The aim of this directive is to provide a stricter framework for environmental claims and to lay down some rules on labels, while harmonizing the rules within the Union.

It comes after it has been noted that more than half of the environmental claims used are vague, unfounded or difficult to verify, that Member States’ internal legislation is not harmonized and is disparate, and that there are hundreds of different sustainability labels with very different levels of transparency.

Directive (EU) 2024/825 Greenwashing (empowering consumers for the green transition through better protection against unfair practices and through better information), adopted on last February 28, complements Directive 2005/29/EC of May 11, 2005 concerning unfair business-to-consumer commercial practices in the internal market and the Directive of October 25, 2011 on consumer rights (2011/83/EU).

The directive includes new rules and practices that will influence how companies build communication strategies, use environmental and social claims and inform consumers about their sustainable practices. Below, we break down its content, main requirements, and the impact it has on companies. 

Content on unfair commercial practices

The aim of the directive is to introduce new rules that will apply to professionals in order to enable consumers to make sustainable consumption choices. This includes misleading environmental claims (greenwashing), misleading information on the social characteristics of products or companies or sustainable development labels.

The main rules governing communication and advertising are as follows:

Introduction of the definition of environmental claims.

It introduces a number of definitions, including that of environmental claim, which is defined very broadly as “any message or representation which is not mandatory under Union or national law, in any form, including text, pictorial, graphic or symbolic representation, such as labels, brand names, company names or product names, in the context of a commercial communication, and 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 ” (Article 2, point o of Directive 2005/29).

This broad definition of environmental claims can cover claims relating to climate change, energy efficiency, circularity, pollution or biodiversity, among others.

The concept of misleading commercial practices has been extended to include “environmental or social characteristics” and aspects linked to circularity, such as the durability, reparability or recyclability of products and services.

Thus, information provided by a professional on the social characteristics of a product may be considered misleading. The following elements will be taken into account when assessing the conformity of the communication:

• the quality and fairness of working conditions on the workforce involved (safety of the work environment, social dialogue);
• respect for human rights;
• equal treatment and equal opportunities for all;
• gender equality and the contribution to social or ethical initiatives (animal welfare).

The directive now also covers all environmental or ‘green’ claims linked to the circularity of a product, such as the sustainability of a product, brand, company or service, and, according to the directive, sustainability claims, reparability or recyclability.

Rules on environmental claims relating to future environmental performance.

According to the new Article 6(2)(d) of the Unfair Commercial Practices Directive, environmental claims “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, such as allocation of resources, and that is regularly verified by an independent third party expert, whose findings are made available to consumers” will simply be deemed to be misleading following a case-by-case assessment.

Future environmental claims will need to be clear, objective, publicly available, verifiable and part of a detailed and realistic implementation plan that includes measurable and time-bound objectives and other relevant elements required to support its achievement, such as the allocation of resources.

Above all, they will also have to be regularly verified by an independent third-party expert, whose findings will have to be made available to consumers.

The requirements relating to the justification of future environmental performance and its verifiability have, therefore, been considerably strengthened. Mere declarations of intent concerning a transition to carbon neutrality or to climate neutrality by a certain date will no longer be acceptable without detailed and realistic justification.  

In future, companies will have to be particularly careful before making environmental claims about future performance.

Comparison services of environmental characteristics are regulated.

The comparison of products and suppliers on environmental or social characteristics needs to fullfil new requirements. The provider of such comparison service must provide information on

• (i) the method of comparison;
• (ii) the products being compared;
• (iii) the suppliers of those products;
• (iv) the measures taken to keep the information up to date. 
  

The text states: “Where a trader provides a service which compares products and provides the consumer with information on environmental or social characteristics or on circularity aspects, such as durability, reparability or recyclability, of the products or suppliers of those products, 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, shall be regarded as material information.“.

If this information is missing, the service of comparison will be deemed misleading depending on the circumstances.

This can make it more difficult to design comparative environmental claims, which are often formulated without specifying the products being compared (for example “more sustainable”, “better for the environment”). 

New practices deemed unfair in all circumstances include:

1. Displaying a sustainability label that is not based on a certification scheme or not established by public authorities. 

These labels are broadly defined as those that aims to set apart and promote a product, a process or a business by reference to its environmental or social characteristics, or both. This means that self-created labels will be prohibited.

