Just the Facts | What is the EU Green Claims Directive?

This Just the Facts looks at the state of play of the turbulent trilogues regarding EU greenwashing rules, and asks the question – what is the Green Claims Directive all about?

EU tackles “greenwashing”

In February 2024, the EU adopted a proposed European Commission Directive which amended two other EU Directives: Directive 2011/83/EU on consumer rights and Directive 2005/29/EC on unfair business-to-consumer commercial practices. The new legislation was put forward to protect consumers from “greenwashing” practices which could mislead them “away from sustainable consumption”.

Greenwashing is essentially when a company claims its organisation or product is environmentally friendly, without meaningfully reducing its environmental impact. An example of this practice is within the clothing industry where certain fast fashion brands release environmentally sustainable or “conscious lines” in their collections; while at the same time continuing to contribute significantly to one of the world’s most-polluting industries.

Under the Directive, companies would be legally required by the EU to substantiate or verify any environmental claims made about a product or service via a third party. The 2024 Directive stipulated that an environmental claim is any voluntary or non-mandatory claim which states or implies:

“that a product, product category, brand or trader has a positive or zero impact on the environment or is less damaging to the environment than other products, product categories, brands or traders, or has improved its impact over time.”

However, in a 2024 European Commission report covering 15 Member States, national legal experts found a total of 53.3% of environmental claims among 1,305 products/services and 1,616 advertisements to be potentially misleading. Additionally, 40% of the investigated claims were unsubstantiated.

There are also currently 230 sustainability labels and 100 green energy labels in the EU, with vastly different levels of transparency.

Green Claims Directive

It is clear that challenges remain, even with the 2024 Directive now adopted and being transposed by national governments. One issue is that very similar claims are assessed as “clear” by some experts and “unclear” by others. This implies the need for more specific rules on what is considered “clear”. Another issue found was the the continuing proliferation of schemes, logos and labels, which can be confusing for consumers. Some producers have even developed their own logos or certificates, which can be problematic, especially where producers haven’t provided sufficient verification for their claims.

The “Green Claims Directive”, put forward at the same time as the 2024 Directive (also in March 2023), is intended to address some of the above shortcomings and provide common standards so that consumers know what to expect from certain logos, labels or certificates. It aims to complement the already adopted 2024 Directive by proposing more specific assessment requirements on environmental claims (i.e. on their exact substantiation, communication and verification) to deal with the discrepancy. There is also public demand for more transparent information: according to a 2020 Eurobarometer survey, 90% of Europeans agree that there should be stricter rules when calculating environmental impact and related environmental claims.

Assessment criteria

Under the Green Claims Directive, company obligations include:

• Clarifying whether a claim pertains to the entire product or only part of it;
• Using sound science, recognised international standards, and “life-cycle approach”;
• Considering all significant environmental impacts and ensuring performances exceed legal or common-practice standards;
• Transparently distinguishing emissions from offsets, and specifying offset quality;
• Using primary (company data) or secondary evidence when necessary.

The Green Claims Directive also stipulates:

• Comparative claims must rely on equivalent data, methods, and lifecycle stages.
• Communications must reflect only substantiated claims, offering usage guidance where relevant and providing accessible supporting documentation (e.g. QR codes).
• Labelling schemes must be verified, transparent in operations and access, proportionate for SMEs, scientifically robust, and equipped with dispute and compliance-exit mechanisms.
• Aggregated environmental scores are prohibited unless covered by an EU scheme.

Turbulent trilogues

On 18 June, two European People’s Party (EPP) negotiators for the Green Claims Directive sent a letter to the European Commissioner for Environment, requesting that the Directive be completely withdrawn. The concluding inter-institutional negotiation (trilogue) to reach a final agreement on the  “Green Claims Directive” was due to take place on 23 June, and both Council and Parliament had adopted their negotiating positions during the last EU mandate. In this context, on 19 June, a spokesperson for the European Commission consequently told journalists that the Commission “intended” to withdraw the proposal, with a follow-up written statement.

Less than three hours before it was due to commence, the trilogue was cancelled by the Polish Presidency of the Council of the EU essentially due to the Commission’s announcements, which has also prompted positions to shift within the Council itself, notably on the part of Italy which stated that it supported the entire withdrawal.

Over the course of one week, the Commission’s announcement triggered a political crisis in Brussels, with political groups threatening to withdraw support for President Ursula von der Leyen because of the issue. Notably, Irish Members of the European Parliament (MEPs) Lynn Boylan and Ming Flanagan, are shadow rapporteurs for this file for the Left Group as members of the Parliament’s committee on Internal Market and Consumer Protection (IMCO).

In a subsequent statement, the Commission clarified its position, stating that the Directive had not been formally withdrawn and that they had only intended to withdraw it if micro-enterprises remained in the scope of the rules, which would go against its “simplification” agenda.  However, some MEPs have questioned the justification for the Commission’s actions given that the Parliament had already accepted the exclusion of microenterprises in the previous round of negotiations.

Next steps on green claims

The Commission maintains that it is still committed to the Directive and that it is up to the Member States to find a way forward with negotiations, however no further date for the concluding trilogue has been announced.

On 1 July, Denmark took over the Presidency of the Council of the EU and will now be responsible for shepherding this file.  A discussion among diplomats took place on the issue on Wednesday 25 June.

On 23 June, the chairs of the responsible committees at the European Parliament (ENVI and IMCO), stated their readiness to continue negotiations as soon as possible by resuming the institutional dialogue. Meanwhile, Commission President Ursula von der Leyen is due to face a no-confidence vote in the European Parliament next week. A debate on the motion of censure will take place on 7 July and is due to take place on 10 July.

While the motion is largely symbolic and isn’t expected to pass (only once has a Parliament motion of censure resulted in a Commission’s resignation), it underscores the growing dissatisfaction with her leadership among certain MEPs.