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4 1. INTRODUCTION There is growing pressure on companies to demonstrate that the way in which they are producing is environmentally friendly, both at the level of individual products and as organisations. Information on environmental performance is used for the management of supply chains, ensuring that businesses are resource efficient. At the same time, it serves to show how green a product or an organisation is, because consumers increasingly want to be able to better understand the environmental impacts associated with their consumption. However, the provision of this information in a transparent and reliable way is complicated by the fact that a wide range of different methodologies for the assessment of the environmental footprint of products and organisations have been developed. These have their own features, rules, and scope, and are applied at national, European and/or international level to differing extents. The fact that there is no single accepted methodology has contributed to a situation where there is distrust (by consumers and by business alike) of environmental claims, both those attached to products and those included in companies environmental reports. In addition, the multiple government and private sector schemes increase costs for businesses, especially penalising those active in several Member States or internationally because the technical requirements differ in each scheme, thus generating hurdles in cross-border operations. This Impact Assessment report will accompany the adoption by the Commission of a package of measures to contribute to building the Single Market for Green Products. This package is the first part of a two-step process. In the first phase, the Commission will take the measures emerging out of this report to reduce the ambiguity of what a green product/organisation is and pave the way towards more reliable comparability of the environmental performance of products and organisations. The Commission will do this by introducing two robust but relatively simple methodologies for assessing the life-cycle environmental performance of products and organisations. The Commission will recommend Member States and the private sector to use them on a voluntary basis for both business to business and business to consumer transactions. The Commission will also collaborate with industry and other relevant stakeholders on the development of performance benchmarks for products and organisations in a range of priority product categories and sectors. After three years of applying the methodologies on a voluntary basis, the Commission will evaluate progress before deciding on any second phase. As part of this it will assess whether the methodologies, product and sector performance benchmarks, and incentives can be further integrated in a wider range of regulatory instruments (such as Ecodesign) and will produce appropriate proposals, as indicated in the Commission proposal for a new EU Environmental Action Programme to

20201 . Some analysis is provided of this more ambitious perspective already in this Impact Assessment report, but a new impact assessment will accompany any future proposals. This report demonstrates that providing more reliable information on whether production and consumption is green will be beneficial for companies and households, and the environment.

1 The 7th EAP. See http://ec.europa.eu/environment/newprg/index.htm.

5 This will allow in the medium term a higher uptake of green products2 and of greener practices by companies in the EU market. This would not only contribute to reducing the global environmental impacts of EU consumption but also provide some opportunities for economic growth and job creation. Green products are often based on innovative technologies and are results of ........