Top 25 Questions & Answers on the new EU Green Claims Directive (updated)

The EU Green Claims Directive is a crucial piece of legislation designed to enhance transparency and reliability in environmental claims made by businesses. With increasing consumer demand for sustainable products, the importance of genuine green claims has never been higher. However, the rise in eco-friendly marketing has also led to a surge in "greenwashing"—misleading or unfounded environmental claims. This directive addresses these issues by setting stringent standards for the substantiation, communication, and verification of green claims across the European Union.

This post also covers the basics of the EU Directive on Empowering Consumers for the Green Transition (ECGT), which aims to prevent unfair company tactics from hindering sustainable consumer choices. The ECGT is the "sister directive" of the EU Green Claims Directive and has already been formally adopted by the Council. You can get a quick overview here.

Content

Why are there two Green Claims Directives?

EU Directive on Empowering Consumers for the Green Transition (ECGT)

Quick overview

EU Green Claims Directive (GCD)

Basics

Scope

Timeline

Criteria & Requirements

Pre-approval, Verification, and Self-Declaration

Compliance Preparation

Enforcement

Regulatory Context

Criticisms & Changes

Sources & Disclaimer 

Why are there two Green Claims Directives?

The European Union has established two directives concerning green claims to address distinct but complementary aspects of environmental transparency and consumer protection.

The EU Directive on Empowering Consumers for the Green Transition (ECGT) focuses on consumer protection by prohibiting misleading environmental claims. In contrast, the EU Green Claims Directive (GCD) emphasizes environmental integrity, setting specific requirements for the use of environmental claims.

The ECGT aims to safeguard consumers against deceptive practices, whereas the GCD ensures that environmental claims meet stringent standards, comparable to the General Data Protection Regulation (GDPR) in terms of enforcement severity.

Together, these directives create a robust framework for ensuring truthful and reliable green claims in the marketplace.

Quick Overview: The EU Directive on Empowering Consumers for the Green Transition (ECGT)

The ECGT is the "sister directive" of the EU Green Claims Directive (GCD).

The Council has now formally adopted the EU Directive on Empowering Consumers for the Green Transition (ECGT), which aims to prevent unfair company tactics from hindering sustainable consumer choices.

This means the EU Directive on Empowering Consumers for the Green Transition (ECGT) must now be integrated into national legislation across the EU.

Key Aspects of the ECGT Directive

• Stricter Requirements for Environmental Advertising: The new directive demands that all environmentally related advertising claims must be scientifically substantiable. This means advertisers need to provide extensive evidence (and verifications) to support their environmental claims.
• Consideration of Social Impacts: In addition to ecological aspects, the social impacts of a product or company are now seen as important criteria. This includes information about working conditions, human rights, equal treatment, social security, ethical commitments, and, for example, animal welfare.
• Introduction of New Per-Se Prohibitions: The directive introduces specific bans on misleading advertising practices. These include unsubstantiated general environmental statements, misleading overall claims, vague future environmental performance, unspecific comparisons, and the use of uncertified sustainability seals.
• Restrictions on CO2-Neutral Advertising: Advertising based on CO2 compensations will be more strictly regulated. Companies will no longer be allowed to advertise "climate-neutral" products if they are solely based on compensation measures, as these are not considered equivalent to actual CO2 savings.
• Information on Durability and Repairability: The new directive requires that consumers be informed about the durability and repairability of products. This includes information on software updates, usage duration and intensity, repairability, availability of spare parts, and the manufacturer's warranty.

Timeline

The ECGT was published in the Official Journal of the European Union. It was signed and published as Directive (EU) 2024/825 on March 6, 2024.

The Directive came into force on March 26, 2024, and EU Member States have until March 27, 2026, to take all necessary measures to comply with the new directive (Germany is expected to do so by May 2025, according to the "Ausschussdrucksache 20(21)94" from the report of the German Bundestag).

As of September 27, 2026, the Member States must implement and enforce all regulations.

Given the length of the (re)launch cycles of new products, brands should start preparing their product packaging and other communication for the new rules as soon as possible.

Background

The directives follow the 2020 EU consumer agenda and circular economy action plan, aligning with the European Green Deal. A good overview can be found here: https://environment.ec.europa.eu/strategy/circular-economy-action-plan_en

Basics

What is a “green claim”?

According to the EU / European Commission, a “green claim” (or “environmental claim”) is defined as a commercial or marketing claim that suggests or otherwise creates the impression that a product or service is environmentally friendly (i.e., has a positive impact on the environment), or is less damaging or harmful to the environment than competing goods or services, or that it has improved over time.

What is the Green Claims Directive?

The Green Claims Directive aims to stop greenwashing by setting standards for environmental claims. The spark came from a 2020 study showing that 53% of environmental claims in the EU were vague or misleading. If your company makes claims like "T-shirt made of recycled plastic bottles" or "ocean-friendly sunscreen," you'll need to meet minimum standards for backing them up.

This directive doesn't cover claims already under existing EU rules, such as the EU Ecolabel. To make a claim, you'll need independent verification and robust scientific evidence, keeping in mind any trade-offs for a balanced view. See also Scope.

The directive is still awaiting approval but is part of a larger EU effort, including the European Green Deal, to empower consumers and promote a greener economy.

