables 2 and 3 helps in the assessing the relative 
strength of alternative options in each impact category considered, but it does not provide the 
relative  weight  of  each  impact  category.  Therefore,  the  analysis  is  complemented  by  a 
comparison  of  the  options  in  terms  of  their  effectiveness,  efficiency  and  coherence19.  This 
shows that although mandatory options (2 & 3) contribute to reaching the objectives and are 
also  associated  to  the  biggest  potential  for  environmental  improvement,  they  are  also 
associated  with  higher  initial  costs  for  business  and  public  authorities,  making  them  less 
attractive in current times of economic crisis. Previous experiences in law-making in the EU 
has shown that the adaptation and transaction costs for business and public administration are 
less  important  when  the  introduction  of  a  legislative  instrument  has  been  preceded  by  its 
voluntary application. On the basis of the analysis carried out in this report, this appears to be 
the  case  also  for  option  2  and  3,  which  could  become  more  cost-effective  after  a  piloting 
application  of  PEF  and  OEF  as  proposed  under  option  5.  Option  1  would  only  marginally 
contribute  to  reaching  the  objectives  and  would  fall  short  on  environmental  and  resource 
efficiency improvements as well. The performance of Option 4 is variable, depending on the 
instrument where PEF and OEF are integrated. 

19 

Effectiveness is defined as the extent to which options achieve the objectives; Efficiency is defined as 
the extent to which objectives can be achieved in a cost-effective manner; coherence is defined as the 
extent to which options are coherent with the objectives of EU policy and are likely to limit trade-offs 
across environmental, social, and economic domains. See table 6 in the Impact Assessment report. 

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5.4. 

The preferred option 

The  preferred  option  is  5  "Recommending  the  application  of  PEF  and  OEF  on  a 
voluntary basis" for the following reasons: 

• 

• 

• 

• 

• 

• 

It  scores  positively  on  all  relevant  aspects  compared  to  the  baseline  scenario  and 
overall it scores better than the alternative options.  

A voluntary application allows for gradual further development of the PEF and OEF 
methodology  in  a  piloting  process  involving  Member  States  and  a  wide  range  of 
stakeholders to reach full potential in the following years (e.g. through a mandatory 
application or through wide take-up); 

It enables exploiting important efficiency opportunities both from an economic and 
environmental point of view. 

Despite  some  significant  benefits  across  the  three  pillars,  Options  2  and  3  would 
entail  higher  costs  at  the  current  level  of  development  of  the  methodologies. 
Furthermore, there is a risk that stakeholder ownership would be lower, affecting the 
acceptance and effectiveness of the instrument.  

In general, all stakeholders were favourable to the introduction of a voluntary scheme 
based  on  a  PEF  methodology,  except  NGOs  (50%  in  disagreement).  Stakeholder 
opinion was divided on integrating the PEF methodology into the EU SCP regulatory 
instruments  and  policy  measures  and  mostly  unfavourable  to  a  new  mandatory 
measure (60% disagreement). 

Stakeholders provided the second highest agreement to option 5 (41% strongly agree 
or agree). The majority was in disagreement with policy options related to mandatory 
tools  in  priority  (43%)  or  all  sectors  (52.8%)  and  to  the  integration  of  OEF  into 
existing mandatory instruments (44%) 

6. 

MONITORING AND EVALUATION 

The Impact Assessment sets out a series of Specific, Measurable, Achievable, Relevant and 
Time-bound  indicators  related  to  the  take-up  and  implementation  of  the  preferred  option, 
grouped  under  relevant  objectives.  These  are  presented  in  detail  in  the  Impact  Assessment 
Report. 

An  overall  review  of  the  policies  introduced  by  the  policy  initiative  subject  to  the  present 
Impact Assessment is foreseen by 2015, in correspondence with the review of some key SCP 
policy instruments. 

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