The EU’s clampdown on greenwashing is promising, but it still leaves gaps

14 Mar

The new Directive on Empowering Consumers for the Green Transition is a welcome step towards protecting consumers against unsubstantiated green claims. But gaps still remain and more needs to be done to prevent companies from evading scrutiny, says our Legal Officer Dominika Leitane.

Consumers around the world are becoming increasingly environmentally conscious. And at the same time, they are faced with a largely unregulated market of unreliable ‘green’ claims.

This makes it difficult to make truly sustainable choices. The European Commission’s new consumer agenda highlights the need for consumers to be better protected against greenwashing. It explains that this is: “information that is not true or [is] presented in a confusing or misleading way to give the inaccurate impression that a product or enterprise is more environmentally sound”.

The Directive to empower consumers for the green transition (“Empowering Consumers Directive”) seeks to strengthen the regulation of environmental advertising and empower consumers to make informed choices. The European Parliament adopted the Directive earlier this year, and the European Council has now followed suit. The rules set out in the Directive are expected to apply from 2026 onwards, once they have been published and transposed into national law by member states.

What’s the scope of the Empowering Consumers Directive?

The Empowering Consumers Directive will amend existing EU consumer rights laws by bringing certain greenwashing strategies within the ambit of unfair commercial practices. It will also establish a range of requirements to be met when making environmental claims.

The new Directive will:

Limit the ability of companies to use generic environmental claims (such as ‘environmentally friendly’, ‘green’, ‘biodegradable’, ‘ecological’, and ‘climate friendly’). Any generic environmental claims will need to be backed up by excellent recognised environmental performance.
Restrict the use of sustainability labels. Any labels used must go through an independent certification process and only labels based on official certification schemes or those established by public authorities will be permitted.
Require claims about future environmental performance (e.g., ‘within 10 years, we will…’) to be supplemented with clear, objective and publicly available commitments, with a detailed and realistic implementation plan that is regularly and independently monitored.
Prohibit claims that a product has a neutral, reduced or positive impact on the environment if the claim is based on the use of greenhouse gas offsetting credits.
Require companies to specify whether their claims concern the whole product or a specific part of it.
Limit references to ‘circularity’ and ‘recycling’ by banning unsubstantiated claims of product durability, prompts to replace products earlier than strictly necessary, and presenting goods as repairable when they are not.
Ban companies from presenting something that is a legal requirement as a distinctive feature of a product.

Gaps in consumer protection against greenwashing

While these requirements are welcome, the Directive also leaves significant gaps in consumer protection against greenwashing, particularly in relation to specific criteria for making environmental claims.

The so-called Green Claims Directive (i.e., the Directive on the Verifiability and Communication of the Environmental Product Claims) should help us here. It is intended to complement the Empowering Consumers Directive by specifying such criteria and setting out the conditions for substantiating and communicating environmental claims.

However, this complementary Directive is still early in the process of being negotiated by the European Parliament. It is unlikely to be agreed before the upcoming European Parliament elections this summer, leaving the gaps in the Empowering Consumers Directive unfilled in the short term.

It is also likely that the scope of the Empowering Consumers Directive, and some of the key terms used within it, will be clarified and refined through subsequent litigation. In particular, the test for whether a specific environmental term would be considered “generic” will require further elaboration. The definition of “sustainability label” is similarly likely to attract judicial input.

Why should we tackle greenwashing?

Companies have a crucial role in addressing the climate crisis. With greenwashing practices on the rise, it is vital to prevent companies from evading scrutiny for their environmental claims. In practice, however, some of the biggest offenders in terms of greenhouse gas emissions are also some of the savviest when it comes to greenwashing techniques.

For instance, cruise lines consistently advertise Liquefied Natural Gas (LNG) as a sustainable fuel. In reality, it is a harmful fossil gas which offers no real lifecycle benefits in the shipping sector, as Opportunity Green’s in-depth study on greenwashing in the cruise industry, (Un)Sustainable from ship to shore, revealed.

When it comes to aviation, misleading promises of carbon offsetting and unsubstantiated claims about sustainable flying have been dominating greenwashing headlines for the past few years. We recently launched a legal challenge to the EU Sustainable Finance Taxonomy, under which planes running on fossil fuels could be eligible for green finance, if they meet certain weak ‘efficiency’ criteria – greenwashing of the highest order.

Examples of greenwashing laws and litigation

Against the backdrop of rampant greenwashing, there is a rising wave of anti-greenwashing laws and litigation in EU member states and beyond.

In the Netherlands, the Authority for Consumers and Markets has consistently recognised sustainability as one of its focus areas, and carried out in-depth investigations of over 170 companies’ environmental claims. And a legal case against the airline KLM over misleading advertisement claims in relation to carbon dioxide compensation measures and alternative fuels is currently awaiting a decision by the Amsterdam District Court.

Several proceedings before German courts have recently examined the meaning of the term "climate-neutral”. The cases highlighted the importance of presenting accurate and sufficient information on climate neutrality claims. It was also held that climate neutrality could not be achieved solely by compensation through forest protection projects, as this would be insufficient to compensate for the greenhouse gas emissions caused by the product.

The French Climate and Resilience Law (which came into force in 2023) deems claims unfair if they mislead consumers as to a product's environmental impact or a company's commitments. The law also makes it mandatory for certain sectors, such as clothing, food and electronic products, to display information on the environmental impact of goods and services. At the same time, a lawsuit was brought against the French oil and gas giant TotalEnergies due to its allegedly misleading pledge that it would reach company-wide net zero by 2050.

In the UK, the Advertising Standards Authority has recently made a number of rulings against airlines for greenwashing (for example, against Ryanair, Etihad, Air France-KLM and Lufthansa). Alarm has also been raised by the UK Competition and Markets Authority over claims in relation to the sustainability of hydrogen heating in homes.

Take care with environmental claims

With greenwashing lawsuits and legislation showing no sign of abating, close scrutiny of environmental claims remains a pertinent issue.

The Empowering Consumers Directive is a clear step in the right direction towards green transition. Despite its shortcomings, it introduces important safeguards which will contribute to clamping down on unsubstantiated and exaggerated environmental claims. It also creates additional avenues for holding companies accountable for their environmental claims.

With the introduction of this much-needed, harmonised approach to greenwashing in the EU, the message is clear: companies must take extreme care in using environmental claims to help them advertise their products.