Please note: The EU Directive on Empowering Consumers for the Green Transition (ECGT; the "sister directive" to the EU Green Claims Directive) was adopted by the Council on February 20th. See also the quick overview.

Scope

Which green claims fall under the scope of the Green Claims Directive?

The EU Green Claims Directive (GCD) sets out clear guidelines for various types of green claims to ensure transparency and accuracy in environmental marketing. The directive distinguishes between two main types of claims:

1. Explicit Green Claims: These are direct and clear statements or assertions made in written form or orally about the environmental benefits of a product or service. Examples include phrases like “100% recycled material” or “carbon-neutral production.”
2. Implicit Green Claims: These are indirect suggestions or implications about the environmental benefits of a product or service, often conveyed through images, colors, or vague terms like “eco-friendly” without specific details.

Here are the primary types of explicit green claims covered under the directive:

1. Generic Environmental Claims: Broad claims that a product or service is environmentally friendly, such as “eco-friendly,” “green,” or “sustainable.” The directive ensures these claims are backed by substantial evidence to prevent greenwashing.
2. Specific Environmental Claims: Claims related to particular environmental benefits or attributes of a product or service, such as “made from recycled materials,” “biodegradable,” or “low carbon footprint.” These claims must be substantiated with precise and relevant data.
3. Comparative Environmental Claims: Claims that compare the environmental impact of one product or service to another, such as “50% less plastic than the previous version” or “more energy-efficient than competitor products.” These claims must be fair, clear, and supported by robust evidence.
4. Claims About Improvements Over Time: Claims that highlight how a product or service has become more environmentally friendly compared to its past versions, such as “now with reduced emissions” or “improved recycling process.” The directive requires these claims to be transparent and verifiable.

Which green claims or labels are not covered by the GCD?

The EU Green Claims Directive (GCD) specifies certain exclusions and limitations to ensure clarity and avoid overlaps with other regulations. Here are the key exclusions:

Claims Regulated by Other Union Legislation: The directive does not apply to environmental claims, labels, or schemes that are already regulated by other EU laws. For instance, claims related to organic farming, which fall under the Regulation (EU) 2018/848, are excluded.

Financial Services: Environmental claims related to financial services, such as green loans or green home insurance, are not covered by the GCD. These services have separate regulations concerning their environmental claims and certifications.

Mandatory Reporting by Large Companies: Large companies that report sustainability information according to the European sustainability reporting standards are exempt from the GCD when it comes to those specific reports. This ensures no duplication of reporting efforts and maintains consistency in reporting standards.

Certified Organic Products: Claims on products certified as organic under existing EU organic farming regulations are excluded from the directive. This ensures consistency and avoids overlapping regulatory requirements.

Green Claims for Financial Incentives: Offers that involve financial incentives for meeting environmental criteria, such as green loans or discounts for sustainable behaviors, are not regulated by the GCD.

Which businesses are affected by the Green Claims Directive?

If you're a business operating in the EU, the Green Claims Directive likely applies to you, except for some small businesses. You'll need to adhere to guidelines on substantiating and communicating your green claims, and secure a certificate of conformity from an accredited verifier.

Does the Green Claims Directive exclude any sectors, businesses, or product categories?

Yes, the Directive exempts microenterprises with fewer than 10 employees and less than EUR 2 million in annual turnover. They can still get a certificate of conformity if they meet the criteria, but they're not strictly bound by all the directive's provisions.

It also doesn't cover claims on organically certified products, sustainability information in financial services, or reports from businesses following EU sustainability standards. These are still subject to other regulations.

Are businesses from outside the EU that are selling to EU consumers also affected by the Green Claims Directive?

Yes, if you're a non-EU business targeting EU consumers, you'll need to comply with the directive. The aim is to create a global standard for environmental claims, especially for companies interacting with the EU market.

Be aware that new private environmental labels are generally not allowed. If you think your label adds value in terms of environmental goals or scope, you'll need to seek approval from the Commission.

Timeline

When does the Green Claims Directive come into effect at EU and member state level?

Current Status

• Trilogue Negotiations: The Council of the EU is in talks with the European Parliament and the European Commission to reconcile their positions on the directive.

Next Steps

• Provisional Agreement: Reaching a provisional agreement during trilogue negotiations.
• Council Adoption: Formal adoption of the agreed text by the Council of the EU.
• Parliament Approval: A plenary vote by the European Parliament to approve the final text. The last significant plenary vote was on 12 March 2024, adopting the first reading position.
• Publication and Entry into Force: Publication in the Official Journal of the European Union and entry into force 20 days after publication.
• Transposition Period: Member States have 18 months to transpose the directive into their national laws and regulations. They must start enforcing these rules 24 months after the directive’s effective date.

Who oversees the implementation of the Green Claims Directive?

The European Commission takes the lead in overseeing the directive's implementation across Member States. Member States themselves are tasked with establishing verification procedures for environmental claims and designating competent authorities for coordination. Additionally, the Commission is set to evaluate the directive five years after it takes effect.

Criteria & Requirements

What are the key requirements for substantiating environmental claims?

The EU Green Claims Directive mandates that all environmental claims must be substantiated using current, widely recognized scientific evidence. This includes considering the entire lifecycle of the product, from production to disposal, to provide a comprehensive assessment of its environmental impact. Here are the detailed requirements traders must follow:

Scope of Claims: Clearly identify whether the claim pertains to the entire product, part of the product, or specific activities of the trader.

