Greenwashing in the EU Financial Sector |
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Bulgaria |
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(Europe)
Firm
Penkov, Markov & Partners
Contributors
Ivan Markov |
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| Does your jurisdiction have an explicit legal framework to identify, address and sanction greenwashing in the financial sector? If yes, is it enacted in a specialized law or addressed by other regulations (advertising law, consumer protection law,... | Bulgaria does not have any explicit legal framework dedicated to identify, address and sanction greenwashing in the financial sector. |
| Is the relevant legal framework based on the EU or on the national legislation? | As part of the unfair commercial practices, the Bulgarian Consumer Protection Act sanctions a list of misleading commercial practices, including respect to green claims/greenwashing by a trader towards a consumer. The National Ethical Standards for Advertising and Commercial Communication in Bulgaria envisage principles regarding marketing communications of environmental claims. The term “environmental claim” refers to "any statement, symbol or graphic that indicates an environmental aspect of a product, component, or packaging". The legal principles are related to different national and international standards, including the International Standard ISO 14021 on "Self-declared environmental claims". Additionally, claims such as "ecologically safe" or "environmentally friendly", should be avoided unless they can be validly proven - if an environmental claim refers to health or safety, it should be backed by material scientific evidence. Environmental claims should also never be made in a manner that implies that such apply to more aspects of a product's life cycle, or more of its characteristics than the evidence supports. In that respect, a life cycle analysis should support a claim of life-cycle benefits, i.e. when a claim mentions the removal/elimination of substances or things that influence the environment, it should be obvious what exactly has been removed/eliminated. |
| Is greenwashing, which may occur in the financial sector, addressed specifically and/or any differently from greenwashing in other sectors? | The only general and transversal prohibition that applies today, across all sectors, including the financial sector, is the prohibition laid down by consumer law. |
| Does the current legal framework provide a definition of greenwashing? If yes, how it is defined, is the definition regulatory-binding? | There is no general definition of greenwashing under Bulgarian law. |
| What are the main challenges legal experts see in addressing greenwashing in the EU financial/banking sector and what are the main challenges in implementing the existing regulatory framework to address greenwashing within the EU financial/banking... | In our opinion, the lack of a legal definition of greenwashing will be the main risk for legal experts in Bulgaria. There is no existing legal framework for greenwashing in the financial sector in Bulgaria, therefore, new legislation should be put in place. |
| Are there any relevant links to national legislation and/or guidance? | Consumer Protection Act: https://psc.egov.bg/documents/20124/0/CONSUMER+PROTECTION+ACT_37.pdf Code of the National Ethical Standards: https://www.nss-bg.org/en/kodeks |
Greenwashing in the EU Financial Sector
Bulgaria does not have any explicit legal framework dedicated to identify, address and sanction greenwashing in the financial sector.
As part of the unfair commercial practices, the Bulgarian Consumer Protection Act sanctions a list of misleading commercial practices, including respect to green claims/greenwashing by a trader towards a consumer.
The National Ethical Standards for Advertising and Commercial Communication in Bulgaria envisage principles regarding marketing communications of environmental claims. The term “environmental claim” refers to "any statement, symbol or graphic that indicates an environmental aspect of a product, component, or packaging". The legal principles are related to different national and international standards, including the International Standard ISO 14021 on "Self-declared environmental claims".
Additionally, claims such as "ecologically safe" or "environmentally friendly", should be avoided unless they can be validly proven - if an environmental claim refers to health or safety, it should be backed by material scientific evidence.
Environmental claims should also never be made in a manner that implies that such apply to more aspects of a product's life cycle, or more of its characteristics than the evidence supports. In that respect, a life cycle analysis should support a claim of life-cycle benefits, i.e. when a claim mentions the removal/elimination of substances or things that influence the environment, it should be obvious what exactly has been removed/eliminated.
The only general and transversal prohibition that applies today, across all sectors, including the financial sector, is the prohibition laid down by consumer law.
There is no general definition of greenwashing under Bulgarian law.
In our opinion, the lack of a legal definition of greenwashing will be the main risk for legal experts in Bulgaria.
There is no existing legal framework for greenwashing in the financial sector in Bulgaria, therefore, new legislation should be put in place.
Consumer Protection Act: https://psc.egov.bg/documents/20124/0/CONSUMER+PROTECTION+ACT_37.pdf
Code of the National Ethical Standards: https://www.nss-bg.org/en/kodeks