Pre-Contractual Information Duties on Sustainability of Products: a Path Towards Sustainable Consumption?

Abstract

To address the environmental challenges the world is facing, the European Union (EU) adopted measures to tackle them in various areas, consumer law being one of them. The idea was that consumers need to be well-informed about the environmental and sustainability aspects of products; only then can they make environmentally-conscious purchasing decisions. The means of achieving this goal was through pre-contractual information duties, a concept already established in EU consumer law. In this manner, obligations are imposed on traders to disclose certain information, for instance sustainability information, to consumers. The new Directive (EU) 2024/825 does exactly that. The article examines the concept of pre-contractual information duties, their application to sustainability information, as provided by the new directive, and raises attention to several limitations that hinder the ability of the new information model to affect consumer choices and guide them towards more sustainable consumption patterns.

Introduction

In March 2024, nearly two years after the European Commission’s proposal was originally published, the Directive (EU) 2024/825 (hereinafter “Directive”) was adopted with the goal to empower consumers for the green transition. According to the European legislators, it is essential for the progress of the green transition “that consumers can make informed purchasing decisions and thus contribute to more sustainable consumption patterns. That implies that traders have a responsibility to provide clear, relevant and reliable information” (recital 1 of the preamble to the Directive). Hence, the Directive intertwines two goals – environmental protection and consumer protection.

The approach of the Directive is based on two pillars. The first pillar relates to traders’ voluntary provision of information to consumers (i.e. advertising) and focuses particularly on the prohibition of unfair commercial practices, such as greenwashing and promoting early obsolete goods. The second pillar, on the other hand, relates to trader’s mandatory provision of information to consumers, also known in legal literature as pre-contractual information duties.

The article will focus on the latter pillar. It will present the new framework of pre-contractual information duties on sustainability of goods; consider the development of this framework; and explore the prospects of the reform’s success. While the term ‘sustainability’ generally refers to a wide range of goals, spreading across the environmental, economic and social dimension (Purvis, Mao, & Robinson, 2018), the sustainability of products will be understood in this article as environmentally sound and conscious production and consumption.

The concept of a pre-contractual information duty

In contract law, each party to a transaction generally bears the responsibility to obtain the relevant information needed to enter into a contract. Until the 1960s, both common law and civil law jurisdictions agreed that there is no general principle requiring one party to fully disclose all potentially relevant information to the opposite party (Legrand, 1986). Later, the approaches diverged. While common law jurisdictions remained sceptical towards disclosure duties, civil law systems (with German and French law at the forefront) developed exceptions in which disclosure of crucial information to the opposite party before the conclusion of the contract is required (van Rossum, 2000; Markesinis, Unberath, & Johnston, 2006; Fages, 2008). Thus, pre-contractual information duties arose.

Although the concept was introduced by the courts, its value was soon recognised by the legislator. In an attempt to tackle information asymmetries affecting consumers when purchasing goods, traders were mandated to disclose certain information to consumers – who were considered to be a weaker party in the transaction. This way, consumers could make fully informed decisions, and truly achieve freedom of contract (Howells, Twigg-Flesner, & Wilhelmsson, 2018; Busch, 2016). Thus, pre-contractual information duties became one of the central tools of consumer law.

Pre-contractual information duties were utilised not only on the national level, but also on the EU level where, in 2011, the Consumer Rights Directive (Directive 2011/83/EU, hereinafter “CRD”) was adopted. According the CRD, traders are required, if that information is not already apparent from context, to provide to consumers the information on: (i) main characteristics of goods and services, (ii) total prices inclusive of taxes, (iii) identity of the trader, (iv) arrangements for payment and delivery, (v) existence of a guarantee, etc. (Article 5 of the CRD). Special information requirements were set for distance contracts (such as online shopping) and off-premises contracts (such as door-to-door selling).

Pre-contractual information duties on the sustainability of products?