Scientific Evidence: Use widely recognized scientific evidence and accurate information to support the claims.

Lifecycle Perspective: Demonstrate that the environmental impacts subject to the claim are significant from a lifecycle perspective.

Comprehensive Environmental Aspects: Take into account all relevant environmental aspects for the performance assessment.

Legal Compliance: Ensure that the claim is not equivalent to existing legal requirements imposed on products or traders.

Comparison to Common Practices: Provide information on whether the product or trader performs significantly better regarding environmental aspects compared to common practice standards.

Avoiding Significant Harm: Identify if improving one environmental aspect leads to significant harm in other areas, such as climate change or biodiversity.

Greenhouse Gas Emissions Offsets: Separate any greenhouse gas emissions offsets from the actual emissions and provide detailed descriptions of these offsets.

Primary and Secondary Information: Include primary information available on environmental impacts. If primary information is unavailable, relevant secondary information representative of the specific value chain should be used.

Clear Communication: Information supporting the claim must be made accessible to consumers, either directly or through digital means such as QR codes or weblinks.

Comparative Claims: In addition to these, when making a comparative explicit environmental claim, traders must ensure the data and information used for assessing environmental impacts are equivalent and generated or sourced in a similar manner for both the product/trader and the compared entities.

How are carbon credits regulated under the Green Claims Directive?

The provisions dealing with carbon credits in the EU Green Claims Directive are notably stringent and prescriptive, reflecting a broader focus on transparency and accuracy in environmental claims. Here are the key requirements and restrictions businesses need to be aware of:

1. Separation of Carbon Credits:
2. • Traders must distinctly separate carbon credits used for substantiating climate-related claims from greenhouse gas emissions.
   • They must specify whether these credits pertain to reductions or removals of carbon emissions. This requirement emphasizes transparency in the use of carbon credits.
2. Contribution Claims:
3. • Any claims involving the purchase of carbon credits that do not relate directly to value chain emissions must be clearly distinguished from claims about improved climate or environmental impacts of the product or trader.
   • This ensures that the use of carbon credits is transparent and not misleading to consumers​
3. Compensation Claims:
4. • Compensation claims using carbon credits are restricted to the residual emissions of a trader. These are emissions that remain after achieving approximately 90-95% reduction in greenhouse gas emissions.
   • The European Commission will adopt a method for defining residual emissions based on an emission reduction pathway compatible with limiting global warming to 1.5°C within a year of the directive's entry into force​.
4. Verification and Certification:
5. • Carbon credits used for substantiating environmental claims must be independently verified and certified.
   • Only Union-issued credits, certified under the Carbon Removal Certification Framework Regulation (CRCF), will be acceptable for compensating residual emissions. Other units may be permitted in duly justified cases, provided they meet equivalent standards recognized by the Commission.
5. Permanent Removals:
6. • For compensation of residual fossil emissions, only permanent removals as defined under the CRCF will be considered adequate. Permanent removals refer to practices capturing and storing atmospheric or biogenic carbon for several centuries, excluding enhanced hydrocarbon recovery.
6. Future Environmental Performance Claims:
7. • Claims about future environmental performance based on carbon credits must comply with the European Sustainability Reporting Standards (ESRS). These standards provide detailed rules for disclosure around climate targets and ensure rigorous substantiation of such claims.
7. Review and Tightening of Rules:
8. • The directive includes a provision for the European Commission to evaluate its effectiveness within five years, particularly focusing on whether traders are effectively prioritizing emission reductions in their operations and value chains. This review may lead to further tightening of rules related to the use of carbon credits.

A related landmark ruling by the German Federal Court of Justice (BGH) on June 27, 2024 - I ZR 98/23:

The German Federal Court of Justice has ruled that advertising with the term “climate-neutral” is only permissible if it is clearly explained in the advertisement itself what this specifically means. In the case at hand, a gummy and liquorice company was sued for advertising in a trade journal with “Since 2021, [the defendant] has been producing all products climate-neutral,” although the manufacturing process is not CO2-neutral and climate neutrality is achieved through compensation measures. The lower courts had dismissed the lawsuit, but the Federal Court of Justice ruled in favor of the plaintiff, the Central Office for Combatting Unfair Competition.

The Federal Court of Justice emphasized that there is a particularly high need for clarification in environmental advertising. “In advertising that uses an ambiguous environmental term like ‘climate-neutral,’ it must therefore be regularly explained already in the advertisement itself what specific meaning is decisive in order to avoid misleading.” References outside the advertisement are not sufficient, as reduction and compensation of CO2 emissions are not equivalent measures and reduction is a priority.

Key Takeaways

• Clarity in advertising: Ensure that terms like “climate-neutral” are clearly defined in the advertisement.
• Distinguishing measures: Clearly state whether climate neutrality is achieved through reduction or compensation.
• Direct clarification: Provide the necessary information directly in the advertisement, rather than only referring to external sources.
• Avoid misleading information: Make sure your advertising does not use ambiguous terms that could lead to misunderstandings. 

What are the Product and Organisation Environmental Footprint (PEF/OEF) methods mentioned in the Green Claims Directive?

