EU against greenwashing: environmental promises put to the test

Further EU measures against greenwashing

The growing amount of information about the impact of consumption is causing more and more consumers to rethink the consequences of their behavior and purchasing decisions on the environment and society. More and more consumers want to actively contribute to a more sustainable future. Many companies have also adapted to this trend. Although some companies are inherently sustainable, others are taking advantage of the increased demand to better market their products as "environmentally friendly", "climate neutral" or "sustainable".

The question arises as to how it can be ensured that these product-related promises are kept. Various “greenwashing scandals” in recent years have shown how easily consumers can be deceived: H&M’s “Conscious Collection” contained more synthetic materials than the main collection[1] and McDonald's replaced plastic straws with supposedly recyclable paper straws, which turned out to be non-recyclable[2].

Against this background, the regulation of so-called "environmental claims" is becoming increasingly important. The European Union has launched initiatives to protect consumers from deceptive environmental promises and to support genuine sustainable commitment by companies. The aim is to strengthen the trustworthiness of environmental claims, protect consumers from misleading information and encourage companies to act in an environmentally conscious manner. This should also ensure fair competition. The "Green Claims" initiative aims to improve the transparency and accuracy of environmental claims by requiring clear, scientifically based evidence. At the same time, the "Empowering Consumers for the Green Transition" (EmpCo) initiative strengthens companies' information obligations and strictly prohibits misleading environmental claims.

These new regulations are crucial to ensure that consumers can make informed choices, that companies' sustainability promises are actually kept, and that companies' genuine sustainable commitments are given greater importance.

Current Facts and Figures

The extent of greenwashing is shown by studies which show that more than half of green advertising claims are vague or misleading.

− 53% of environmental claims contain vague, misleading or unsubstantiated information
− 40% of the claims have no evidence
− Half of all eco-labels offer only weak or no verification
− In the EU there are 230 sustainability labels and 100 green energy labels with very different levels of transparency[3]

Sustainable Action and EU Solutions

So when can sustainable economic activity be advertised and when is it no longer greenwashing?

Sustainable action does not just mean environmentally friendly gestures, but also taking economic, ecological and social factors into account. This requires measurable measures that companies integrate into their business models and decision-making processes.

Act against Unfair Competition (UWG)

According to the current legal situation in Germany, misleading environmental statements are already Section 5 (1) UWG inadmissible because they deceive consumers. An example is a company that described the production of its goods as "climate neutral" even though it only offset the resulting emissions through a CO2 partner. The Federal Court of Justice (BGH) ruled that advertising with the term "climate neutral" was misleading in this case, as it can include both the actual reduction of CO₂ emissions in the production process and the mere offsetting of these emissions through external measures.

If such an ambiguous term is used, the advertising must clearly define what is meant by it. Simply compensating for emissions does not have the same meaning as an actual reduction in the production process. Transparency is crucial here in order not to mislead consumers and to enable them to make an informed purchasing decision.

However, the UWG does not contain any specific provisions for environmental claims. Therefore, it is currently the responsibility of the courts to decide in each individual case whether consumers have been deceived.

To improve the transparency and reliability of environmental claims, the European Union is currently developing several initiatives. The "Green Claims" initiative and the "Empowering Consumers for the Green Transition" (EmpCo) directive aim to establish clear and verifiable criteria for environmental claims, thereby strengthening both consumer protection and competition.

Empowering Consumers for the Green Transition – Policy

The EmpCo Directive[4] extends the existing Unfair Commercial Practices Directive (UCP Directive) to include specific rules on environmental claims so that consumers are better protected against misleading environmental claims. This entered into force on 27 March 2024, which means that EU Member States now have until 27 March 2026 to implement it into national law.

The directive distinguishes between general environmental claims, specific environmental claims and sustainability labels. It expands the “black list” of unfair business practices to include specific examples of misleading environmental claims.

Key changes include the fact that claims about the entire product or the entire business of a company may not be made if they only apply to a specific aspect or a single activity. For example, a product may not be advertised as "made with recycled material" if this only applies to the packaging.

In addition, the directive prohibits advertising claims that claim neutral, reduced or positive environmental impacts if these are based on the compensation of greenhouse gas emissions outside the product's value chain.

The EmpCo Directive is particularly relevant in relation to general environmental claims such as "environmentally friendly", "green" or "ecological", which are to be largely banned. These non-specific terms can mislead consumers and are therefore largely prohibited by the new "blacklist" ban.

These measures aim to increase the credibility of environmental claims and promote fair competition so that consumers can make informed purchasing decisions.

Green Claims Directive

The Green Claims Directive[5] supplements the EmpCo Directive with numerous additional provisions on environmental claims.

It aims to establish clear and verifiable criteria for environmental claims to ensure that they are based on scientifically sound evidence and are easy for consumers to understand and compare.

Companies must first carry out an assessment that provides the framework for their environmental claims. It must be clearly defined whether the claim relates to the whole product, a part of the product, a stage of the life cycle or specific aspects. In addition, environmental claims must be verified and certified by an accredited audit body before they are published to ensure that they comply with EU requirements. The claims must be updated regularly and reviewed at least every five years.

The regulation also includes the introduction of QR codes to give consumers access to background information to make it easier to verify claims made by companies. This is part of a comprehensive approach to protect consumers from misleading information while increasing pressure on companies to actually act sustainably.

Micro-enterprises are exempt from these regulations, while small and medium-sized enterprises should receive support in their implementation.

These measures aim to increase the credibility of environmental claims, protect consumers from misleading information and motivate companies to act sustainably. The directive is still in the legislative process. It was adopted by the European Parliament in March 2023 and the European Council will start negotiations with the EU Parliament in the next legislative period.[6]

Conclusion

The increasing importance of environmental protection has led companies to increasingly advertise their products as sustainable. However, as numerous greenwashing scandals show, these promises are often misleading. The EU is responding with the Green Claims and EmpCo initiatives as a further measure. These set clear rules and require scientifically based evidence for environmental claims in order to protect consumers from deception and promote real sustainable progress. This is an important step towards more transparency and credibility in the market.