The ‘E‘ of ESG: Greenwashing under the spotlight – recent trends in the EU

Greenwashing is attracting growing scrutiny from courts and regulatory authorities in many jurisdictions, including the EU, UK, and US. Recent legislative developments in these jurisdictions are empowering NGOs and activist groups to challenge corporate sustainability claims with increasing sophistication, moving beyond the mere truthfulness of individual statements to broader assessments of overall business impact. In this blog post, we explore the evolving landscape of greenwashing in the EU, where regulators and courts are actively shaping a more demanding compliance landscape for businesses. You can also read our detailed post on UK greenwashing developments and our post exploring key greenwashing trends in the US.

Regulatory updates and trends 

A cornerstone of EU greenwashing developments is the EU Directive on Empowering Consumers for the Green Transition (EmpCo Directive), formally adopted in 2024. The EmpCo Directive must be transposed into national laws by 27 March 2026, with the new rules to apply from 27 September 2026. Germany, for example, has already published a draft bill to implement the new rules, with the legislative process expected to conclude by the end of the year.

While current EU laws already impose strict standards on greenwashing and allow for substantial fines in case of cross-border infringements, the EmpCo Directive seeks to strengthen this protection further by enhancing transparency, combating greenwashing, and protecting vulnerable consumers through improved access to clear information. It amends both the Unfair Commercial Practices Directive (UCPD) and the Consumer Rights Directive (CRD) and applies not only to EU traders but also to non-EU businesses targeting EU-based consumers.

Under the EmpCo Directive, environmental claims about future performance (such as “Carbon neutral by 2030”) will be prohibited unless supported by specific, objective, and verifiable commitments set out in a detailed implementation plan. This plan must include measurable and time-bound targets, relevant resource allocation, and regular independent third-party verification made available to consumers.

Notably, the EmpCo Directive extends the list of commercial practices which must be considered unfair in all circumstances (so called “blacklist”). This includes for example:

• 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 (e.g., “eco-friendly” or “green”);
• 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; and
• 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.

By contrast, the future of the planned Green Claims Directive, which sought to set strict requirements for substantiating, communicating, and verifying voluntary environmental claims, remains uncertain. Following debates about administrative burden and a loss of political support, the legislative process stalled in mid-2025. However, there has been no official withdrawal, and the Directive still appears in the European Commission’s 2026 work program, which leaves businesses facing uncertainty as to if and in what form the Directive might eventually be adopted. 

Enforcement and litigation

Meanwhile, national courts are confirming that already today strict rules on greenwashing are in place. For example, in June 2024, the German Federal Court of Justice (FCJ) ruled that climate neutrality advertising is inherently misleading if it lacks a clear explanation. The FCJ found that consumers cannot readily distinguish between genuine CO₂ reduction and offsetting; as a result, claims like “climate neutral” must be clarified directly within the advertisement, references such as QR codes linking to further details do not suffice. This ruling shapes marketing practices at least until the stricter regulatory requirements of the EmpCo Directive come into force in Germany.

In Germany and Austria, consumer associations are also pursuing an unprecedented number of court and out-of-court actions targeting climate neutrality marketing. Affected sectors include food and beverages, airlines, energy, logistics, and consumer goods. Typical claims under scrutiny include “100% climate neutral,” “CO₂ neutral delivery”, “climate positive product”, often based largely on offsetting without sufficient explanation.

This trend is not unique to Germany and Austria. At EU-level, twenty-one airlines have recently agreed to modify their practices regarding environmental claims following dialogue with the European Commission and national consumer protection authorities. These airlines have committed, in particular, to stop claiming that the CO₂ emissions of a specific flight could be neutralised, offset or directly reduced by consumer financial contributions to climate protection projects or by the purchase of alternative aviation fuels.

In a recent French case, a Paris court found that a limited number of TotalEnergies’ commercial communications misled consumers by claiming “carbon neutrality by 2050”, due to a lack of scenario clarity on their ongoing fossil fuel investments. The court ordered TotalEnergies to remove this misleading statement and display the judgment online for 180 days, showing a rigorous approach to sanction, despite the limited scope of the ruling.

In the Netherlands, the Netherlands Authority for Consumers & Markets (ACM) has ramped up supervision of sustainability-related statements, particularly in sectors such as food and beverages and retail. Following ACM interventions and inquiries, several companies have amended or removed claims from their packaging and advertising that were identified as unclear or misleading. Additionally, the Dutch Advertising Code Committee has found that certain sustainability-related statements in the travel sector violated the Environmental Advertising Code, signalling increased enforcement activity and a growing expectation for accurate and substantiated environmental marketing.

Outlook and key takeaways

In sum, greenwashing in the EU is increasingly becoming a material risk for businesses as courts shape enforcement parameters and legislatures drive even stricter standards. We expect that this will significantly raise the likelihood of regulatory action, litigation exposure, financial penalties, and reputational damages. 

See our latest posts on how these trends (and others) are playing out in the UK and the US.

This blog is part of ‘The ‘E’ of ESG’ blog series. Click here to explore more blogs of our series. You can read more about our Environment, Social and Governance offering here.