The Product Environmental Footprint (PEF) and Organisation Environmental Footprint (OEF) methods mentioned in the Green Claims Directive are standardized tools designed to measure and assess the environmental impacts of products and organizations. These methods utilize life cycle assessment (LCA) approaches to provide a comprehensive evaluation of environmental impacts, from resource extraction to end-of-life disposal. Here’s a detailed explanation:

Life Cycle Assessment (LCA): The PEF and OEF methods employ LCA to quantify the environmental impacts associated with all stages of a product’s life or an organization’s activities. This includes material and energy flows, emissions, and waste generation.

International Standards: These methods are based on internationally recognized standards (such as those of the International Organisation for Standardisation (ISO) 14040 and ISO 14044), ensuring consistency and reliability in how environmental impacts are measured and reported.

Comprehensive Environmental Impact Assessment: The PEF and OEF methods consider various environmental aspects, including greenhouse gas emissions, water use, resource depletion, and other significant impacts. This holistic approach helps companies identify and mitigate their environmental footprint effectively.

Supply Chain Considerations: Both methods take into account the environmental impacts along the entire supply chain, from raw material extraction through manufacturing, distribution, use, and end-of-life stages. This helps businesses understand and reduce impacts not just within their operations but throughout their supply chain.

Is there a mandatory standard methodology for assessing the footprint?

No, there isn't a one-size-fits-all standard methodology for assessing environmental footprints. Initially, the European Commission looked into using EU product and organization environmental footprint methods as a standard. However, it found that these methods don't cover all types of products or all kinds of environmental impacts. Therefore, the Commission opted for a more flexible approach rather than a single, standardized method.

Pre-approval, Verification, and Self-Declaration

How should businesses verify or certify their Green Claims?

UPDATED after second trilogue negotiation on the Green Claims Directive, held on 24 April 2025.

The EU Green Claims Directive mandates that explicit environmental claims are substantiated and verified before being made public. The approach to verification differs based on company size and claim complexity:

General Principle: All businesses making explicit green claims must ensure they are clear, accurate, and substantiated by scientific evidence covering the full lifecycle, unless specific exemptions apply.

For Large Enterprises:

• Full Third-Party Verification: Typically, large enterprises will need to undergo a full verification process by an independent, accredited third-party verifier (accredited under Regulation (EC) No 765/2008 or an environmental verifier under Regulation (EC) No. 1221/2009).
• Certificate of Conformity: Upon successful verification, the verifier issues a Certificate of Conformity, recognized EU-wide, confirming the claim meets the Directive’s standards.
• Actionable: Begin cataloging all green claims and gathering comprehensive lifecycle assessment data. Identify and engage with accredited verifiers early.

For Small and Medium-sized Enterprises (SMEs):

• Standard Third-Party Verification: SMEs can use the full third-party verification process like large enterprises.
• Accelerated Verification: SMEs can benefit from a streamlined, faster verification process for claims that:
• • Align with EU-approved methodologies (e.g., Product Environmental Footprint - PEF guidelines).
  • Are based on existing recognized environmental labels (e.g., EU Ecolabel criteria, EN ISO 14024 Type I ecolabels). For example, a claim like "made with 50% recycled materials" referencing an established standard.
  • The Commission is expected to publish a list of such eligible claims by mid-2026.
• Documentation: This pathway allows for abbreviated documentation.
• Financial Support:
• • Verification fees will be on a sliding scale based on company size, claim complexity, and revenue.
  • SME support hubs will be established by member states by 2027, offering free access to digital tools for lifecycle assessments and template documentation.
  • EU funding may offset 50% of verification costs for SMEs during the first three years of implementation.
• Transition Period: SMEs have a 42-month transition period after the Directive's adoption (expected late 2025), with enforcement likely starting mid-2029.
• Actionable:
• 1. Audit your current claims: Identify which might qualify for accelerated verification based on existing EU methodologies or labels.
  2. Watch for the Commission’s list of eligible claims (mid-2026).
  3. Plan to utilize SME support hubs and explore funding options once available.
  4. Strengthen documentation practices for supply chain data and environmental impact assessments.

For Microenterprises (fewer than 10 employees, annual turnover under €2 million):

• Self-Declaration for Low-Risk Claims: Microenterprises are exempt from mandatory third-party verification for claims deemed "low-risk."
• • Low-risk claims typically pertain to impacts with well-understood mitigation pathways (e.g., recyclability certified under Directive 94/62/EC) or rely on EU-approved calculation methods.
  • Instead of third-party verification, they can submit self-declarations accompanied by robust technical documentation (e.g., lifecycle analysis reports, supplier certifications).
• Audits & Penalties: National authorities retain the right to audit these self-declarations. Non-compliant firms can face penalties up to 2% of annual turnover.
• Fee Cap: If microenterprises opt for or require third-party verification (e.g., for higher-risk claims or market advantage), fees are capped at a maximum of €500 per claim.
• Actionable:
• 1. Assess if your claims are genuinely "low-risk" and eligible for self-declaration.
  2. If so, meticulously prepare and maintain comprehensive technical documentation to back up your claims.
  3. Be aware of potential audits and ensure your documentation is readily available and accurate.

General Exemptions/Considerations:

• Officially Recognized Ecolabels: Claims based on officially recognized EN ISO 14024 Type I ecolabels (like the EU Ecolabel) benefit from simplified procedures as they are already rigorously verified.
• CSRD/EU Taxonomy: Claims compliant with the Corporate Sustainability Reporting Directive (CSRD) or EU Taxonomy automatically qualify for simplified pathways, avoiding duplication.