With climate and environmental challenges gaining more attention in the past decade, the EU took decisive action by adopting the European Green Deal, a roadmap of the key policies and measures to achieve climate neutrality, establish a circular economy, promote sustainable growth, and preserve the environment (European Commission, 2019). Within the framework of the European Green Deal, the EU proposed to address these challenges by reforming various areas.

Consumer law was one of these areas. In March 2020, the European Commission adopted A new Circular Economy Action Plan which proclaimed, as one of the goals, empowering consumers by providing them with “trustworthy and relevant information on products at the point of sale, including on their lifespan and on the availability of repair services” (European Commission, 2020). The underlying idea was most likely that well-informed consumers will make more sustainable purchasing choices.

In parallel, the European Parliament’s Committee on Internal Market and Consumer Protection ordered a study focusing on ways in which consumer legislation can contribute to sustainable consumption. The study was published in April 2020 and, building on prior studies and national legislative activities, suggested expanding the list of pre-contractual information duties to include durability and repairability of products (European Parliament, 2020).

It became rather clear from these developments that the EU approach to guarantee to consumers the relevant information on sustainability of products will be through pre-contractual information duties. The existing list did not address sustainability considerations and was thus in need of reform.

While the process on the EU level was slower, some Member States approached the issue more actively and expanded the list of pre-contractual duties themselves, without waiting for the EU to mandate it. They were allowed to do that because the harmonisation of pre-contractual information duties in the CRD was only minimum (Keirsbilck, 2020; Schlacke, Tonner, & Gavel, 2016), meaning that Member States were allowed to provide a higher level of consumer protection than that guaranteed by the CRD. In France, for instance, a law was adopted in 2020, which mandates producers and importers of waste-generating products to inform consumers of their environmental qualities and characteristics, including recyclability, durability, repairability, potential reuse, the use of renewable resources etc. Further, the law requires producers, importers, distributers and other marketers of electrical and electronic equipment to provide to consumers a repairability index and, from 2024 onwards, a durability index (Loi n° 2020-105).

EU developments followed. In 2022, the European Commission published a proposal to amend the CRD and expand the list of pre-contractual information duties to include some sustainability-related information. The Directive was finally adopted in March 2024.

Solutions of the new Directive

The new Directive introduced several new pre-contractual information duties (Article 2). Accordingly, traders are required to disclose to consumers:

●  information on the commercial guarantee of durability (if the producer offers such a guarantee for a period exceeding two years and informs the trader of this guarantee);

●  information on the legal guarantee of conformity for digital content and digital services;

●  information on the after-sales services and commercial guarantees (if applicable);

●  information on the minimum period during which the producer or provider provides software updates (for goods with digital elements, for digital content and for digital services); and

●  information on one of the following: (i) reparability score for goods or (ii) information on the availability, estimated cost and the procedure for ordering spare parts, information on the availability of repair and maintenance instructions and information on repair restrictions.

The new Directive introduces similar pre-contractual information duties for distance and off-premises contracts.

Member States must transpose the Directive into national law no later than by 27 March 2026. Currently, the Directive only binds Member States, meaning that traders are not yet bound by the new pre-contractual information duties. As soon as Member States implement the Directive, these duties will arise on their territories.

Sustainability and consumer law: do they go hand in hand?

The new framework is based on the premise that consumers can contribute to the goals of circular economy by making sustainable purchasing choices. But is this premise realistic?

On one hand, it may be consistent with the behavioural economics theory. People are not homo economicus, characterised by unbounded rationality, willpower and self-interest (Jolls, Sunstein, & Thaler, 1998), but rather humans who sometimes fail to make good, rational decisions. Based on this finding, Thaler and Sunstein (2008) sought to develop a concept which could influence people to make better choices while, at the same time, preserving their freedom of choice. A nudge was born. Nudging people means that, by altering the context in which people make decisions, one can influence their decisions and move them into a direction that will make their life better (Thaler & Sunstein, 2008).

