New EU Directive “on green claims”: Penalties and high requirements for the substantiation and communication of green claims

A new draft of a Directive by the EU Commission on so-called green claims (Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on green claims) provides for detailed requirements on the substantiation and communication of environmental claims. The draft aims to complement the proposal for a Directive on empowering consumers in the green transition (COM 2022 (143)), which, amongst other things, seeks to ban the use of certain environmental claims and sustainability labels altogether. The EU commission plans to formally present the new directive on the substantiation and communication on green claims on 22 March 2023, but it has already become public.

The new Directive is intended to create EU-wide, harmonized standards on substantiation and communication of environmental advertising. These standards contain strict criteria and go beyond the existing requirements for the substantiation of environmental claims in German case law. In addition, the Directive also requires the Member States to introduce rules on administrative penalties in order to sanction infringements of the Directive appropriately and effectively. Such sanctions would be uncharted territory in German unfair competition law and would pose significant commercial risks for companies.

The draft shows that the EU lawmakers plan to regulate the widespread practice of advertising with environmental claims much more strictly and that the existing sanctions in the individual member states are deemed inadequate. Due to the major implications of this Directive and the Directive on empowering consumers in the green transition, businesses should keep a close eye on the legislative procedures and further legal developments at the EU level. We will keep you updated.