What is the process for pre-approval and verification of green claims?

UPDATED after second trilogue negotiation on the Green Claims Directive, held on 24 April 2025.

The Directive mandates a pre-approval (substantiation and verification) process before a green claim can be used. The specifics vary by business size and claim type:

General Requirements for Verifiers (when third-party verification is used):

• Independence: Verifiers must be operationally and financially independent, free from conflicts of interest.
• Expertise: They must possess proven expertise in environmental science and assessment methods.
• Confidentiality: Strict confidentiality regarding reviewed information is required.

Process Involving Third-Party Verification (Mainly for Large Enterprises, SMEs using standard/accelerated verification):

1. Submission: The business submits its explicit environmental claim along with all substantiating evidence (including lifecycle assessment data where required) to an accredited verifier.
2. Assessment: The verifier assesses the claim against the Directive’s requirements, including:
3. • Content (Article 3 GCD): Substantiation by robust scientific evidence, reflection of significant environmental impacts.
   • Communication (Article 5 GCD): Clear, unambiguous, and transparent presentation to consumers.
   • Comparative Claims (Articles 4 & 6 GCD): Fairness and accuracy in comparisons.
3. Certificate of Conformity: Upon successful verification, the verifier issues a Certificate of Conformity. This certificate is recognized across the EU, facilitated by sharing within the Internal Market Information System (IMI).
4. Timeline: While MEPs previously indicated a 30-day target for verification, the "accelerated verification" for SMEs implies a quicker process for eligible claims, though specific timelines are yet to be detailed.
5. Costs:
6. • SMEs: Benefit from tiered fee structures. Microenterprises pay no more than €500 per claim if they use a verifier. EU funding may cover 50% of SME verification costs for the first 3 years.
   • SME Support Hubs: By 2027, these hubs will provide free tools and templates.

Specific Process for Microenterprises (Self-Declaration for Low-Risk Claims):

1. Internal Substantiation: Microenterprises must rigorously substantiate their low-risk claims internally.
2. Technical Documentation: Compile detailed technical documentation (e.g., supplier certifications, data on recycled content, relevant LCA data if available).
3. Self-Declaration: Make the claim public accompanied by the self-declaration and ensure access to the technical documentation.
4. No Mandatory Pre-Verification by Third Party: For these low-risk claims, a third-party verifier is not mandatory before making the claim.
5. Audits: National authorities can conduct post-market surveillance and audit these self-declarations. If claims are found non-compliant, significant penalties apply.

Periodic Re-verification (Applies to ALL claims, including those self-declared):

• Standard Cycle: Re-verification (or re-substantiation for self-declared claims) is mandatory every five years. Businesses must submit updated documentation.
• Extended Cycle for Low-Volume SMEs: SMEs producing under 10,000 units annually may extend this period to seven years, provided they demonstrate stable operations and production processes.
• Trigger Conditions: Re-verification is also required if circumstances change that could affect the claim's accuracy (e.g., new production methods, different materials).

Actionable Steps:

• All Businesses: Establish a system for documenting and regularly reviewing the evidence supporting your green claims.
• SMEs & Microenterprises: Actively monitor communications from the EU Commission and national authorities regarding support hubs, funding, and lists of pre-approved claims/methodologies.
• During Transition (SMEs): Use the 42-month period to prepare by auditing claims, building documentation, and seeking training.

When can a trader use self-declaration?

UPDATED after second trilogue negotiation on the Green Claims Directive, held on 24 April 2025.

Under the updated EU Green Claims Directive, the option for self-declaration (without mandatory prior third-party verification) is specifically carved out for microenterprises for certain types of claims.

Who Can Use Self-Declaration?

• Microenterprises: Defined as businesses with fewer than 10 employees and an annual turnover of less than €2 million.

What Types of Claims are Eligible for Self-Declaration by Microenterprises?

• Low-Risk Claims: These are claims where the environmental impact and mitigation pathways are well-understood and can be substantiated with clear evidence. Eligibility is based on:
• 1. Low Environmental Risk: The claim pertains to impacts with well-understood and verifiable mitigation pathways (e.g., a claim about using recycled content certified under existing standards like Directive 94/62/EC on packaging).
  2. Standardized Methodologies: The claim can be substantiated using EU-approved calculation methods or established standards (e.g., referencing specific EU Ecolabel criteria for a component, or Product Environmental Footprint (PEF) guidelines where applicable and simplified).
• Examples of Potential Low-Risk Claims for Microenterprises (if properly documented):
• • "Made with X% certified organic cotton" (supported by supplier GOTS certificates).
  • "Our packaging uses Y% post-consumer recycled plastic" (supported by supplier declarations and recognized certifications).
  • Claims that a product characteristic exceeds minimum legal environmental requirements, if easily verifiable.
• Important Note: The Commission is expected to publish a list of claims eligible for simplified procedures (which would inform "low-risk" interpretations) by mid-2026.

What Claims are EXCLUDED from Self-Declaration (and require full verification)?

• Complex Claims: Claims involving complex assessments, such as:
• • "Carbon neutral" or "climate neutral" (especially those relying on offsets).
  • Biodiversity-related claims (e.g., "biodiversity friendly," "net positive impact on biodiversity").
• Comparative Claims: Claims comparing a product/service to a competitor's, unless they follow very strict rules and possibly simplified pathways if based on recognized EU methods.
• Claims about Future Environmental Performance: These generally require more robust, forward-looking substantiation that may not fit self-declaration.