Information could be considered a nudge. If people are better informed, they can generally make better choices. Or in the field of sustainability: If people are better informed about the sustainability of products, they can make more environmentally-conscious purchasing decisions. But, ‘can’ does not automatically mean ‘will’.

It is a fact that consumer interests and environmental protection goals do not always converge. Environmentally sound decisions are often disadvantageous with respect to short-term interest of consumers (i.e. low prices), meaning that consumers will not always be willing to use the environmental information they have (Wilhelmsson, 1998). This is confirmed by empirical studies. O’Rourke and Ringer (2015) found in their study that sustainability information only had impact on consumers who actively sought it, while having no impact on other consumers. Elmor, Ramos, Vieites, Andretti, and Andrade (2024) found that consumers neglect the product’s environmental impact when buying fast-moving goods although considerations, again, increased among consumers with stronger environmental beliefs.

On the contrary, some studies show consumer receptiveness to sustainability information. One study found that lifespan labelling has an influence on purchasing decisions in favour of products with longer lifespans (European Economic and Social Committee, 2016), while another showed that consumers were more likely to choose products with highest durability and repairability (European Commission, 2018). It is worth noting that product durability and repairability are sustainability aspects that are most in line with consumers’ short-term interests. Other sustainability information, such as information on sustainable production of products, might not be this successful in influencing consumers’ purchasing choices. Perhaps this was the reason that such pre-contractual information duties were not even included in the Directive.

There are some further issues with the idea that better informed consumers will make more sustainability-conscious decisions. Firstly, there is often no consensus among the scientific community on methodologies defining what products are sustainable.

Secondly, sustainability information is sometimes too complicated for consumers to understand (Wilhelmsson, 1998). While eco-labels were designed to tackle this problem, an increasing number of eco-labels using different methodologies creates confusion among consumers (Langer, Eisend, & Kuß, 2008). An EU solution to this problem was the introduction of the EU Ecolabel which is awarded based on the fulfilment of criteria set by the European Commission for different product groups. Currently, the criteria are in place for product groups, such as clothing and textiles, electronic equipment, furniture, paper, lubricants, cleaning and others (European Commission, 2024).

Thirdly, sustainability information can sometimes be presented in an unclear way to the consumer. In an analysis of the French repairability index applied to smartphones, Barros and Dimla (2023) find that the index does not “clearly communicate to the consumer if the smartphone is easy to self-repair or easy and affordable to have it professionally repaired”. Further, eco-labels might be misleading to consumers since a particular eco-label might only measure one specific sustainability aspect (for instance, durability of a product), while the product could be perceived by an uninformed consumer as sustainable in other aspects (such as sustainable production) as well. Thus, the design of the sustainability information is key in order to have an impact on consumers.

Fourthly, adding additional information disclosures to consumers might result in the information overload, where the large amount of information received hinders rather than helps decision-making (Bawden & Robinson, 2009).

Lastly, when thinking about pre-contractual information duties, we must also look on the other side of the relationship. The duties assigned to traders increase their costs in two ways – firstly by acquiring relevant sustainability information (since traders are often not producers) and secondly by communicating the information to consumers (for example, by printing additional labels). If pre-contractual information duties on sustainability of products are not effective and successful in achieving sustainability goals, the justification on imposing additional costs to traders might be questioned. Increased costs incurred by traders are likely to be transferred to consumers through price increases (Craswell, 1991) and can be detrimental to the overall efficiency in the markets. Thus, the range of information requirements should be minimised to an adequate and necessary level.

Conclusion

Consumer law, by means of pre-contractual information duties, might be a contributing factor towards more sustainable consumption, however it cannot be one of the main measures to tackle the environmental challenges the world is facing. While better informed consumers can make more sustainability-conscious decisions, this does not automatically mean that they will. There are many limitations to the information model, including the divergence of consumers’ short-term interests (lower prices) and environmental goals (usually more expensive but sustainable products), different and complicated methodologies of defining sustainable products, as well as information overload that consumers are facing in today’s information society. Hence, the practical success of the Directive is yet to be seen.

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