What are the top three developments in North Macedonia concerning green claims and the associated risk of greenwashing?
The concepts of green claims such as “ecological”, “organic”, or “biological” production involve methods that refrain from the use of harmful chemicals known to impact health negatively. These products are often regarded for their superior quality and meticulous production processes. As expected, many companies in North Macedonia faced setbacks in growth and innovation due to the COVID-19 and energy crisis, including disrupted supply chains and order cancellations. However, the general impression is that the companies remain optimistic about overcoming these challenges.
Currently, eco-friendly production encompasses various sectors in North Macedonia, including primarily agriculture, meat and wine. Despite slightly higher price points, there's a slow growing demand for more environmentally friendly products.
1. Increased Consumer Demand for Eco-Friendly Products:
There is a noticeable but still small shift in North Macedonia towards consumers preferring environmentally friendly products and services. Studies show that the agri-food sector is one of the key contributors to growth in North Macedonia, representing 7.6 percent of GDP (in 2021). This is higher than in most comparable economies in the Western Balkans, and other Upper Middle-Income Countries in Europe and Central Asia (ECA) region.
A growing willingness among Macedonian consumers is present to pay more for goods and services that are perceived as being eco-friendly. This trend has prompted businesses to emphasize the environmental benefits of their offerings in marketing and advertising campaigns. However, with the rise in green claims, there is a corresponding risk of greenwashing as companies may exaggerate or misrepresent their environmental credentials. This dynamic underscores the importance of transparency and accountability in green marketing practices.
Limited public awareness of the benefits of organic products is another obstacle. Because of insufficient promotion, consumers have limited knowledge of the advantages that organic production provides to the environment and human health. There are low quantities of officially certified fresh and processed organic plant products. Often, in North Macedonia, organic products are marketed without noticeable differentiation from conventional products. Lastly, low incomes and high trade margins imposed by the retail network make organic products accessible only to high-income households.
2. Emergence of Sustainability Certification Programs:
The emergence of sustainability certification programs and eco-labeling initiatives is increasing in North Macedonia. These programs aim to provide consumers with assurance regarding the environmental impact of products and services. However, the proliferation of such labels also raises concerns about their credibility and transparency.
There are two certification bodies (Balkan Biosert Makedonija DOOEL Skopje and Pro-Cert DOOEL Kavadarci) authorized by the Ministry of Agriculture, Forestry, and Water Economy on control and certification in organic production, while the Institute of Accreditation of the Republic of North Macedonia (“IARNM”) inspects the certification bodies.
Consumer advocacy groups such as the Federation of Organic Producers of Macedonia (“FOPM”) (which is a national umbrella organization formed by regional associations of organic producers in North Macedonia to ensure co-ordination and leadership of the organic movement in North Macedonia) and regulatory bodies are paying closer attention to the certification processes behind these labels to ensure they are based on robust criteria and objective assessments. Efforts are made to prevent instances of greenwashing where companies may misuse or misrepresent these labels to portray a false sense of environmental responsibility. Inaccurate labelling of products, in terms of organic quality of the product, the period of transition or non-compliance with the remaining product labelling rules, is considered a misdemeanor offence under Macedonian law and is punishable in accordance with the laws prescribing these rules. Depending of the type of offence and in order to remove an identified irregularity, generally, the state supervision authority, has the right and obligation to the subject of the supervision: (i) to point out the established irregularities and determine a deadline for their removal; (ii) to order the subject to take appropriate measures and activities within a period determined by the inspector; (iii) to temporarily prohibit the subject from performing an activity, profession or duty; (iv) to temporarily confiscate objects and assets with which a crime or misdemeanor was committed in accordance with the applicable statutory rules; (v) to submit to the subject a request for initiation of misdemeanor procedure; and (vi) to file a criminal complaint against the subject or initiate another appropriate procedure. The potential misdemeanor penalties vary from EUR 15 to EUR 8,000 per offence depending on the misdemeanor offence, the type of the subject of supervision (physical person or legal entity), the company size of the subject of supervision.
3. Government Regulation to Enhance Environmental Transparency:
In line with global efforts to promote environmental transparency, North Macedonia is enacting regulatory measures to ensure accurate and transparent green claims. The applicable Law on Organic Agricultural Production and its bylaws regulate the overall processes for production, processing, storage, transport, sale, labelling and control of organic products and is compliant with EU Acquis.
The legislation, competent authority, control bodies, and accreditation and certification system for organic farming are established and operational in North Macedonia. However, monitoring and control of organic certification and products needs to be carried out more proactively and systematically.
Government authorities are focusing on enforcing stricter guidelines for companies making environmental assertions in their marketing communications. This includes mandates for clear and accurate labeling of eco-friendly products and services, as well as penalties for companies found guilty of greenwashing. These regulatory measures aim to safeguard consumers from deceptive green marketing practices while fostering a marketplace where genuine environmental efforts are rewarded and celebrated.