What is "Specific Technical Documentation" (STD) for Self-Declaration?
Even with self-declaration, microenterprises must prepare and maintain comprehensive Specific Technical Documentation (STD) before making the claim public. This documentation is crucial for potential audits by national authorities.
Contents should include:

• Clear Description of the Claim: What is being claimed and its scope.
• Supporting Evidence: All data, calculations, supplier certifications (e.g., for recycled content, organic materials), relevant lifecycle considerations (even if a full LCA isn't mandated for the specific claim), and test results that substantiate the claim.
• Compliance Details: How the claim aligns with any referenced standards or methodologies.
• Transparency: The information should be sufficient to allow national authorities (or a third party, if voluntarily engaged) to assess the claim's validity.

Process for Microenterprises Using Self-Declaration:

1. Assess Claim: Determine if the claim genuinely qualifies as "low-risk."
2. Prepare STD: Compile all necessary supporting technical documentation before launching the claim.
3. Make Claim Public: The claim can then be made public. It's good practice to mention that substantiating information is available.
4. Maintain & Update STD: Keep the documentation up-to-date, especially if materials, processes, or suppliers change.
5. Be Audit-Ready: Understand that national authorities can audit self-declared claims and impose penalties (up to 2% of annual turnover) for non-compliance.

Actionable Advice for Microenterprises:

• Prioritize Accuracy: It's better to make fewer, highly credible claims than many poorly substantiated ones.
• Document Everything: Treat your STD as a critical business asset. Supplier invoices, certifications, and internal process notes are all key.
• Seek Guidance: If unsure, consult resources from SME support hubs (once available) or consider voluntary verification for borderline claims, especially given the low fee cap (€500).
• Stay Informed: Keep an eye on Commission guidance and lists of eligible claims.

How should businesses communicate or share Green Claim evidence or verifications with consumers? 

Providing Information Together with Claims: Businesses should provide the necessary verification or certification information along with the environmental claim. This can be done physically or digitally using a data carrier or link.

Use of Digital Formats: To make it easier for consumers to access detailed information, businesses are encouraged to use digital formats like web links or QR codes. This information should lead to a website with more comprehensive details.

Information on Packaging and Accompanying Materials: The verification or certification details can be included on the product’s packaging, accompanying product information, a product-specific microsite, or an online selling interface. For oral claims, such as those made via radio or TV, businesses must inform consumers where to find the substantiation information.

Avoiding Duplication of Data Carriers: Businesses should not duplicate data carriers on products. If other EU legislation requires digital product information, the same data carrier should be used for providing environmental claim information.

Summarizing Substantiation Assessments: A clear and easy-to-understand summary of the substantiation assessment should be provided to consumers, indicating the environmental characteristics covered by the claim and including the certificate of conformity and contact information of the verifier.

Compliance Preparation

What steps should businesses take to comply with the directive?

To comply with the EU Green Claims Directive, businesses must establish a robust environmental claims management framework. Here are the key steps:

1. Developing an Environmental Claims Management Framework:
2. • Gathering and Analyzing Data: Collect comprehensive environmental data across the product's lifecycle, including raw materials, production processes, distribution, and disposal. This data should be accurate, verifiable, and up-to-date.
   • Conducting Life Cycle Assessments (LCAs): Utilize LCAs to evaluate the environmental impact of products or services comprehensively. LCAs help identify the areas where environmental improvements can be made and substantiate green claims​.
2. Internal Processes and Controls:
3. • Updating Communication Guidelines: Ensure that all environmental claims are communicated clearly and transparently. This includes training marketing and communications teams to accurately present environmental data.
   • Ensuring Data Integrity and Transparency: Implement processes to maintain the accuracy and transparency of environmental data. Regular audits and updates should be part of the framework to keep the information current​.
3. External Verification:
4. • Selecting Accredited Verifiers: Choose independent, accredited third-party verifiers to validate green claims. These verifiers must be financially and personally independent, possess the necessary expertise, and adhere to strict confidentiality​.
   • Preparing for Verification: Prepare all necessary documentation and data for the verification process. This includes detailed reports on the product lifecycle, evidence supporting environmental claims, and internal audit reports.

How can businesses prepare for external verification?

Preparation for external verification involves several key steps:

1. Documentation: Gather all relevant documentation that substantiates the environmental claims, including lifecycle assessment reports, scientific studies, and internal audit results.
2. Selection of Verifiers: Identify and engage with accredited verifiers who have the expertise and independence required to assess the claims objectively.
3. Internal Reviews: Conduct internal reviews and mock audits to ensure all claims and supporting documents are accurate and ready for the verification process.
4. Continuous Monitoring: Implement continuous monitoring processes to ensure that the claims remain accurate and up-to-date, reflecting any changes in product lifecycle or scientific evidence​.

What are the common challenges businesses might face and how can they overcome them?

