The European Commission proposed rules on Wednesday that would require companies in Europe to back up climate-friendly claims about their products with evidence, to stamp out misleading green labels for products from clothing to cosmetics and electronic goods.

The proposed European Union rules would regulate labels like “natural,” “climate neutral” or having “recycled content” — and tackle what the EU says is rampant greenwashing among products sold in Europe.

To use such labels, a company must carry out a science-based assessment, assessing all significant environmental impacts, to prove that its product lives up to the claim, or have it verified under an environmental labeling scheme.

An accredited verifier would need to check the claim before a company can publicly use it. Companies that make climate-friendly claims without proof could face financial penalties.

A commission assessment of 150 claims about products’ environmental characteristics in 2020 found that most - 53 percent - provided “vague, misleading or unfounded information.”

“That’s why we had to react - because those false claims, greenwashing, by the companies have become more and more sophisticated,” said EU environment commissioner Virginijus Sinkevicius.

Sinkevicius said the rules should help consumers identify which products are truly eco-friendly, and give proper credit to companies whose goods have real environmental benefits — versus those making spurious claims.

“They have to compete with those who are openly cutting corners,” he told Reuters.

The proposal would cover all consumer products sold in the EU, unless they are covered by existing EU laws that regulate certain labels — for example, organic-labeled food.

Campaign groups welcomed the plan as a step forward from the largely unregulated proliferation of green claims today. But they warned it would give companies too much leeway to choose which data or impacts they use to assess a claim - instead of setting a firm Europe-wide standard for all.

“You could have one product assessed by two different methodologies, and that would give you completely different results,” said Margaux Le Gallou, program manager at the non-profit Environmental Coalition on Standards.

Among the requirements would be that companies whose claims rely on buying carbon credits to offset their own environmental impact must disclose this.

EU countries and the European Parliament must negotiate the final law. Sinkevicius said he expected those negotiations to finish so the law can apply in 2024.

By Kate Abnett; Editors: Aurora Ellis, Marine Strauss and Kirsten Donovan

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