Recent Evolution of the European Regulatory Framework on Greenwashing

Aiming to enable consumers to make informed purchasing decisions and thus "contribute to more sustainable consumption patterns," the European Union adopted, on February 28, 2024, the Unfair Commercial Practices Directive to Empower Consumers for the Green Transition (Directive (EU) 2024/825, or the "Empowering Consumers Directive"). The EU Parliament also adopted, on March 12, 2024, the draft "Green Claims Directive" proposed by the Commission. Both Directives apply to claims companies may make about climate change, as well as other environmental and sustainability claims.

The Empowering Consumers Directive

The Empowering Consumers Directive introduces a specific regime for environmental claimsinto the general regime of unfair practices, which previously did not explicitly take into account environmental matters based on the currently applicable Unfair Commercial Practices Directive. The Empowering Consumers Directive applies in the context of business to consumer commercial communications, where an environmental claim is defined as:

any message or representation which is not mandatory under Union or national law, in any form, including text, pictorial, graphic or symbolic representation, such as labels, brand names, company names or product names, in the context of a commercial communication, and which states or implies that a product, product category, brand or trader has a positive or zero impact on the environment or is less damaging to the environment than other products, product categories, brands or traders, or has improved its impact over time. 

Article 1 of the Empowering Consumers Directive provides for criteria which will help determine if an environmental claim may be deemed misleading. 

The Empowering Consumers Directive must be transposed into the national law of each of the EU Member States before March 27, 2026. Sanctions applicable to misleading environmental claims will be determined by national laws.

The Green Claims Directive

The draft Green Claims Directive will lay down the requirements specifically applicable to explicit environmental claims. It targets each environmental claim "that is in textual form or contained in an environmental label" and requires that such claims are:

• Substantiated;
• Appropriately framed; and
• Verified, including a "certificate of conformity" from an accredited third-party conformity assessment body before the explicit environmental claim is made public.

Non-compliance with such requirements may lead to sanctions by the national consumer protection agencies, as provided in national transposition regulations. 

These Directives are expected to help companies to provide consumers with clear, relevant, and reliable information. Failure of companies to comply with the requirements detailed in these Directives may result in greenwashing sanctions or other legal action.

Read the full Climate Report.