Businesses may face several challenges in complying with the directive, including:

1. Financial and Operational Impacts:
2. • Increased Costs: The costs associated with gathering detailed environmental data, conducting LCAs, and undergoing external verification can be significant. To mitigate these costs, businesses should integrate sustainability efforts into their existing processes and seek cost-sharing opportunities through partnerships and grants​.
   • Operational Changes: Implementing new processes and controls can be operationally challenging. Businesses should develop a clear implementation plan, involve cross-functional teams, and leverage existing systems where possible​​.
2. Knowledge and Data Gaps:
3. • Addressing Gaps: Identify any gaps in knowledge or data early in the compliance process. Businesses may need to invest in training and development for staff or hire external experts to fill these gaps​.
3. Maintaining Compliance Over Time:
   
4. • Regular Updates: Ensure that all environmental claims are regularly reviewed and updated to reflect the latest scientific evidence and changes in the product lifecycle. Continuous monitoring and periodic re-verification are crucial for maintaining compliance. 

Enforcement

How is the Green Claims Directive enforced?

The enforcement of the Green Claims Directive is detailed in Article 16, titled “Complaint-handling and access to justice.” Under this article, individuals or organizations with a “legitimate interest” can submit substantiated claims to the designated national authorities. Here are the key points:

Complaint Handling: Individuals or organizations with a legitimate interest can file complaints regarding non-compliance with environmental claims. These complaints must be substantiated and directed to the national authorities designated by each Member State.

National Authorities and Coordination Mechanism: Member States are responsible for setting up competent authorities to handle these complaints. Additionally, a coordination mechanism must be established to ensure effective enforcement and consistency across different regions.

Verification Procedures: The Directive requires Member States to establish procedures for verifying the environmental claims made by products or traders in the market, as well as ecolabeling schemes. This includes using company-specific, primary data to support green claims.

What is the complaint process under the Green Claims Directive, from first notice to potential penalties?

1. An eligible individual or entity submits complaint to designated authority.
2. The competent authority reviews the complaint and assesses the claim's compliance with the Directive.
3. If non-compliant, the authority orders corrective action within 30 days.
4. Failure to comply results in enforcement measures such as warnings or fines.
5. The complainant may have option for legal action at national or EU level.

What are potential penalties for non-compliance with the Green Claims Directive?

Non-compliance with the Green Claims Directive can lead to significant penalties designed to enforce adherence and prevent greenwashing. The penalties include:

Fines: Businesses may face fines up to 4% of their annual turnover in the affected Member States. This is aimed at ensuring that the financial consequences are significant enough to deter non-compliance.

Revenue Seizure: Authorities may seize revenues obtained from transactions related to the non-compliant environmental claims, ensuring that businesses do not profit from misleading information.

Exclusion from Public Procurement and Funding: Non-compliant businesses may be excluded from public procurement processes and access to public funding for up to 12 months. This exclusion acts as a deterrent by impacting potential business opportunities.

How can consumers help to hold businesses accountable under the Green Claims Directive?

To keep businesses in check, consumers can rely on "qualified entities" under the Representative Actions Directive (EU) 2020/1828. These organizations, often consumer groups, can legally challenge companies if there are doubts about the authenticity of their green claims. In essence, you can contribute to accountability by supporting or collaborating with these qualified entities.

Do consumers have any actionable rights and entitlements under the Green Claims Directive?

Consumers don't have actionable rights under the Green Claims Directive. However, they do benefit indirectly. The Directive aims to provide consumers with reliable environmental claims and labels, helping them make informed purchasing decisions. Additionally, the Directive contributes to a more level playing field in the internal market, offering cost-saving opportunities for businesses trading across borders. This, in turn, accelerates the green transition and enhances environmental protection, which ultimately benefits consumers.

Impact

How does the Green Claims Directive aim to reduce greenwashing?

The directive aims to cut down on greenwashing by setting strict verification and substantiation standards for environmental claims. Member States will oversee these processes, relying on independent, accredited verifiers. So, if your company makes a green claim, be prepared to back it up with robust, widely recognized scientific evidence.

If you're comparing your product to others, make sure the comparison is fair and based on similar data. Aggregate scores that lump various environmental impacts together are not allowed unless they align with EU rules.

Regarding labels, EU-level schemes are the gold standard. New public labeling schemes must be at the EU level, and new private schemes need pre-approval and must show they're more ambitious environmentally. All environmental labels need to be transparent, third-party verified, and reviewed regularly.

Does the European Commission see any competitive disadvantages arising from the Green Claims Directive?

No, the European Commission actually sees the directive as a boost for companies genuinely focused on eco-friendly practices. The idea is that a uniform set of rules can enhance your competitive edge, reduce the risk of varying legal standards, and lower costs if your claims are certified. This approach aims to build trust in EU industries, both domestically and internationally.

Regulatory context

What is the political context of the Green Claims Directive?

The directive is part of the European Green Deal, which aims to make the EU climate-neutral by 2050. It's specifically nested within the Circular Economy Action Plan (CEAP), which includes the Initiative on Substantiating Green Claims (ISGC). This initiative works alongside other EU policies focused on empowering consumers, designing sustainable products, and implementing a farm-to-fork strategy. Together, these efforts aim to establish a coherent policy landscape that encourages sustainable goods and services.

The directives follow the 2020 EU consumer agenda and circular economy action plan, aligning with the European Green Deal. A good overview can be found here: https://environment.ec.europa.eu/strategy/circular-economy-action-plan_en

Is there existing national regulation similar to the Green Claims Directive?