Certification scheme must meet the following criteria:

• The scheme is open under transparent, fair, and non-discriminatory terms to all traders willing and able to comply with the scheme’s requirements.
• The requirements defined by the scheme are developed by the scheme owner in consultation with the experts and stakeholders concerned.
• The scheme sets out procedures for dealing with non-compliance with the scheme’s requirements and provides for the withdrawal or suspension of use of the sustainability label by the trader in case of non-compliance with the scheme’s requirements.
• The monitoring of a trader’s compliance with the scheme’s requirements is subject to an objective procedure and is carried out by a third party whose competence and independence in relation to both the owner of the scheme owner and the professional are based on international, Union or national standards and procedures.

2. Making a generic environmental claim for which the trader is not able to demonstrate recognized excellent environmental performance relevant to the claim (for example. “sustainable” or “responsible”).

The generic environmental claims will be only admissible if the trade can demonstrate a recognized excellent environmental performance, i.e. in accordance with the Ecolabel Regulation (Regulation (EC) No 66/2010) or the national or regional EN ISO 14024 Type I Ecolabel schemes officially recognized in the Member States or by corresponding to top environmental performance for a specific environmental characteristic in accordance with other applicable Union.

Such excellent environmental performances are rare. As a consequence, many generic claims such as “environmentally friendly”, “eco-friendly”, “green”, “nature’s friend”, “ecological”, “gentle on the environment”, “climate friendly”, “energy efficient” or “biodegradable” will not be admissible anymore.

As recital (10) of the Directive indicates, the new ban goes so far that general claims such as “sustainable” or “responsible” will remain prohibited, even if the trader can demonstrate recognized environmental excellence performance, because these claims also relate to other characteristics in addition to environmental characteristics, such as social characteristics. 

In principle, this prohibition does not extend to claims relating to social impact (e.g. “fair trade”, “ethical origin”, etc.), but we cannot rule out the possibility that Member State authorities will consider generic claims relating to social impact to be misleading due to a lack of clarity on this point in the Directive.

3. 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.

For example, indicating that a product has been manufactured using recycled materials, when only the packaging is made of recycled material.

4. Claiming, based on the offsetting of greenhouse gas emissions, that a product has a neutral, reduced or positive impact on the environment in terms of greenhouse gas emissions.

As stated in recital (12) of the Directive, the EU’s ban is aimed at claims such as “climate neutral”, “CO₂ neutral certified”, “carbon positive”, “climate net zero”, “climate compensated”, “reduced climate impact” and “limited CO₂ footprint”.  According to the EU, such claims present an increased risk of misleading consumers because they give the false impression that the product as such or its manufacture and delivery have no impact on the environment.

In future, such claims will only be permitted if they are based on the actual lifecycle impacts of the product concerned, and not on the offsetting of greenhouse gas emissions outside the product’s value chain, as the former and the latter are not equivalent.

This prohibition should not prevent companies from advertising their investments in environmental initiatives, including carbon credit projects, as long as they provide this information in a way that is not misleading and complies with the requirements set out in EU law.

5. Any commercial communication in relation to a good containing a feature introduced to limit its durability despite information on the feature and its effects on the durability of the good being available to the trader.

This includes products designed to cease functioning after a certain period of time.

Therefore, once a professional, including a retailer, is aware of this characteristic and its effect on the durability of the product, he may not make any commercial communication in favour of this product.

6. Falsely claiming that under normal conditions of use a good has a certain durability in terms of usage time or intensity.

7. Presenting a good as allowing repair when it does not.

Entry into force

This directive must be transposed into national law by March 2026 at the latest and come into force by September 2026 at the latest.

As soon as this directive is adopted, we will keep you informed and monitor its transposition in the EU Member States.

In addition to this directive, companies should also bear in mind that European law on greenwashing is not complete with this new directive, since another directive is in the process of being adopted: the draft directive of 22 March 2023 on environmental claims (the “green claim directive”), which aims to regulate environmental claims and labels.

It would supplement Directive 2005/29 with regard to the justification and verification of environmental claims. The Parliament has adopted its position on the new rules for explicit environmental claims and environmental labels on March 2024. The final vote of the European Council took place at the Environmental Council on 17 June 2024. A final agreement is expected in the course of 2025. The Green Claims Directive would then have to be transposed into national law within 24 months.

This new directive becomes the essential tool for verifying the compliance of environmental claims with EU law. The directive will most likely be complemented by the Green Claims Directive, for which the trilogue will start in early 2025.