New Law on Greenwashing finally adopted – The EU Directive on empowering consumers for the green transition

While the ‘Green Claims Directive’ is the dominant topic as pertains to regulatory developments concerning unfair competition law but has still not been adopted, another EU Directive concerning greenwashing and sustainable consumption will already come into force on 26 March 2024. Directive (EU) 2024/825 on empowering consumers for the green transition through better protection against unfair practices and through better information (the “Directive”) aims to ban greenwashing and misleading product information, in line with the EU's goal of a circular, environmentally friendly economy by empowering consumers to make informed purchasing decisions, thus doing their part in the transition to an eco-friendly, sustainable economy. The European legislator aims to achieve this goal by implementing a number of amendments furthering the protection of consumers against commercial practices that prevent sustainable purchases by misleading consumers, namely greenwashing practices (i.e. misleading environmental claims), early obsolescence practices (i.e. premature failures of goods) and the use of unreliable and non-transparent sustainability labels and information tools.

The Directive complements the EU’s Green Claims Directive which will provide a more in-depth set of restrictions with regard to environmental claims and labelling as well as the Sustainable Products initiative by providing amendments to the Unfair Commercial Practices Directive (“UCPD”) and the Consumer Rights Directive. Focussing on the Directive’s contribution to developing a legal framework for green claims and greenwashing, this blog post provides a short overview of the Directives’ amendments to the UCPD.

Amendments to the UCPD

Aiming to empower consumers in making eco-friendly purchase decisions, the Directive amends Article 6(1) UCPD, which lists the elements that can be the subject of prohibited misleading commercial practices. The “main characteristics of the product” in respect of which misleading commercial practices are unlawful now also include “environmental or social characteristics” and “circularity aspects, such as durability, reparability or recyclability”. The explicit qualification of these characteristics and the circular aspects of a product to its “main characteristics” highlights the importance the legislator assigns to them with respect to the decision-making process consumers undergo before purchasing a product. 

Furthermore, the list of specific commercial practices pursuant to Article 6(2) UCPD which are deemed misleading is extended. The amended provision now explicitly classifies the commercial practice of ‘making an environmental claim related to future environmental performance without clear, objective, publicly available and verifiable commitments set out in a detailed and realistic implementation plan that includes measurable and time-bound targets and other relevant elements necessary to support its implementation, […], and that is regularly verified by an independent third party expert, whose findings are made available to consumers’ as misleading. 

The Directive also updates the list of information that is considered material and the omission of which is therefore misleading. According to the new paragraph (7) of Article 7 UCPD, which governs the case where a trader provides a service which compares products and provides the consumer with information on environmental or social characteristics or on circularity aspects, the following information shall be regarded as material: ‘information about the method of comparison, the products which are the object of comparison and the suppliers of those products, as well as the measures in place to keep that information up to date.’

Finally, the Directive extends the list of commercial practices which must be considered unfair in all circumstances (so called ‘blacklist’) with regard to seven early obsolescence practices and four greenwashing practices. This extension includes inter alia:

• displaying a sustainability label which is not based on a certification scheme or not established by public authorities;
• making a generic environmental claim for which the trader is not able to demonstrate recognised excellent environmental performance relevant to the claim;
• making an environmental claim about the entire product or the trader’s entire business when it concerns only a certain aspect of the product or a specific activity of the trader’s business;
• claiming, based on the offsetting of greenhouse gas emissions, that a product has neutral, reduced or positive impact on the environment in terms of greenhouse gas emissions.

Impact for businesses 

The amendments to the UCPD will have a significant impact on environmental claims used by businesses. The popular and widespread advertising claim of carbon neutrality will be considered unfair, regardless of the specific circumstances of the case, if the carbon neutrality is achieved through carbon offsetting. Future-related environmental claims, such as “We will reduce our carbon footprint by 25% by 2030”, will only be possible under very strict requirements. Overall, the legal requirements for environmental claims are becoming significantly more stringent. Considering that the ‘Green Claims Directive’ is set to take its place alongside the Directive, the impact will be even fiercer.

The Member States are now required to implement the Directive in national law by 27 March 2026 and to apply the adopted measures from 27 September 2026. As long as the Directive has not been transposed into national law in the Member States, it has no direct impact on business activities. However, especially with regard to environmental claims and labelling, companies should be mindful of the fact that numerous misleading commercial practices that do not comply with the new Directive can and already are considered unlawful under current unfair competition law in some Member States, e.g., in Germany. Against the background of the increasing importance European legislators assign to green claims and the prohibition of greenwashing practices, it is worth taking a closer look at the requirements regarding environmental claims and labelling already now and evaluate appropriate measures aligning advertising practices with the amended UCPD. 

If you would like to find out more about what you can do to prepare your organisation for the new legislation on environmental claims and labelling, please do not hesitate to get in touch with our team. We are happy to assist companies from all industry sectors to adjust their business activities as well as assess the associated litigation risks in this context.