Yes, several countries have national laws that align with the new Green Claims Directive. Here's a quick list for reference:

• France: French Environmental Code
• UK: Consumer Protection from Unfair Trading Regulations
• Netherlands: Dutch Sustainability Claims Code
• Sweden: The Swedish Marketing Act
• Denmark: The Danish Marketing Act
• Belgium: The Environmental Advertising Code
• Germany: Act Against Unfair Competition
• Hungary: Acts on Competition and Unfair Commercial Practices against Consumers
• Italy: Italian Consumer Code
• Finland: Finnish Consumer Protection Act
• Poland: Acts on Combating Unfair Competition and Unfair Commercial Practices
• Czech Republic: Czech Consumer Protection Act No. 634/1992

Some countries also offer specialized guidelines on environmental claims, such as Sweden, Denmark, Finland, and Norway with their Guidance from the Consumer Ombudsman, or Hungary's Green Marketing Guidance.

Does the Green Claims Directive extend or replace any previous EU directives?

The Green Claims Directive doesn't replace previous EU directives but rather enhances them. It works alongside the Unfair Commercial Practices Directive (UCPD), which already addresses misleading advertising and sales practices, including green claims.

The European Parliament and the Council are revising the UCPD based on a new proposal called the "Directive on Empowering Consumers for the Green Transition," submitted in March 2022. This proposal aims to make the UCPD more effective against greenwashing by adding a blacklist of unfair practices. The Green Claims Directive complements this by setting out specific rules for verifying and communicating environmental claims before they're marketed.

Criticisms & Updates

Which stakeholders were consulted during the creation of the Green Claims Directive and what was their feedback?

The Commission engaged stakeholders through public and online consultations, as well as workshops. Business associations and large companies called for independent certification and flexible ways to communicate environmental information. Environmental and consumer NGOs recommended leveraging existing tools like type 1 ecolabels. Public authorities and citizens also favored independent, accredited certification.

A 2020 workshop highlighted the need to tackle greenwashing and support a harmonized EU approach, emphasizing the importance of trusted ecolabels like the EU Ecolabel.

What are criticisms about the EU Green Claims Directive?

Critics highlight several concerns about the directive:

Weak Enforcement: Skeptics worry that without robust enforcement by national authorities, the directive won't effectively curb misleading green claims.

Narrow Focus: The directive has come under fire for primarily emphasizing carbon emissions and not adequately addressing other environmental factors like toxicity and recyclability.

Methodology Gaps: Environmental organizations point out the absence of a unified EU methodology for assessing environmental impacts, leaving room for companies to choose methods that paint them in a better light.

Diluted Guidelines: Consumer and environmental advocates argue that industry lobbying has watered down the rules, making them too vague to be effective.

The overall sentiment is that while the directive is a step in the right direction, its success hinges on strong enforcement, a broader focus on environmental factors, and clear, unified methodologies.

What are the key improvements that organisations are suggesting for the new Green Claims Directive?

Various organizations have proposed the following improvements (some of these have since been addressed in the latest drafts):

Ban Carbon Neutrality Claims: Critics advocate for a ban on all claims about carbon or climate neutrality to prevent misleading statements. They suggest carbon credits should only reference separate contributions to climate action.

Limit Future Claims: Proposals suggest restricting future environmental claims to the company level, rather than allowing them for individual products. This aims to focus efforts on overall organizational improvements.

Strengthen Criteria for Future Claims: Recommendations include allowing future-oriented environmental claims only if they meet specific, science-based criteria. These claims should also be verified by an independent system and backed by a realistic implementation plan.

Pre-Approved Schemes: Organizations suggest introducing a list of pre-approved certification schemes and sustainability labels, preferably at the EU level. This would establish a uniform set of ambitious criteria.

International Alignment: Recommendations call for harmonizing EU methods with globally recognized standards and ensuring that national schemes that meet these criteria remain operational.

By considering these suggestions, the directive could address some of the current criticisms and create a more robust framework for environmental claims.

What are the biggest opportunities for businesses seen through the Green Claims Directive?

The Green Claims Directive offers several opportunities for businesses:

Spur Market Opportunities: By encouraging competition around sustainable products, the directive opens new market segments, allowing businesses to diversify and grow.

Enhance Product Quality: The focus on sustainability can lead to improved product performance, benefiting both consumers and manufacturers.

Increase Credibility: The directive provides a framework for businesses to substantiate their environmental claims. This can build trust among consumers and help companies stand out.

Avoid Greenwashing Pitfalls: Businesses can sidestep the reputational risks associated with greenwashing by adhering to the directive's standards.

Level Playing Field: By regulating private environmental labels, the directive makes it easier for businesses to compete fairly, reducing consumer confusion in the process.

Overall, the directive aims to reward genuine sustainability efforts, spur innovation, and drive market growth, while holding businesses accountable for their environmental claims.

Sources & Disclaimer

What sources did we use? 

1. European Commission, 2023

2. European Commission, 2019

3. European Commission, 2020

4. European Commission, 2022

5. Bird & Bird, 2023

6. Ecostandard, 2022

7. Ecostandard, 2023

8. FoodDrinkEurope, 2023

9. Copa - International Federation of Organic Agriculture Movements, 2023

10. Applia - Home Appliance Europe, 2023

Is this legal advice?

No, the content made available does not constitute individualised legal advice. It merely serves as general information. The content is not made available in the context of a contractual legal counsel relationship.